MENA Report:

From Open Banking

to Open Finance

An $11.74Bn Opportunity
Contents
1.0 INTRODUCTION 3

2.0 FROM OPEN BANKING TO OPEN FINANCE 7

3.0 GENERAL OVERVIEW ON MENA 10

3.1 United Arab Emirates 11

3.2 Saudi Arabia 13

3.3 Bahrain 15

3.4 Kuwait 17

3.5 Oman 19

3.6 Egypt 21

3.7 Jordan 23

3.8 Iraq 25

WHAT’S HOLDING OPEN BANKING BACK

4.0 27
VS OPEN BANKING KEY DRIVERS IN MENA?

5.0 FINX - YOUR OPEN FINANCE PARTNER 29

2
 1.0 Introduction

The digital pace that our world took decades ago has skyrocketed with the appearance
of modern tech-savvy financial products and services, aiming to improve industry and
people’s lives overall. That’s why the adoption rate of Open Banking and Open Finance is
set to grow rapidly all over the world. Tech-savvy and hungry for innovation, the MENA
region is gaining traction in working towards Open Banking and Open Finance. The
local Open Banking market, driven by the impact of the COVID-19 pandemic and the
population being young and digitally advanced, is expected to grow by 25% annually
during the next 5 years. The Open Finance market, as a tool for accelerating financial
inclusion in the MENA region, is projected to nearly double by 2027.

We’ve been witnessing the genesis of Open Banking technology, and some of us even
had a chance to benefit from a cluster of use cases emerging from this phenomenon.

But do you know what the most exciting thing about Open Banking is?
Open Banking is just the first step in a challenging and captivating journey called Open
Finance.​

As a starting point, let’s sum up what Open Banking is. Open Banking is the process of
consumer financial data exchange (with the user’s consent) between banks/Financial
Institutions (FIs) and Third-Party Providers (TPPs) via secure Application Programming
Interfaces (APIs). The overriding objective of Open Banking includes enhancing financial
services for consumers, boosting the industry’s digital innovation, and accelerating the
rise of new FinTech companies to create modern products and services to benefit all the
ecosystem participants.​

Financial Inclusion is high on the global Open Banking/Finance agenda, aiming to ensure
that financial services are accessible to more of the world’s population at a reasonable
cost. This means we need to look at both the underbanked and the unbanked.

3
Open Banking grants consent to regulated Account Information Service Providers (AISP)
to access Account Information, including transaction history, thus offering businesses and
customers a complete financial overview to manage their day-to-day financial activities with
confidence in just one app. The information from all bank accounts can be viewed in one place,
simplifying the process of tracking, analyzing, and managing finances. Open Banking-enabled
PFM apps revolutionize the way end-customers and businesses manage their finances and
offer a 360-degree view of their financial life.

Globally, the Open Banking market size is estimated at $18.02Bn in 2022 and forecasted to
reach $54.69Bn in 2027 with a CAGR of 24%.

Open Banking Global Market Size

2022 $18.02Bn

2027 $54.69Bn

Source: Market Reports, World Bank, CBE, MRP, Magnitt, AMF, Statista; Ntsal Analyses

4
Meanwhile, the MENA region is developing fast, leveraging the best Open Banking practices
​
from all over the world with most of the region’s population being young and showing one of
​
the highest rates of smartphone usage worldwide. The regional Open Banking market size is
estimated between $0.35-0.42Bn in 2022 and is forecasted to grow with an average CAGR of
​
25% to reach $1.17Bn by 2027.​
​

Open Banking Regional Market

2022 $0.38Bn
BASE
CASE
2027 $1.17Bn

2022 $0.38Bn
HIGH
CASE
2027 $1.73Bn

Source: Market Reports, World Bank, CBE, MRP, Magnitt, AMF, Statista; Ntsal Analyses

Open Finance oversteps the boundaries of data available at the financial institution, comprising
the customer’s complete financial footprint. While Open Banking is subject to the legal and
regulatory framework and is based on sharing the basic bank account data, Open Finance
is not subject to regulation yet and supplies more granular data across a wider spectrum of
services. Just like Open Banking,

