Central Bank of Bahrain (CBB) launches the open banking framework

By Edil Corneille

The Central Bank of Bahrain (CBB) has launched the Bahrain Open Banking Framework (Bahrain OBF) which includes guidelines on detailed operations, security standards, customer experience, technical open Application Programming Interface (API) specifications and the overall governance framework needed to protect customer data. These standards follow the comprehensive rules on Open Banking that were previously issued in December 2018. Bahrain OBF is expected to ensure the holistic implementation of open banking services by the industry.

Rasheed Al Maraj, CBB Governor enunciated, “The introduction of Bahrain OBF is a continuation of the CBB’s efforts in developing the local ecosystem to encourage innovation in banking, whilst providing customers with advanced services that keep pace with the development witnessed by the global banking industry, and will also assist emerging FinTech companies to work competitively. This is in line with the CBB’s vision with regards to digital transformation and paving the way for innovation and attracting FinTechs.”

The framework was developed in collaboration with Deloitte and in consultation with retail banks and other financial institutions in Bahrain.

Yousef Al Fadhel, Executive Director – Corporate Services at the CBB and Chairman of Bahrain OBF Committee elucidated, “The framework was developed and customized specifically for Bahrain, based on other jurisdictions’ experiences and in line with the strategic vision of the CBB, with the ultimate objective of facilitating better services at lower costs with better choices for banking customers. We are confident that this initiative will stimulate innovation further, which will in turn reinforce the Kingdom’s position as a pioneering and innovative financial services center.”

Open banking services entail the provision of two broad categories of services – account information services and payment initiation services. Account information service provides customers with access to all bank account information in an aggregated manner through a single platform whereas the payment initiation service allows licensed third party providers (TPPs) to initiate payments on behalf of customers while allowing seamless transfers between different customer accounts through a mobile based application.