Establishing global standards for the open finance sector in the UAE is one of the nine initiatives within the Central Bank of the UAE‘s (CBUAE) Financial Infrastructure Transformation (FIT) Programme. As a result, Al Etihad Payments (AEP), a subsidiary of the CBUAE, has signed a partnership with Core42, a G42 company and full-spectrum AI enablement solutions provider to set up a foothold in the open finance sector.
The initiative is also an essential part of the CBUAE’s ongoing efforts to achieve its vision and strategic objectives. It looks to provide new opportunities in the financial services sector including enhancing digital financial inclusion. Open finance provides a platform that gives UAE customers the power and capability to securely and efficiently share the data of their financial products with third parties or other financial institutions.
It also allows customers to initiate payments and other financial transactions via third parties. This is in addition to obtaining quotes for potential financial services.
The UAE is one of the first countries globally to implement a consolidated trust framework and centralised API hub. This will enable a single secure connection to access the whole of the banking and insurance markets. All the while it ensures that access is only granted, with customer consent, to third parties regulated by the CBUAE.
Perks of open finance
Open finance enables product and service innovation. Most importantly, it allows financial services to become more customer-centric and ‘embedded’ – seamlessly combined within other industries’ digital ecosystems to support and enable their services. All participants will be under the CBUAE licensing and supervision regulations. The open finance will commence with open banking followed by open insurance, in phases which will provide access to the majority of customers in 2024.
AEP has also engaged with Ozone API and Raidiam as technology providers within the consortium led by Core42 for its open finance implementation.
Fatma Al Jabri, assistant governor for financial crime, market conduct and consumer protection at the CBUAE, said, “The implementation of open finance marks a significant advancement in the UAE’s financial services industry and its financial infrastructure transformation.
“It will accelerate the adoption of digital financial services, providing more innovative and safer digital financial products and services in the country. In addition, it will ensure consumers have control over their finances and efficient access to a diverse range of financial products.”
The signing ceremony was attended by Khaled Mohamed Balama, governor of the CBUAE, which was signed by 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.
