The new lab, announced by the Central Bank of Saudi Arabia (SAMA), will create a technical testing environment for the development of new open banking services ahead of the launch of open banking services in the first quarter of 2023.
This move follows the launch of an open banking framework by SAMA, proposing a set of regulatory guidelines and technical standards aimed at supporting banks and FinTechs’ ability to provide open banking services in the country.
The initial rollout, which only facilitated Account Information Services (AIS), has now been expanded to include Payment Initiation Services (PIS) and represents the latest in a series of regulatory initiatives undertaken by SAMA with the purpose of fostering FinTech innovation through experimentation.
Building on Saudi Arabia’s recent history of sandbox-led innovation, the new lab will also create the conditions for firms to run technical tests on their open banking services before they go live on the market.
FinTech innovation represents a key pillar of Saudi Arabia’s Vision 2030 strategy for economic development, playing a central role in reforming and modernizing the kingdom’s financial sector.
Alongside the open banking framework and various regulatory sandboxes, important milestones reached during the past two years include the issuing of licenses for the country’s first fully digital banks and the arrival of regional FinTech players from neighboring GCC nations.
Saudi Arabia’s large market and increasingly sophisticated regulatory and technical apparatus make it an attractive target for expansion for businesses coming out of Gulf FinTech hubs such as Dubai and Bahrain.