CBB to roll out “Open banking”

The Central Bank of Bahrain (CBB) will soon roll out an “open banking” initiative based on the idea of interconnecting licensed retail banks and other financial institutions. Draft rules to provide this new innovative services to consumers in the Kingdom is now available for consultation. Some of the anticipated effects on the banking system includes the creation of new channels for internet payments without the use of credit cards/ debit cards; aggregation or ‘global’ view of account or financial position data from different providers; proactive financial management and budgeting tools for users as well as downward impact on fees and costs to customer.

“The regulatory framework is in line with international best standards thus creating a sound ecosystem to maintain Bahrain’s strong position as a leading financial hub in the region,” Rasheed Al Maraj, the Governor of the CBB, said. Open banking services entails the provision of “account information services” akin to those provided by an aggregator for “information pertaining to customers’ dealing with various banks, card companies and other payment services and “payment initiation services” which involves the payment transfer initiation from any licensee connected by the customer on a single app or application software, mobile device or other media,” the statement said.

The initiative, according to CBB, is part of a larger upgrade of the Bahraini financial sector which must remain competitive in the face of demand for connectivity within financial services and with the e-commerce industry. The rules are targeted at ensuring that the CBB helps foster innovation, competition and enhanced efficiency within the financial system keeping in view changing consumer trends. The regulatory rules will be finalised by the end of this year based on the feedback received on the consultation by 25 November 2018. The consultation paper is available on the CBB website (www.cbb.gov.bh) under the “open consultations” section, the CBB statement said.