Saudi Arabia’s Open Banking ecosystem needs to see real value

In this March 9th, 2018 file photo, an aerial view of Riyadh city is seen from the Mamlaka tower, a 99-story skyscraper in Riyadh, Saudi Arabia. AMR NABIL AP It is important to make consumers see the value of open banking to promote open finance in the long run, according to experts at a forum in Saudi Arabia on December 5.

The customers need to see the real value, according to Sultan Al-Hamidi, chief business officer of the Social Development Bank, or SDB, a Saudi development bank based in Riyadh.

In partnership with a number of other banks, the SDB launched its first savings product for the low-income segment in 2019. The product has attracted around 150,000 customers and has attracted around 300 million Saudi riyals, or $79.8 million, in people's savings.

Sultan spoke at a panel discussion on Open banking today to open finance tomorrow at the World Fintech Show in Riyadh, organized by Riyadh-based Performance Ryada Events Co and managed by global business events and consulting firm Trescon.

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The use of application programming interfaces or APIs is a practice that allows third-party financial service providers to have access to financial institutions' financial data, with the consent of the customers.

In November, the Saudi Central Bank released the Open Banking Framework as one of the key outputs of an open banking program, which is part of a wider Saudi Arabian strategy that is linked to the Saudi Vision 2030, a development plan to reduce the nation's dependence on oil.

Karl Tlais, founder and strategic adviser at iAdvisory consultancy in Dubai, said that the three core ingredients of cashless societies are technology, regulatory governance and culture of adoption.

During the Pandemic, digital wallet platforms such as WeChat Pay and Alipay in China and GrabPay in Southeast Asia have achieved success and it is important to understand how they have kept the economy moving through technology, according to Tlais.

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Indicted by the fact that Generation Z has an income of between 1995 and 2010 and is expected to reach $33 trillion by the year 2030, Tlais said more innovative integration and a higher level of personalization are needed for banking services.

Aamir Janjua, a product officer at Spire Tech, an open banking provider in the Gulf Cooperation Council, said the most important thing in open banking is the value that can be delivered to consumers.

Aamir said that it is necessary to make the ecosystem more mature and secure so that consumers don't care what technology is used for as long as they get options and value.

The theme of Unleashed: Saudi Arabia's Thriving Fintech Ecosystem the World Fintech Show, held from December 5 to 6, brought together government authorities, global fintech experts, startups and investors to discuss the Fintech ecosystem in Saudi Arabia.

Fintech venture builder Fintactics announced the launch of its new ventures Holoul and Leza am, as well as signed a Memorandum of Understanding with Aion Digital and Bitfy Holdings during the event.