Fadhel Al-Buainain, a former Saudi banker, said that it is a known fact that only the customer and the bank have access to confidential banking information. Following the implementation of the new policy, however, a third party can also have access to such information if the customer grants it permission. In this way, customers will be able to securely manage their bank accounts and share financial data.
“Competition between financial institutions will become fiercer once the policy has been implemented. Institutions will compete over offering innovative financial products to attract more customers. Besides, customers can combine all bank accounts onto a single platform,” noted Al-Buainain, who is a member of the Saudi Financial Association.
Digital services will improve as they constitute a significant part of the strategy for developing the finance sector, he explained, indicating that new financial companies will be able to offer their services to customers, especially in the private sector. The data available to the credit and investment sectors will also be enhanced.
“Fintech companies will benefit the most from the policy because of their desperate need for financial data, which help them make sound financing decisions. This in itself will increase the benefits that the digital sector will reap from the policy at a time when the finance sector needs a lot of digital development to keep pace with digitization,” Al-Buainain pointed out.
The policy will also improve trust among all stakeholders in a financial relationship, whether banks or fintech companies.
Dr. Abdullah Baeshen, a financial advisor, said the banking sector has seen major developments in terms of infrastructure and technology and is monitored closely by SAMA.
“The new open-banking policy will enable customers to use data easily and perform swift financial transactions through their bank accounts — the backbone of any industrial or commercial transaction and even in the stock exchange markets. In only a short amount of time, fintech paved the way for a major industry to emerge and become a center of attraction in stock exchange markets,” explained Baeshen, who is the chairman of Team One Financial Consultants.
The new policy will develop the financial sector and help global banks penetrate the market, he said, noting that piracy, hacking and other electronic crimes continue to pose risks for accounts and might lead customers to be skeptical about a bank’s ability to protect its clients’ personal information.
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