Open Finance aims to provide customers with full control of their financial data - not only bank
data but also data related to:​
• Investments ​
• Tax ​
• Insurance ​
• Mortgages ​
• Saving accounts, and much more
​Open Finance data can be used to build better-tailored personalized services to bring value to
customers – be it by providing unique data-driven insights, enhancing the user experience, or
streamlining payments.​

5
​ he global Open Finance market size is estimated at $56.74Bn in 2022 and forecasted to reach
T
$572.98Bn in 2027 with a CAGR of 59%.​

Open Finance Global Market Size

2022 $56.75Bn

2027 $572.98Bn

Source: Market Reports, World Bank, CBE, MRP, Magnitt, AMF, Statista; Ntsal Analyses

The appetite for Open Finance is growing in the Middle East, courtesy of the government
supporting this initiative and to the digitally native consumers in the region. The regional Open
Finance market size is estimated between $1.65-2.01Bn in 2022 and forecasted to grow with
an average CAGR of 45% to reach $11.74Bn by 2027.​

Open Finance Regional Market

2022 $1.83Bn
BASE
CASE
2027 $11.74Bn

2022 $1.83Bn
HIGH
CASE
2027 $19.20Bn

Source: Market Reports, World Bank, CBE, MRP, Magnitt, AMF, Statista; Ntsal Analyses

6
2.0 From Open Banking to
Open Finance

The concept of Open Finance

​
has the pulsion to realize
the full potential of Open Banking, making the account
aggregation more insightful and fully-fledged by bringing
not only customers’ bank accounts but also investment and
savings accounts into one user-friendly interface. Also, Open
Finance can enable automatic transfers between savings
and investment accounts.​

Another important mission that Open Finance covers is

financial inclusion. It can become a real game-changer for the
underbanked, unbanked, and other financially excluded and
vulnerable groups who don’t have access to proper financial
services, thus creating affordable financial products that
are sustainable for businesses and beneficial for the whole
industry.​

Open Finance helps to bridge the financial inclusion gap by

creating opportunities for both businesses and individuals.
Financial inclusion is not only about making services
affordable and convenient, but also about maintaining the
highest level of security and sustainability. For example,
Open Finance can easily solve issues linked to low-income
populations’ access to innovative products and services,
helping them save, invest, gain access to lending products,
and effectively manage personal finances, thus ensuring
financial stability and granting financial services equation. ​

We believe that Open Finance can fundamentally transform

business models and solve age-old problems. And we have
all the Open Finance tools to help drive innovation and
competition between services like never before, providing
embedded, personalized solutions and supporting financial
inclusion.​

7
Europe
​
Traditionally, when we talk about open banking, one might imply the PSD2 regulation in Europe
and Open Banking in the UK. And it’s fair enough. The Revised Payment Services Directive,
otherwise known as PSD2, which came into effect in September 2019, is a set of laws in the EU
which aims to enable exchange of consumer data between banks and regulated third parties
with the consent of the consumer, streamline payments, and boost innovation.​

The UK ​
The UK pioneered the PSD2 with its Open Banking Standard, mandating data sharing among
its biggest banks – CMA9, and then followed by other local banks. Having in place a unified
common standard, that makes it easier for businesses to access the data, the UK is seen as the
leader in open banking infrastructure, delivering innovative features such as app-to-app and
biometric authentication, and instant payments vested in the Faster Payments network.​

The US
​
The open banking development in the US has an industry-driven nature. Without having in
place regulatory framework, US biggest banks started with Screen Scraping, and later began
building open APIs. To bolster the innovation and promote mass adoption of the phenomenon,
larger US banks, that are well aware of the strategic importance of Open Banking, agreed to
standards set by bodies like the Financial Data Exchange (FDX), to grant secure and stable
access to financial data FDX developed the FDX API.​

Brazil ​
Brazil started its journey to open banking heaven in 2018 with country’s Data Protection
Law, and then in May 2020 followed by the regulation introduced by the Central Bank of
Brazil (BACEN). The Central Bank of Brazil considers Open Banking as a long-term project
to shift country’s financial system towards a consumer-centric one. As a major step to Open
Banking innovation, in November 2020 was launched PIX. Also, Brazil has a scope to broader
applicability of Open Banking maturing to Open Finance, working on the concept of financial
citizenship, which seeks to see financial inclusion, financial consumer protection, and financial
education in a holistic and integrated way.​

Australia ​
Australia has chosen the path of simultaneous Open Banking and Open Finance adoption and
implementation. The Consumer Data Right Act (CDR) came into force in 2020, and represents
a general right being created for consumers to control their data, allowing consumers to share
their banking data with authorized third parties of their choice. The CDR’s broad applicability
includes utilities, telecoms and even travel data.

