A Deep Dive Into Saudi Arabia’s Evolving Open Banking Revolution
- Kshitija Kaur and Sanjeev Kumar
- 6 mins read
- Open Finance, Partnerships
Table of Contents
Open Banking: A Cornerstone of Saudi Arabia's Financial Future
The rapid evolution of Open Banking in Saudi Arabia is setting the stage for a financial revolution, driven by regulatory initiatives, market momentum, and a growing ecosystem of infrastructure providers. As Saudi Vision 2030 emphasises innovation and digital transformation, the Kingdom is quickly becoming a key player in the global open banking landscape. With proactive measures by the Saudi Central Bank (SAMA) and the entry of banks, fintechs, and infrastructure providers, Saudi Arabia is creating a dynamic and competitive open banking ecosystem. After a deep dive into Saudi Arabia’s Open Banking landscape, exploring the symbiotic relationship between industry players and regulators, and collaborating with Mod5r to explore how innovation-driven Open Banking aligns with Vision 2030, this blog will now explore the regulatory milestones, market trends, key players, and case studies that are shaping the future of open banking in the Kingdom.
Regulatory Roadmap: Saudi Arabia’s Open Banking Journey
The regulatory framework for open banking in Saudi Arabia has been meticulously crafted by SAMA (Saudi Central Bank), with significant milestones that laid the groundwork for the future of financial innovation. One of the critical pillars of this roadmap is the introduction of licences for banks, fintechs, and infrastructure providers, which ensures compliance and fosters innovation.
- 2022: The initial launch of the Open Banking Framework focused on Account Information Services (AIS), enabling the first wave of licences for account information services.
- 2023: A crucial year for the industry as SAMA expanded the regulatory scope and welcomed a diverse range of fintechs into the sandbox environment.
- September 2024: The most recent development came with the announcement of licences for Payment Initiation Services (PIS), solidifying Saudi Arabia’s commitment to evolving the financial ecosystem and empowering more seamless and secure transactions between banks and fintechs.
These progressive regulatory steps have created fertile ground for innovation, and as a result, the market has seen notable growth in partnerships, product launches, and investment activity.
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Market Momentum: A Growing Open Banking Ecosystem
As the regulatory framework in Saudi Arabia matures, key players in the industry—including banks, fintechs, and infrastructure providers—are seizing the opportunity to innovate and scale. The market has been buzzing with activity, from partnerships to product launches, investments, and even mergers and acquisitions.
- Partnerships: Leading banks have joined forces with fintech startups to launch open banking-powered services, catering to the growing demand for innovative financial products. SingleView’s partnership with Mastercard and Tarabut’s collaboration with four key banking partnerships in KSA for open banking, including Riyad Bank and Saudi Awwal Bank, are key examples of this trend.
- Product Launches: Fintechs are introducing new services, leveraging open banking APIs, such as personal finance management, business finance management, real-time account aggregation, and wealth management services. Spire Tech’s launch of AI-powered open banking platform ‘Spire Ingage’ is one such example where fintechs are launching tools that are personalising financial insights.Â
- Funding and M&As: Major fintech players and infrastructure providers have secured substantial funding, while notable acquisitions have started to take place, signalling consolidation in the market. Malaa Technologies’ recent ~$17.3M Series A round led by SNB Capital and the acquisition of a 65% stake in Drahim app by Al Rajhi Bank are few noteworthy moves.
This momentum highlights the appetite for innovation in the financial sector, with banks and fintechs collaborating to build a more inclusive and efficient banking experience. The recent 24 Fintech event in Riyadh also marked a series of pivotal trends in the Saudi financial ecosystem, underscoring the region’s growing emphasis on Open Banking.
The Open Banking Ecosystem: Key Infrastructure Providers
The backbone of Saudi Arabia’s open banking revolution lies in the hands of 12 key infrastructure providers, each playing a pivotal role in enabling banks and fintechs to harness the potential of open banking. These providers offer the tools, APIs, and platforms necessary for secure data sharing, payment initiation, and advanced financial services.
- Tarabut Gateway: Established in 2017, Tarabut has become a prominent player, offering comprehensive API services and expanding its footprint across the Middle East.
- Lean Technologies: Founded in 2019, Lean has emerged as a leading open banking infrastructure provider, securing major funding rounds and acquiring a Saudi open banking license.
- Other Players: Companies like Data Insights, Bwatech, Single View, and others are making strides in enabling the seamless integration of open banking services for banks and fintechs alike.
Each of these infrastructure providers brings its unique expertise and capabilities to the table, making them crucial enablers in the Saudi open banking landscape.
Lean and Tarabut – Driving Open Banking Innovation
Two notable case studies—Lean Technologies and Tarabut Gateway—illustrate the potential of open banking infrastructure providers in Saudi Arabia.
- Lean Technologies: With its advanced API platform and regulatory licence, Lean has been at the forefront of enabling banks and fintechs to securely access customer data, powering new-age financial products like account aggregation, personal finance management tools, and payment services. Lean’s collaborations with major Saudi banks demonstrate its critical role in the ecosystem.
- Tarabut Gateway: One of the first open banking providers in the MENA region, Tarabut has built a reputation for its comprehensive API solutions and partnership with major financial institutions. Tarabut’s technology allows fintechs to access real-time banking data, driving innovation in personal finance management, lending, and wealth management.
Both companies exemplify how infrastructure providers are shaping the future of open banking, enabling faster, more secure, and more innovative financial services in Saudi Arabia.
The Open Banking Playbook: How Saudi Banks Are Adapting
Banks in Saudi Arabia have adopted varied approaches to the open banking revolution. From acquiring fintechs to securing licences, each bank has charted its own path:
- Arab National Bank: Secured an open banking licence from SAMA, enabling the bank to integrate open banking services directly into its digital offerings.
- Al Rajhi Bank: Took a bold approach by acquiring a fintech and securing regulatory sandbox approval, positioning itself as a forward-thinking player in the space. It has also launched neotek, a digital solutions platform that integrates multiple financial accounts through one channel.
- Saudi National Bank (Al Ahli Bank): Made a strategic investment in Malaa, a fintech specialising in open banking solutions, underscoring its commitment to leveraging fintech innovation.
These different strategies showcase the varied approaches banks are taking to capitalise on the growing opportunities in the open banking sector.
The Future of Open Banking in Saudi Arabia
Saudi Arabia’s open banking landscape is evolving at a remarkable pace, driven by regulatory initiatives, market activity, and the rise of infrastructure providers. With a strong regulatory framework laid out by SAMA, partnerships between banks and fintechs, and the support of robust infrastructure providers, the Kingdom is set to lead the region in open banking innovation.Â
The next few years will be critical as banks, fintechs, and infrastructure providers continue to build on this foundation, making Saudi Arabia a hub for financial innovation and open banking leadership in the Middle East.
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Authors
Kshitija is a senior branding associate at WhiteSight, crafting branding strategies and fintech content. When she's not conjuring up new ideas for the company, you can find her dabbling in new hobbies and documenting her experiences through writing and short films.
Sanjeev is a fintech aficionado who loves to explore the depths of the industry as much as he loves to explore the depths of the ocean in his scuba gear. He is the founder and CEO at WhiteSight, bringing a wealth of research and advisory experience to the fintech world.
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