UAE Sets Global Benchmark With Launch Of Open Finance To Elevate Financial Services

In a significant move towards enhancing the financial services landscape, Al Etihad Payments (AEP), a subsidiary of the Central Bank of the UAE (CBUAE), has entered into a strategic partnership with Core42, a G42 company known for its comprehensive AI enablement solutions. This collaboration marks the initiation of Open Finance in the UAE, a key component of the CBUAE’s Financial Infrastructure Transformation (FIT) Programme. The agreement was formalized in a ceremony attended by Khaled Mohamed Balama, Governor of the CBUAE, with Fatma Al Jabri, Assistant Governor for Financial Crime, Market Conduct and Consumer Protection at the CBUAE and member of Al Etihad Payments Company, and Kiril Evtimov, Chief Executive Officer of Core42, signing the pact.

The UAE is setting a global benchmark by being the first country to implement a unified trust framework alongside a centralized API hub. This innovative approach aims to facilitate a single secure connection for accessing the entirety of the banking and insurance sectors, with access predicated on customer consent and regulation by the CBUAE. This initiative is pivotal in realizing the UAE's vision to lead in establishing global standards for open finance, leveraging successful precedents to deliver an unparalleled open finance mechanism worldwide.

Open Finance is poised to revolutionize the financial services sector by offering customers unprecedented control over their financial data. It enables secure sharing of financial product data with third parties or other financial institutions, initiation of payments and financial transactions through third parties, and access to quotes for potential financial services. This initiative not only fosters innovation in products and services but also emphasizes customer-centricity, allowing financial services to integrate seamlessly into various industries' digital ecosystems.

The phased implementation of Open Finance will begin with Open Banking and subsequently extend to Open Insurance, aiming to encompass the majority of customers by 2024. AEP has also collaborated with Ozone API and Raidiam as technology partners in the consortium led by Core42 for this initiative. Fatma Al Jabri highlighted the transformative potential of Open Finance for the UAE’s financial services industry, noting its role in accelerating digital financial service adoption, enhancing product and service safety and innovation, and providing consumers with efficient access to a broad spectrum of financial products.

This strategic move underscores the CBUAE's commitment to achieving its vision and strategic objectives by creating new opportunities within the financial services sector. It aims to enhance digital financial inclusion while ensuring that consumers maintain control over their finances. The implementation of Open Finance is expected to significantly advance the UAE's financial infrastructure transformation, setting a new standard for innovation and consumer empowerment in the global financial services industry.

With inputs from WAM