8
Canada ​
​Canada is working on Open Banking framework and has appointed an open banking lead in
2022, who is responsible for overseeing the implementation of Canada’s open banking regime.
But the industry has taken responsibility for implementing standards, launching FDX Canada
in July 2020 with a similar membership profile and mission as its US equivalent.​

​
Asia ​
​The Monetary Authority of Singapore (MAS) and the Hong Kong Monetary Authority (HKMA)
are known for their progressive, forward-thinking approach to the role financial technology
can have in their local economies. It’s no surprise that both geographies are looking at open
banking to innovate and foster competition in their markets. APIs are not standardized yet, and
access to them is granted based on bilateral agreements between the banks and FinTechs.​

Middle East ​
Meanwhile, much of the Arab world is developing fast, leveraging the best Open Banking
practices from all over the world. Employing European-style regulatory-driven approaches and
American-style market-led approaches, Open Banking in the Middle East shows impressive
results. Bahrain, for example, has been leading MENA in terms of adopting Open Banking
policies and introducing its Open Banking Framework (OBF) in 2020 to define standards and
encourage the adoption of open banking. KSA has strengthened the concept of financial
inclusion by rolling out 8 open banking use cases, 4 out of each are business use cases. Oman
has reported working on its Open Banking initiatives, aiming to keep up with the rest of the
region.

9
3.0 General overview on MENA​

Open Banking is steadily penetrating

most of the world’s regions and MENA is
no exception. The majority of the region’s
population is young with one of the highest
rates of smartphone usage globally,
proving that MENA region is more than
ready to fully welcome Open Banking.​
​
The last couple of years brought important
Open Banking regulatory developments
in Arab countries, with Bahrain and KSA
being on the frontline alongside UAE,
Kuwait and other countries following.
The regulators and other industry players
keep pushing things forward and this
article will focus on understanding how
successful they have been up until now
and what can be further done to ensure a
prolific implementation of Open Banking.​

Let’s deep dive into each country in the

region and see the current state of Open
Banking in each of them.
​

10
3.1 United Arab Emirates​

Key Takeaway: ​ Assumptions:

• The UAE’s open banking market has been

constantly growing, driven by the following

factors:
40%
• Although the UAE is currently still lagging
behind Bahrain and KSA when it comes
to open banking policies, there has been
gradual accelerating steps toward the OF Market
introduction of open banking regulations.​ CAGR 2022-2027​
(The compound
• Strong competition and awareness between annual growth rate)
local and international players in the banking
and financial sector, with over 88% of UAE’s
banks willing to participate in open banking.​

• UAE is a regional hub for FinTech startups

in terms of number of startups, total market
value, and attractiveness of VC investments
(historically accounted for more than half of 70%
the region’s FinTech funding).​

• The highest levels of digitization and financial

inclusion in the region with 84.6% banked Estimated
adult population and 46.6% of adults using Discount Factor
online banking.
(Net present value)
​

Source: World Bank, Central Bank of UAE,

AMF, Magnitt, Statista, Ntsal analysis.
11
8.24Mn $26.28Bn 45 134+

Adult Digital Payments Number Number

Population Market of Banks of FinTechs

FINANCIAL INCLUSION FACTORS

Account Ownership

32.0% 68.0%
Unbanked Banked

68.0% 32.0%

26.8% 46.6% 88%

Adults own Adults used Adults made
a credit card Online Banking Digital payments
in the last year

12
3.2 Saudi Arabia

Key Takeaway: ​ Assumptions:

• The KSA, with one of the largest economies

in the region and worldwide, has the largest
market in the GCC in terms of banked
population and digital payment transaction 35%
volumes.

