MUSCAT: The framework enabling the introduction of Open Banking – a tech-driven service with the potential to transform the banking and financial services industry – is currently being formulated under the auspices of the Central Bank of Oman (CBO).
Having grown exponentially across wide swathes of the global financial landscape, Open Banking is set to make inroads in the Omani banking and financial sector as well upon the eventual adoption of the regulatory framework.
The fintech-based platform, based on the use of application programming interfaces (API), enables banks to collaborate with third-party payment service and financial service providers to create a smoother user experience for consumers.
Oman’s apex bank says it has been crafting an Open Banking API Strategy for the sector. “The Open Banking API framework project is currently in its advanced stages of the procurement cycle. The project is expected to kick off in 2023, where the review of the Open Banking Strategy and setting up the technical, data, and security standards will be discussed and finalised as well as selecting vendor, licensed banks (external stakeholders) through Oman Banks Association,” the Central Bank stated in its newly published 2022 Annual Report.
Significantly, the Open Banking initiative stems from a broader effort by the Central Bank to ignite the growth of a robust fintech ecosystem in the Sultanate of Oman.
Tahir bin Salim al Amri, CBO Executive President, commented: “The banking sector remained sound and resilient, amid continued technology adoption, and innovation in products and business models. More importantly, close monitoring of developments within the fintech ecosystem has been prioritised, and the necessary steps have been taken to further promote vibrant, inclusive, safe and efficient digital financial products and services.
Taking this perspective into account, the CBO has proactively undertaken additional measures in 2022 to allocate substantial resources towards bolstering cybersecurity and technology stability to ensure the continued security and resilience of our IT systems.
Furthermore, the CBO has prioritized investments in data management, aiming to effectively leverage the full potential of data. These concerted efforts will significantly contribute to fostering fintech-enabled financial inclusion and enhancing the efficiency of various payment systems.”
According to market experts, Open Banking has the potential to stimulate innovation, as well as provide a level playing field for tech platforms and startups.
Consequently, large conventional banks are compelled to improve their offerings in order to compete with smaller, nimble and tech-savvy players entering their turf. Among the beneficiaries of this competitive landscape are consumers who will enjoy fee reductions, improved technology, and customer service.
The fintech-based platform enables banks to collaborate with third-party payment services.
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