Press Releases
CBK Issues Draft Open Banking Regulatory Framework
In keenness to keep up with the latest FinTech innovations, the Central Bank of Kuwait (CBK) announced issuing a draft Open Banking Regulatory Framework.
In a statement, the CBK pointed out to the Open Banking Project, a CBK initiative aiming to regulate the Open Banking activity through regulatory legislations, along with security, technical and operating standards in line with global best practices. This in turn aims to enable local banks and FinTech firms to offer Open Banking services in the State of Kuwait.
Open Banking services represent a new trend in the banking and financial sector through which local banks are able to share customer data with Open Banking Service Providers licensed by the CBK in a secure manner with explicit customer approval, which leads to offering innovative products and services in Kuwait. Such products and services facilitate providing uniform data to customers regarding their local bank accounts, tracking expenses, suggesting spending and saving plans, and accelerating transactions related to loans and letters of guarantee. This is in addition to giving customers the opportunity to explore and compare banking products and services to opt for what best matches their requirements. These services also include creation of payment orders from bank accounts towards settling bills, payment to e-stores and to individuals within and beyond the State of Kuwait, including standing order payments and payments intended for the future.
The CBK statement also pointed out that the draft regulatory framework aims to foster a suitable infrastructure environment for the Kuwaiti banking and financial sector through bolstering partnership between banks and FinTech firms to develop the sector and enhance its services to help promote the national economy and support digitization in line with “New Kuwait 2035” vision.
The CBK had given green light to a FinTech company to test Open Banking services within the CBK’s Regulatory Sandbox (Wolooj) simultaneously while working on the regulatory framework to benefit from this model when preparing instructions and standards for Open Banking services.
The CBK had put out the draft Open Banking Regulatory Framework for feedback and comments ahead of its issue, in its customary approach of stressing transparency, inclusion and partnership. The draft may be accessed through the link available on CBK’s website, and observations and recommendations regarding the documents may be shared for a period of four weeks - as of the date of issue - through the designated email address.
The CBK’s statement also said that once the finalized regulatory framework is issued, Open Banking services would be launched in a phased approach and after sufficient testing to ensure its safety.
The CBK concluded its statement by expressing thanks to Kuwait Banking Association and FinTech firms for their support of the Open Banking project.
