UAE Central Bank Unveils Open Finance Framework to Drive Innovation and Consumer Choice

The Central Bank of the UAE (CBUAE) has launched a groundbreaking regulatory framework, the Open Finance Regulation, as part of its ongoing Financial Infrastructure Transformation program. This initiative aims to revolutionize the financial services sector in the UAE by fostering open finance practices. 

Mandatory Participation: All financial institutions under CBUAE supervision must comply with the Open Finance Regulation. This ensures all offerings adhere to established guidelines and promote a standardized approach. 

Data Sharing and Consent: Licensed financial institutions (LFIs) are required to act as data holders and service owners within the Open Finance Framework. This entails granting access to customer data and transaction initiation capabilities, but only with explicit user consent, prioritizing user security and control throughout the process. 

Enhanced Consumer Experience: The Open Finance Framework empowers LFIs to leverage consumer financial data (with consent) to personalize financial services. This facilitates a more tailored and user-centric financial experience. Additionally, the framework promotes seamless data sharing across platforms, allowing consumers to consolidate their financial information for better management. 

Robust Infrastructure: The Open Finance Framework is supported by a robust infrastructure comprising a Trust Framework, an Application Programming Interface (API) Hub, and Common Infrastructural Services. These components provide comprehensive access for secure cross-sectoral data sharing and transaction initiation. 

H.E. Khaled Mohamed Balama, Governor of the CBUAE, emphasized the significance of the regulation: “The Open Finance Regulation establishes a global benchmark for open finance, accelerating the adoption of digital financial services. It empowers both LFIs, who can leverage consumer data, and consumers, who gain access to a wider range of competitive and innovative financial solutions.” 

The CBUAE will implement the Open Finance Regulation in phases, with specific timelines following its publication in the Official Gazette. This regulation represents a significant amendment to the existing Retail Payment Services and Card Schemes Regulation, and promises to transform the UAE’s financial landscape by fostering competition, innovation, and increased consumer choice.