Open banking involves the electronic sharing of financial information securely with licensed third-party providers after obtaining customers’ consent. Getty Images
Open banking involves the electronic sharing of financial information securely with licensed third-party providers after obtaining customers’ consent. Getty Images
Open banking involves the electronic sharing of financial information securely with licensed third-party providers after obtaining customers’ consent. Getty Images
Open banking involves the electronic sharing of financial information securely with licensed third-party providers after obtaining customers’ consent. Getty Images

UAE lenders embrace open banking as they tap into the 'new oil' of customer data


Deepthi Nair
  • English
  • Arabic

What’s the newest commodity on the banking sector's radar? It’s data. Customer data, to be more precise. And it’s being viewed by some as the “new oil” as global lenders jostle to engage retail customers on a personal level and drive new areas of growth during the worst economic crisis since the Great Depression.

Open banking is one of the technologies that lenders have embraced to revolutionise the traditional banking model and boost bottom lines in a Covid-19 world of record low interest rates, slow loan growth and increasing bad debts.

However, privacy concerns persist as open banking, as its name suggests, allows banks to share customer data, such as transaction history and spending patterns, with regulated third-party providers – with the account holder’s consent.

Third-party FinTech platforms, such as Tarabut Gateway, point customers towards financial services and products that are tailored to their specific needs by analysing their spending habits.

“If data is the new oil, then we are building the Mena region’s new pipeline,” says Abdulla Almoayed, chief executive and founder of Tarabut Gateway, which recently opened offices in Abu Dhabi’s tech accelerator Hub71 and DIFC FinTech Hive in Dubai.

“We are an infrastructure provider that works with banks in Bahrain, Kuwait, Beirut, the UK and now the UAE. Sharing data with licensed third parties for a particular objective has helped get people out of debt and supported the creation of personalised financial services.”

The market size of the global open banking industry is set to reach $43.15 billion by 2026, at a compound annual growth rate of 24.4 per cent, according to Allied Market Research.

About 88 per cent of UAE banks expect to enable open banking in the next 12 months as it improves customer service and delivery of new financial services, according to a survey conducted by FinTech firm Finastra in January.

Six out of 10 UAE banks said better customer service and experience capabilities would motivate them to collaborate more with other financial institutions and developers, the survey added.

The coronavirus pandemic is increasing the need for consumers to aggregate their accounts and gain insight into their overall financial health, which is boosting momentum in adoption of open banking, a study by UK-based digital consultancy Juniper Research found.

How the concept of open banking works
How the concept of open banking works

Mukund Bhatnagar, Middle East Africa lead of financial services at Dubai-based consultancy Kearney, says open banking solutions can give customers a comprehensive view of their finances, as well as where they are earning and spending.

“It can also support with budgeting and provide tips on money management based on the insights generated from transaction analytics, such as shopping behaviours and current account balance. Open banking solutions can also help a customer maximise savings and tap into investment opportunities.

“Cons of open banking include banks losing control of customer data and their competitive edge as well as high investments required by banks in legacy IT to become ready to launch an API.”

UAE banks cited reduced control in decision making and complex regulations as the biggest barriers to collaborating with FinTechs for open banking, according to Finastra's survey. Six out of 10 banks in the UAE also said “managers stuck in the old way of thinking” were a big barrier to innovation.

Nonetheless, mainstream banks in the UAE have already begun to implement open banking. Mashreq Bank, for instance, has launched an open banking platform through sandbox environments, which provide a secure and isolated space where developers can test their applications’ code without touching any real accounts or user data.

Open banking is a “gateway to a financial marketplace to obtain non-banking products securely”, Ellis Wang, senior executive vice president and head of technology, transformation and information at Mashreq Bank, says.

If data is the new oil, then we are building the Mena region's new pipeline

For instance, customers may only intend to open a current account but can end up being offered several options, such as insurance services, wealth advice and credit facilities, Mr Wang explains.

“Not all of these services need to be owned by the bank. It can instead make use of open banking technology and partner with other players seamlessly and securely through fully digital transactions,” Mr Wang says.

Meanwhile, Emirates NBD says it was the first UAE bank to enable open banking collaboration with the launch of its application programming interface sandbox in 2018.

“The open banking sandbox environment is a game-changer and enables, simplifies and accelerates innovation for the bank’s employees, and partnerships with FinTechs, start-ups, creative developers, academia and SMEs, ensuring faster speed-to-market on digital banking products and services,” says Evans Munyuki, group chief digital officer at Emirates NBD.

Mr Almoayed, who bootstrapped Tarabut Gateway in Bahrain in 2017, says banks in the Mena region have the most personalised customer data on spending behaviour and transaction history compared to education and healthcare providers, but it is the most underutilised.