• In January 2021, KSA’s Central Bank launched

its Open Banking Policy, setting out a 3-phased OF Market
approach that contemplates the launch or CAGR 2022-2027​
go-live of Open Banking within the Kingdom. (The compound
• SAMA took a proactive approach to promoting annual growth rate)
financial inclusion and extended the scope
of its Open Banking regulatory framework to
business use cases, as well:

• Enterprise Financial Management, Letter of

Guarantee, Credit Risk Scoring, and Tax Filing
as Service.  70%
• Originally choosing to follow a market-driven
approach, KSA has then put in place plans to
mandate open banking and intends to roll out Estimated
AISP regulation in 2022, and PISP in 2023 Discount Factor
following a phased approach with its banks.
(Net present value)
• The market is ready for fast adoption and
implementation of open banking policies, that
would result in swift market growth in the
early stages of the forecast period.  Source: World Bank, Central Bank of Saudi
(SAMA), AMF, openbankingmap, Statista,
Ntsal analysis. 13
26.22 Mn $42.25Bn 36 155

Adult Digital Payments Number Number

Population Market of Banks of FinTechs

FINANCIAL INCLUSION FACTORS

Account Ownership

25.7% 74.3%
Unbanked Banked

74.3% 25.7%

25.4% 25.7% 89%

Adults own Adults used Adults made
a credit card Online Banking Digital payments
in the last year
14
3.3 Bahrain

Key Takeaway: ​ Assumptions:

• Bahrain is among the region’s leaders when

it comes to open banking, especially in
regard to regulations.
30%
• Bahrain has been ahead of the MENA
countries with respect to the introduction
of open banking policies, introducing the OF Market
Bahrain Open Banking Framework (OBF) in CAGR 2022-2027​
2020 to define standards and encourage (The compound
the adoption of open banking.
annual growth rate)
• Despite it being a relatively Caped market
due to its small size in terms of population,
number of banks, and number of fintech
companies compared to its peers in
the region, Bahrain would be the first to
successfully unlock the potential of its open
banking market, and lead the market’s 70%
growth in the region through the next couple
of years.
​ Estimated
Discount Factor
(Net present value)

Source: World Bank, Central Bank of

Bahrain, AMF, Statista, Ntsal analysis.
15
1.38Mn $1.88Bn 87 120

Adult Digital Payments Number Number

Population Market of Banks of FinTechs

FINANCIAL INCLUSION FACTORS

Account Ownership

15.0% 85.0%
Unbanked Banked

85.0% 15.0%

29.9% 29% 69%

Adults own Adults used Adults made
a credit card Online Banking Digital payments
in the last year
16
3.4 Kuwait

Key Takeaway: ​ Assumptions:

• The development of Kuwait’s fintech sector

has been more modest than that of its peers
in the GCC, resulting in the country’s lower
prominence as a financial center compared
25%
with its neighbors.

• While Kuwait’s fintech credentials may fall
short of its rivals, the country has made
OF Market
solid progress on its digital banking licensing CAGR 2022-2027​
regime, placing it alongside the likes of Bahrain (The compound
& Saudi Arabia, and arguably ahead of the annual growth rate)
UAE.

• New policies and regulations introduced
by the CBK may herald a new dawn for the
fintech scene as they are considered a game-
changer for both digital banking and the
fintech landscape in Kuwait in general. 50%

• The new developments in the regulatory
landscape are expected to boost the innovation
in the digital banking sector and pave the way Estimated
for the open banking and open finance wave Discount Factor
led by neighboring GCC countries. (Net present value)

​
Source: World Bank, Central Bank of Kuwait,
AMF, Findexable, Long Finance, the banker,
Statista, Ntsal analysis.
17
3.11Mn $10.09Bn 10 57

Adult Digital Payments Number Number

Population Market of Banks of FinTechs

FINANCIAL INCLUSION FACTORS

Account Ownership

20.2% 79.8%
Unbanked Banked

79.8% 20.2%

22.3% 23.8% 63%

Adults own Adults used Adults made
a credit card Online Banking Digital payments
in the last year
18
3.5 Oman

Key Takeaway: ​ Assumptions:

• The Central Bank of Oman (CBO) has been

working on an open banking initiative, an
indication that the country is moving towards
strengthening its FinTech ecosystem and 25%
modernizing its banking industry.

