Open banking has rapidly emerged as a transformative force in global finance, redefining traditional banking models by enabling secure, application programming interface (API)-driven data sharing and third party service integration. Valued at approximately $25.1bn in 2023 and poised to surge to $29.6bn by 2025 – ultimately eclipsing $306.6bn by 2035 – the global market’s projected compound annual growth rate (CAGR) of 26.3% through 2035 underscores its potential to reshape financial services worldwide. Within the GCC, a concerted drive towards digital transformation, economic diversification and enhanced financial inclusion has rendered open banking a strategic imperative. Across Qatar, Bahrain, Oman, Saudi Arabia and the UAE, regulators have embarked on a spectrum of frameworks and initiatives that, while varied in scope and maturity, share the common goal of cultivating an interoperable, secure and innovation-friendly ecosystem.
Regulatory Frameworks
In October 2023 the Qatar Central Bank (QCB) unveiled its five-year National Financial Technology (Fintech) Strategy, positioning open banking architecture and an API platform as cornerstones of the country’s broader financial market infrastructure. Beyond mere compliance, the strategy envisages open banking as a catalyst for novel financial products and enhanced customer experiences, actively mobilising data sharing between incumbent banks and fintech innovators. By aligning its fintech roadmap with Qatar National Vision 2030, the QCB underscores open banking’s role as a technological initiative and a transformative driver aimed at fostering competition, bolstering financial inclusion and reinforcing the resilience of a rapidly diversifying economy.
Bahrain pioneered the GCC’s open banking journey with the Central Bank of Bahrain’s (CBB) comprehensive framework launched in October 2020. Developed in collaboration with Deloitte and local stakeholders, the framework delineates two primary service categories – account information services (AIS) and payment initiation services (PIS) – and prescribes rigorous API specifications, cybersecurity protocols and customer consent guidelines. A robust governance structure mandates licensing, performance reporting and data protection measures, while recent amendments extend the framework’s ambit to legal entities, broadening its applicability beyond individual consumers. With updated regulations becoming mandatory in September 2024, Bahrain has positioned itself as a leader in balancing innovation with regulatory oversight.
Open Finance
Building on international best practices and the Kingdom’s Vision 2030, the Saudi Arabian Monetary Authority (SAMA) released its Open Banking Framework in phased releases, beginning with AIS and progressing to PIS. Technical standards and API specifications ensure interoperability, while a purpose built Open Banking Lab provides a sandbox for banks and fintech firms to certify services and navigate regulatory complexities. SAMA’s framework incorporates stringent security measures – spanning authentication, consent management and risk mitigation – and fosters innovation through a regulatory sandbox that permits pilot programmes under controlled conditions.
In the UAE, the 2024 Open Finance Framework transcends banking to encompass insurance and other financial sectors, anchored by a Trust Framework, a centralised API Hub and suite of common infrastructural services. Regulated entities must enable secure data access and transaction initiation, predicated on explicit user consent, robust authentication and encrypted communications. The framework’s regulatory goals – fostering innovation and competition, enhancing consumer choice and financial inclusion, ensuring data security and aligning with the UAE’s broader digital transformation agenda – reflect a holistic vision. By mandating open access to essential financial data, the UAE is setting the stage for a vibrant ecosystem in which start-ups and incumbent entities alike can deliver personalised, transparent financial solutions.
Oman’s central bank approved its Regulatory Framework for Open Banking in January 2025, mandating banks and payment service providers to enable standardised API access for licensed third-party providers. The framework introduces licensing tiers, automatically qualifying banks while requiring payment service providers to seek exemptions, and integrates electronic know your customer processes with biometric verification, lowering on-boarding costs for small and medium-sized enterprises (SMEs) by an estimated 40%. Emphasising contractual governance, Omani regulations require third-party payment providers to maintain liability insurance against data breaches and enforce data localisation within national borders. Oman’s National Digital Payments Platform and a pronounced focus on SME-oriented applications underscore the framework’s practical orientation towards accelerating financial inclusion and economic diversification.
Regional Benchmarking
Despite shared objectives – chiefly leveraging API to accelerate digital transformation – these regulatory approaches diverge in emphasis and design. Bahrain’s early lead is characterised by comprehensive customer-centric provisions and trans sectoral applicability, whereas Qatar’s framework, still in consultation, stresses architecture orchestration within a broader fintech strategy. Saudi Arabia’s API-centric, phased rollout and sandbox-driven innovation support contrast with Oman’s contractual and localisation-driven regime that builds on Bahrain’s work while tailoring safeguards to its domestic market. The UAE’s expansive open finance concept, integrating insurance and cross-sectoral services, represents the most holistic approach, combining interoperability with a rigorous trust framework. Across the GCC, these frameworks converge on the principle that open banking is not an end in itself but a means to forge a more inclusive, competitive and digitalised financial sector.
Impact & Benefits
The impact of open banking on traditional banking practices across the GCC has been both swift and substantive. Qatar National Bank Group leveraged its market dominance to pilot the country’s first open banking platform, streamlining API driven integrations with fintech partners and promising reduced service delivery times in retail banking – a capability now extending to corporate clients. Bank Muscat in Oman, collaborating with Tarabut Gateway, slashed SME loan approval times from 14 days to 48 hours by harnessing real-time transactional data analysis. Emirates NBD’s partnership with digital platform YAP in the UAE facilitated instant cross-border remittances, processing over 500,000 transactions worth $130m in the first quarter of 2025. In Saudi Arabia, Alinma Bank’s engagement with SAMA’s Open Banking Lab enabled dynamic currency conversion services that reduced foreign exchange costs by 11% for retail customers. Such initiatives exemplify the shift towards embedded finance, as banks increasingly monetise APIs by integrating financial services into non-banking platforms such as e-commerce and telecommunications.
The potential benefits are many. From a strategic standpoint, banks stand to unlock new revenue streams: Oman’s digital banking segment, for example, is forecast to expand at a 22.4% CAGR between 2025 and 2030, fuelled by personalised products such as internet of things (IoT)-based micro-insurance. Meanwhile, achieving cost efficiencies through cloud-based, API-driven architectures have already yielded an 18% reduction in operational overhead for UAE institutions. Market expansion has followed suit, as evidenced by the performance of Saudi Arabia’s Riyad Bank, which grew its SME clientele by 34% in 2024 through open banking– powered cash flow prediction tools.
Challenges & Future Prospects
Despite early successes, implementation hurdles persist. Legacy infrastructure demands significant investment: 65% of Omani banks require approximately $220m in upgrades to ensure API compatibility and Emirates NBD alone has committed $150m to core modernisations. Cybersecurity remains paramount: Saudi regulators now mandate ISO 27001 certification for all open-banking providers, while Qatar’s emerging framework stresses secure API governance to combat systemic vulnerabilities. Consumer awareness poses a further challenge; Bahrain’s CBB conducted Open Banking 101 workshops for 12,000 businesses, yet broader uptake hinges on sustained campaigns to convey benefits and build trust.
Looking beyond immediate implementation, broader market dynamics signal fertile ground for ongoing innovation. Regional open banking platforms attracted $287m in funding during 2024, led by Tarabut Gateway’s $32m Series B round, while Saudi’s Open Banking Lab certified 47 new fintech solutions, including IoT-based credit scoring tools tailored to desert farming SMEs. A GCC-wide API standardisation initiative, spearheaded by Bahrain’s CBB, aims to establish unified remittance corridors by 2026, potentially saving the region $410m annually in transaction fees. Such developments envision a future in which cross-border interoperability, data-driven credit assessment and embedded finance become core features of the GCC banking landscape.
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