Business-Friendly Regulations Drive Open Banking Adoption in the Middle East

The Middle East and North Africa (MENA) region is quickly becoming a hotbed for open banking, driven by a unique ecosystem, booming consumer demand and “forward-thinking” regulators, said Abdulla Almoayed, founder and CEO at Tarabut Gateway.

According to Almoayed, this trend has made it possible to implement innovations seamlessly and much faster than in other parts of the world, with regulators effectively leading the transformation to ensure that the benefits of open banking are passed on to consumers.

Earlier this month, for example, Tarabut Gateway received its open banking certification from the Saudi Central Bank (SAMA) to launch its open banking services within the Regulatory Sandbox in the Kingdom of Saudi Arabia (KSA).

He added that the dynamics of markets across the region, where retail banks are small in number — only 13 in KSA, for example — means that partnerships are viewed as an opportunity to create value for all parties involved, rather than simply a means to an end.

“Unlike in Europe, the Western world and Southeast Asia, where the banks are typically larger, here [in the Middle East banks] are more open to partnerships with software providers and FinTechs and technology providers to accelerate and leapfrog that journey,” he told PYMNTS in an interview.

Meanwhile, Almoayed said account-to-account payments will revolutionize traditional payment systems and make it easier for businesses to transact with one another. It’s a space in which Tarabut Gateway is gaining ground, he said, while focusing on digitizing the lending process and becoming the lending partner of choice for startups in the region.

Keeping Up With Innovation

Commenting on how artificial intelligence (AI) is taking the world by storm, Almoayed said Tarabut Gateway has incorporated AI and machine learning into its infrastructure from day one, recognizing that the more data points you can give AI, the higher the ceiling as to what can be done using it.

“When you incorporate data plus payments, plus electronic signature laws, plus interoperability and multiple data points, [and] when regulators in this region are starting to talk about open data and open finance, the sky becomes the limit,” Almoayed remarked.

When it comes to regulating AI, he said it is important for regulators to accelerate legislation to keep up with the rapid pace of technological advancements. “If we wait for governments to deploy regulation, by the time they’re adopted, they’ll probably be obsolete and there will be a second generation of technology that’s already been adopted.”

This is where the private sector can play a key role, he added. “I think ensuring that the private sector has a say or a role, or a responsibility that is handed to the private sector to potentially certify the use of AI within certain companies can be an accelerator.”

Moving forward, Tarabut Gateway wants to enable and accelerate the growth of the FinTech ecosystem in the region, building the infrastructure that allows them to accelerate their journeys and adoption and take their products to market much easier.

“We want to be the one-stop shop that gives FinTechs the route to scalability across multiple markets using our universal APIs,” he said, calling on them to “work with TG, get connectivity across multiple markets, and let us worry about the connectivity and the payments infrastructure.”

Finally, tackling the talent shortage, the biggest issue the ecosystem is facing today, will also be a priority going forward.

As Almoayed said: “It’s not the size of the opportunity, and it’s not the available infrastructure and it’s not the speed of regulation, it’s the access to talent that remains challenging in this part of the world.”