CBB published a commentary on the progress made by retail banks in Bahrain on implementation of the necessary infrastructure for compliance with the Open Banking Framework in Bahrain, following the grace period allowed for implementation. The grace period started on October 28, 2020 and ended on April 30, 2021. CBB had issued rules relevant to open banking in December 2018 and these 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 the corporate sector.
The Bahrain Open Banking Framework included the supporting technical standards, including Application Programming Interface (APIs), customer experience guidelines, cyber security standards, and other relevant operational standards. The Bahrain Open Banking 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 Open Banking Framework will help foster competition and enhance efficiency of the financial system, keeping in view the changing consumer trends. The framework's impact on the banking system includes faster loan approvals as lenders may get easier access to applicant data, aggregation or "global" view of account or financial position data from different retail banks, easier product comparisons for consumers, and new channels for internet payments without the use of credit or debit cards.
Related Link: Press Release
Keywords: Middle East and Africa, Bahrain, Banking, Open Banking, API, Fintech, Regtech, Loan Origination, CBB
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