• Oman Banks Association (OBA) has been

incentivizing banks and lending institutions OF Market
in Sultanate to welcome new technological CAGR 2022-2027​
innovations in the global banking and financial (The compound
services landscape including Big Data, cyber annual growth rate)
forensics, Artificial intelligence, and open
banking.

• The ongoing digital revolution sweeping

across the financial sector in Oman driving
traditional banks to increase embracing new
technologies to remain competitive, increase 50%
market share, and target new customer
segments.

Estimated
​ Discount Factor
(Net present value)

Source: World Bank, Central Bank of Oman,

AMF, KPMG, OBA, Statista, Ntsal analysis.
19
2.26Mn $6.41Bn 20 5

Adult Digital Payments Number Number

Population Market of Banks of FinTechs

FINANCIAL INCLUSION FACTORS

Account Ownership

26.4% 73.6%
Unbanked Banked

73.6% 26.4%

22.3% 23.8% 63%

Adults own Adults used Adults made
a credit card Online Banking Digital payments
in the last year
20
3.6 Egypt

Key Takeaway: ​ Assumptions:

• Egypt has been one of the countries actively

involved in the discussion on how to
implement open banking. Recent initiatives
by the regulators are expected to boost the
digital banking sector and pave the way for
25%
a full introduction to open banking in the near
future.
OF Market
• The IPN represents the first execution of open CAGR 2022-2027​
banking transactions in Egypt, pioneering (The compound
the deployment of APIs for managing bank
annual growth rate)
accounts in real-time, in addition to the
initiation of a regulatory sandbox by the CBE
as a live testing ground for startups that are
developing new banking models. 

• New policies mandating public sector use

of e-payments and easing documentation
requirements to open accounts are spurring 50%
investments in e-payment platforms.

• Despite its current low levels of digitization

and financial inclusion, Egypt remains one Estimated
of the most attractive fintech destinations Discount Factor
(outside of the GCC) and one of the largest (Net present value)
markets in the region in terms of population
and digital payment transaction volumes,
which showcase its huge growth potential
through the coming years. Source: World Bank, Central Bank of Egypt,
AMF, FinTech Egypt, Statista, Ntsal analysis.
21
67.62Mn $13.54Bn 37 118

Adult Digital Payments Number Number

Population Market of Banks of FinTechs

FINANCIAL INCLUSION FACTORS

Account Ownership

73.9% 26.1%
Unbanked Banked

26.1% 73.9%

2.8% 2.25% 8%
Adults own Adults used Adults made
a credit card Online Banking Digital payments
in the last year
22
3.7 Jordan

Key Takeaway: ​ Assumptions:

• Jordan has a sound regulatory environment

and is working on numerous ongoing
initiatives toward the digitization of the
banking sector. 15%
• The Payment infrastructure of Jordan is robust
and highly developed for banks, NBFCs, and
PSPs (Payment Service Providers) to support
OF Market
domestic and international payments. CAGR 2022-2027​
(The compound
• Access to (DFS) digital financial services is annual growth rate)
improving, bolstered by international
partnerships and a strong ICT infrastructure,
but access is concentrated in urban areas.

• There are some regulatory constraints

impacting the growth of digital financial
services, for example: The absence to date of
a KYC-lite and e-signature. 
40%
• Despite a sound technological infrastructure,
Jordan is still way below its DFS market Estimated
potential due to general issues like financial Discount Factor
literacy, lack of awareness, and limited trust (Net present value)
in financial institutions, resulting in a low level
of financial inclusion.

Source: World Bank, Central Bank of Jordan,

AMF, USAID, Statista, Ntsal analysis.
​
23
6.85Mn $6.15Bn 22 24

Adult Digital Payments Number Number

Population Market of Banks of FinTechs

FINANCIAL INCLUSION FACTORS

Account Ownership

56.7% 43.4%
Unbanked Banked

43.4% 56.7%

2.77% 4.3% 21%

Adults own Adults used Adults made
a credit card Online Banking Digital payments
in the last year
24
3.8 Iraq

Key Takeaway: ​ Assumptions:

• e-banking and digital payments are reported

as major underdeveloped sectors in Iraq.

