Open Banking in the United Arab Emirates

June 2021: The UAE Central Bank published the Retail Payment Services and Card Schemes Regulation, already containing several Open Banking concepts—such as payment initiation services and APIs—laying the foundation for Open Finance.

July 2022: The Central Bank outlined its vision for open finance, aiming to stimulate innovation across the UAE finance sector by enabling customer-centric digital business and service models.

February 2023: The regulator launched the Financial Infrastructure Transformation Programme (FITP) to drive digital transformation in the finance sector as part of a wider strategy to position the Central Bank as a global leader. The programme proposes 9 initiatives, including eKYC, CBDCs, SupTech, and Open Finance.

April 2024: The Central Bank published the Open Finance regulation in the Official Gazette on April 15th, with the aim of establishing a framework for secure data-sharing across the financial services sector.

June 2024: The regulator officially issued the Open Finance Regulation on June 27, 2024. The framework implements a phased approach, requiring some licensed financial institutions (banks and insurance companies) to provide API access before others.

December 2024: By December 2024, the Central Bank had the technology in place and ready for the official launch. The next step was to approve Nebras Open Finance, a new central bank subsidiary created to operate the UAE centralised Open Finance platform.

Regulated institutions will have to integrate with this central platform to comply and participate in the Open Banking market.

The regulation focuses on three main components:

Trust Framework

The trust framework establishes rules, standards and governance for data sharing and service initiation. It includes a directory, digital certificates for secure communication, an API portal for documentation, and a sandbox environment for testing.

The API Hub

The API Hub is a centralised platform that enables access to accounts and services via aggregated APIs, ensuring interoperability and secure communication. This regulator-led platform contrasts with Bahrain and Saudi Arabia’s approach, where the market and technology providers play the leading role.

Common Infrastructural Services

These are a set of standardised services that support Open Finance operations, including:

• • Consent and authorisation management: To handle the creation, management, enforcement, and revocation of consent;
  • Support: To manage onboarding, registration and technical enquiries;
  • Analysis and reporting: To provide insight into participant KPIs and operational data, including service performance, availability, and adoption;
  • Dispute resolution: To facilitate the “management, tracking, adjudication and resolution of cases and disputes”.

The regulation is being rolled out in phases, with the first phase including all banks, branches of foreign banks, and insurance companies (both national and foreign branches). 

Institutions within the regulatory scope will need to assess the regulation and ensure their infrastructure supports open banking. This requires reviewing core banking systems and assessing API readiness. Banks with existing API layers are usually in a stronger position, but this strategic advantage shrinks with a centralised platform.

Open Banking will also push banks to rethink their business models. In other markets, it has already driven increased competition, new fintech services, and more customer control. Banks in the UAE can look to global examples to use APIs to their advantage. 

The UAE’s unique banking environment also offers some additional considerations.

Centralised Platform Approach

The Central Bank’s plan for a centralised platform differs from most jurisdictions where banks are expected to either rely on their own infrastructure or on vendor platforms. This aligns with South Korea’s approach, where the Korea Financial Telecommunications and Clearings Institute (KFTC) operates a central hub.

This approach offers some advantage by removing the need for banks to manage multiple integrations, potentially accelerating adoption. However, banks will still need to develop and integrate with the platform, with the level of effort varying based on their technical capabilities.

Innovating Islamic Banking

Open Banking presents a unique opportunity to strengthen Islamic banking services. The General Council for Islamic Banks and Financial Institutions (CIBAFI) and the Islamic Corporation for the Development of the Private Sector (ICD) have highlighted  Open Banking’s potential for driving digital-first Islamic banking solutions. According to the 2020 CIBAFI Global Islamic Banker’s survey, mobile banking and Open Banking technologies are top priorities for Islamic banks. 

Enhanced remittances

With a substantial expat population in the UAE, remittance outflows are a major consideration. Open Banking can enable banks to offer more efficient and cost-effective remittance services, such as real-time transfers powered by open APIs. 

Overall, Open Banking will make it easier for banks to develop digital services and forge partnerships with relevant fintech providers. However, to seize these opportunities, banks must first assess and revise their infrastructure.

As the regulation starts to reshape the financial services landscape in the UAE, banks and insurance companies are faced with new opportunities and complex challenges. 

Key steps include:

• Assessing existing APIs and infrastructure, 
• Integrating with the centralised platform,
• Learning how to identify tangible use cases for Open Banking.

The future of Open Banking in the UAE is promising—but navigating it successfully will require expertise, foresight, and adaptability. 

Drop us a message to explore how your organisation can comply with Open Banking regulation in the UAE—and turn compliance into a competitive advantage.