The Central Bank of Bahrain (CBB) published its commentary on the progress made by retail banks in Bahrain on implementation of the necessary infrastructure for compliance with Bahrain Open Banking Framework (Bahrain OBF).
This was done following a grace period that allowed for implementation which started on 28th October 2020 and ended on 30th April 2021.
CBB had issued rules relevant to open banking in December 2018 which were aligned to the European Payment Services Directive (PSD2).
These standards have been recently developed to keep pace with developments of innovative solutions provided by fintech companies which target not only the retail consumer, but also the small and medium enterprises and also the corporate sector.
The Bahrain OBF included the supporting technical standards, including APIs, customer experience guidelines, cyber security standards and other relevant operational standards.
The framework was developed with a view to improving the reach and quality of service offerings by retail banks through digital online and mobile channels.
This initiative is part of a larger upgrade of the Bahraini financial sector which must remain competitive in the face of demand for connectivity within the financial services ecosystem.
The Bahrain OBF will help foster competition and enhance efficiency of the financial system keeping in view changing consumer trends.
More specifically, following are some of the anticipated effects on the banking system from a consumer perspective:
- Aggregation or ‘global’ view of account or financial position data from different retail banks
- Proactive financial management and budgeting tools for users
- Easier product comparisons for consumers /retail customers in particular
- New channels for internet payments without the use of credit cards/debit cards
- Lenders may get easier access to applicants’ data, therefore speeding up loan approvals
Yousef Rashid Al Fadhel, Executive Director of Corporate Services at the CBB said,
“The CBB has been cooperating with retail banks during the past period to take practical steps towards implementing the new standards for open banking services as part of the its strategy to expand the application of latest banking products that provide suitable innovative solutions for customers.
The newly developed implementation guidelines and standards will help the Bahraini banking sector in achieving the highest standards in terms of customer friendly digital offerings making the sector comparable with those of other major financial centers of the world”.
Featured image credit: Edited from Unsplash