The Central Bank of the UAE (CBUAE) has issued the Open Finance Regulation, which is part of the CBUAE’s Financial Infrastructure Transformation programme.

The said Open Finance Regulation comprises the following key elements:

A Consolidated Trust Framework, which facilitates the validation of participants in the Open Finance Framework and secure communication. It includes an API Portal to hold all documentation and a sandbox to facilitate participants’ testing and official conformance certifications.

An Application Planning Interface (API) Hub, which includes an API manager, which provides an API aggregator. The aggregator will consolidate participant APIs into a single implementation point.

Common Infrastructural Services, which shall include, inter alia, a consent and authorization manager, a platform used to analyze and report operational data, a platform used to facilitate the management, tracking, adjudication and resolution of cases and disputes among participants, a platform for managing all service level enquiries.

These foundational elements provide Open Finance access for the cross-sectoral sharing of data and the initiation of transactions, on behalf of users.

In essence, Open Finance is a framework which allows financial institutions to securely share their systems via APIs with other institutions and accredited third-party providers, enabling them to access customer financial data and deliver personalized financial services solutions. Consumers can consolidate their financial information, through the enablement of seamless data sharing across platforms.

Open finance is an emerging concept revolutionizing the way financial services operate globally. In the UAE, the new regulations are paving the way for greater financial accessibility and innovation. The CBUAE aims to foster innovation throughout the country's financial sector by promoting digital business and service models that emphasize customer consent, enriched data usage, collaboration, security, and a strong focus on customer needs. In all instances, any access to users’ data by licensed financial institutions on behalf of users is contingent upon the explicit consent of those users, prioritizing data privacy. Notably, the Open Finance Platform grants the Financial Service Providers a consumer consent model for sharing their financial data with trusted third parties within an integrated business system.

This approach is designed to empower customers with enhanced transparency and autonomy, enabling them to effectively manage their financial affairs with confidence.

The UAE's Open Finance roadmap strategically catalyzes innovation in its financial sector by enabling cross-sectoral data sharing and transaction initiation on behalf of users. Key to its success is prioritizing essential APIs, which form the backbone of secure and collaborative digital services.

The Open Finance framework aims to create a resilient digital infrastructure. This foundation supports secure and efficient financial services, and continuous improvement in technological, regulatory, and operational capabilities. By focusing on these areas, the framework further aims to ensure that financial institutions can consistently enhance their ability to deliver reliable and innovative digital financial solutions while adhering to stringent standards of security and efficiency.

Ultimately, the roadmap aims to empower customers by providing greater control over their financial affairs.

In addition, it's important to emphasize that participation in the open finance framework is mandatory for all financial institutions supervised by the CBUAE. This requirement ensures that these institutions are fully engaged in and compliant with the regulations and standards established by the CBUAE for open finance initiatives.

For licensed financial institutions, this framework enables access to the necessary financial data to create personalized experiences tailored to each individual's specific data and preferences. This approach enhances the individual's overall experience while ensuring that all interactions occur within a regulated and protected framework for data privacy. Thus, individuals benefit from both personalized services and secure data management.

While the CBUAE previously regulated Payment Initiation Services and Payment Account Information Services under the existing Retail Payment Services and Card Schemes Regulation, the new Open Finance Framework has a broader scope. Hence, the CBUAE will likely integrate these services within the more comprehensive Open Finance Regulation.

In conclusion, as stated by H.E. Khaled Mohamed Balama, Governor of the CBUAE “The introduction of Open Finance Regulation establishes global standards for open finance and accelerates the adoption of digital financial services. This initiative enables licensed financial institutions to harness consumer financial data. On the other hand, it empowers consumers to obtain the best financial solutions, which will drive competition and innovation. We will continue our efforts to develop the financial services sector in the UAE and support its competitiveness globally”. His statement underscores the CBUAE's commitment to advancing UAE's financial services through global standards, fostering competition and innovation, and ensuring consumers have access to the best financial solutions.