• Iraq is adopting fintech at a slow pace, and

15%
overall investment in fintech and the enactment
of related regulations have been low, compared
to other countries in the region. This is due to
OF Market
many factors, including:
CAGR 2022-2027​
-The large unbanked population.  (The compound
annual growth rate)
-The cost of internet and mobile services,relative
to income, which limits demand for digital
financial services.

-Large dependency on cash transactions due

to concerns about the security of online
payments.
20%
• While the use of mobile and electronic payment
services is not prominent in Iraq as in other
countries in the region, it is forecasted to Estimated
witness rapid growth by the second half of the Discount Factor
forecast period.
(Net present value)
• Regulations organizing the fintech industry
in Iraq are still underdeveloped, but slowly
adopting to be in favour of digitization and
Source: World Bank, Central Bank of Iraq,
FinTechs. AMF, Al Jad Law Statista, Ntsal analysis.
25
25.05Mn $7.86Bn 39 14

Adult Digital Payments Number Number

Population Market of Banks of FinTechs

FINANCIAL INCLUSION FACTORS

Account Ownership

84.2% 15.8%
Unbanked Banked

15.8% 84.2%

1.6% 6.0% 10%

Adults own Adults used Adults made
a credit card Online Banking Digital payments
in the last year
26
4.0 What’s holding Open Banking
back vs Open Banking Key drivers
in MENA?
Key drivers behind these improvements include the implementation of regulatory standards,
consumer adoption of domestic instant payment methods, and increased levels of bank
integration. Areas for improvement include improved collaboration between banks,
governments, regulators, and TPPs at the local and global level to address a lack of
standardisation and inconsistent levels of regulatory oversight and enforcement.

What’s still holding OB back in the region? 

Limited technical Need to coordinate

expertise within activities of multiple
market stakeholders regulators
 

Limited funding Unclear regulatory 

for the regulators  jurisdiction 

Low percentage Lack of willingness

of banks-fintech on behalf of banks
partnerships   

27
 Key drivers of OB in MENA 

• COVID-19 pandemic, which has accelerated the drive towards digitalisation

for banks and regulators alike.

• MENA region is emerging as a hotspot for investments.

• The region’s high level of internet penetration and mobile phone usage, and
a population that embraces digital solutions.

• The central bank of Bahrain during November 2020 released the second
phase of OB regulations, the Bahrain Open Banking Framework (BOBF).
Even Iran is pushing on API  technologies due to developing its own Open
Banking system.

• Saudi Arabia recently shifted from an industry-led approach to a legislative

approach to accelerate adoption.

• UAE has become a hive of fintech activity – 465 FinTechs there are set
to generate over $2B in investment capital funding in the upcoming year,
compared to merely $80M five years ago.

28
5.0 FINX - Your Open Finance Partner

Open Banking and Open Finance hold a promise to transform the future of financial
services. To embrace the value and benefits of Open Banking and Open Finance today, you
need a trusted partner, a partner in innovation. 
Contact our team for more information on how FINX can empower you to build financial
services of the next generation by integrating Open Banking payments and financial data to
enhance your experiences and delight your customer.s. 

About FINX

FINX by Fintech Galaxy is the open finance platform aiming to democratize financial
services by providing a stable and secure API infrastructure. It brings together
and connects industry players and provides end-users more control than ever over
their financial data. 

FINX comprises two directions:

Comply - SaaS solution for neo banks and

traditional banks offering an Open API Gateway
with out-of-the-box compliance with AIS/PIS APIs,
TPP Management, Strong Customer Authentication
(SCA) and Fine-Grain Consent Management based
on regional and global standards.
​

Connect - an Open Finance API aggregation

platform integrated with multiple Bank APIs
through a single API gateway, providing secure
and consent-driven access to enrich customers’
account information (AIS) across a wide range of
financial products, as well as payment initiation
capabilities (PIS), thus efficaciously reducing costs
and increasing payment acceptance security. 

29
Contact Us

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Office 2010, Silicon Oasis

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30
2022 Fintech Galaxy