Abdulla Almoayed, founder and chief executive of Tarabut Gateway, says open banking will elevate customer experience in the financial industry to the levels offered by global technology companies. Photo: Courtesy Tarabut Gateway
Abdulla Almoayed, founder and chief executive of Tarabut Gateway, says open banking will elevate customer experience in the financial industry to the levels offered by global technology companies. Photo: Courtesy Tarabut Gateway

If banks had properly utilised the data using advanced analytics and artificial intelligence, they would not have offered one-size-fits-all products and services such as mortgages and savings products, he tells The National.

Marie Chowdhry, senior associate, financial services at Pinsent Masons Middle East, says open banking provides an opportunity for FinTechs to build customer solutions that focus on solving a problem and “are not tied to clunky and old banking systems”.

However, there is increasing pressure from consumer advocacy groups and technology players globally for increased transparency on what customer data will be shared with third parties.

“Banks typically need to provide data on customers’ personal information [such as name, date of birth], contact data, account balances and transaction information, including debits, credits [and] beneficiary player details,” says Piyush Dubey, senior principal in Kearney’s Dubai office.

Consumers need to understand exactly what data is being passed to third parties and who these third parties might be, says Steve Cronin, founder of DeadSimpleSaving.com, a non-profit site that helps people invest their money.

“You put yourself at risk of fraud or cybercrime if your details are passed around too widely. If your bank account gets hacked, the bank may not reimburse you if it thinks the hack resulted from you agreeing to pass your details around,” he says.

“The new platform has surely thought about all this, so give them a good grilling on the details until you are satisfied that your money and information will be secure.”

The ongoing coronavirus pandemic is increasing the need for consumers to gain insight into their financial health, thereby boosting open banking adoption. Sarah Dea / The National
The ongoing coronavirus pandemic is increasing the need for consumers to gain insight into their financial health, thereby boosting open banking adoption. Sarah Dea / The National

Mr Almoayed, who is in talks with four UAE banks to roll out his open banking platform, says no third parties will have access to customer data unless users give explicit consent. “Through our infrastructure, customers or the custodian bank have the ability to revoke or grant consent to share their bank data with a third party,” he says.

Consumers of open banking should also be wary of issues surrounding liability when a payment goes wrong. “Who will be responsible for unauthorised transactions? Will it be the FinTech or the bank?” says Ms Chowdhry.

With numerous FinTechs entering the market, customers will also find it difficult to discern which ones will improve their choice and genuinely provide a well-thought through financial solution, she says.

Meanwhile, Mr Wang from Mashreq Bank says open banking regulations need to be validated by the Central Bank of the UAE before they are used on financial products.

Mr Almoayed says Tarabut Gateway is regulated by global regulators such as the Central Bank of Bahrain, licensed by the Abu Dhabi Global Market and is in the process of being regulated by the Dubai Financial Services Authority.

“We have taken lessons from more advanced markets where open banking is prevalent," he explains. "Whether it’s cybersecurity, penetration testing, conformance testing or ISO certification, we have a risk and compliance team that’s working to uphold all these regulations.”

Closing the loophole on sugary drinks

As The National reported last year, non-fizzy sugared drinks were not covered when the original tax was introduced in 2017. Sports drinks sold in supermarkets were found to contain, on average, 20 grams of sugar per 500ml bottle.

The non-fizzy drink AriZona Iced Tea contains 65 grams of sugar – about 16 teaspoons – per 680ml can. The average can costs about Dh6, which would rise to Dh9.

Drinks such as Starbucks Bottled Mocha Frappuccino contain 31g of sugar in 270ml, while Nescafe Mocha in a can contains 15.6g of sugar in a 240ml can.

Flavoured water, long-life fruit juice concentrates, pre-packaged sweetened coffee drinks fall under the ‘sweetened drink’ category
 

Not taxed:

Freshly squeezed fruit juices, ground coffee beans, tea leaves and pre-prepared flavoured milkshakes do not come under the ‘sweetened drink’ band.

Origin
Dan Brown
Doubleday

BIGGEST CYBER SECURITY INCIDENTS IN RECENT TIMES

SolarWinds supply chain attack: Came to light in December 2020 but had taken root for several months, compromising major tech companies, governments and its entities

Microsoft Exchange server exploitation: March 2021; attackers used a vulnerability to steal emails

Kaseya attack: July 2021; ransomware hit perpetrated REvil, resulting in severe downtime for more than 1,000 companies

Log4j breach: December 2021; attackers exploited the Java-written code to inflitrate businesses and governments

UAE currency: the story behind the money in your pockets
BUNDESLIGA FIXTURES

Friday Stuttgart v Cologne (Kick-off 10.30pm UAE)

Saturday RB Leipzig v Hertha Berlin (5.30pm)

Mainz v Borussia Monchengladbach (5.30pm)

Bayern Munich v Eintracht Frankfurt (5.30pm)

Union Berlin v SC Freiburg (5.30pm)

Borussia Dortmund v Schalke (5.30pm)

Sunday Wolfsburg v Arminia (6.30pm)

Werder Bremen v Hoffenheim (9pm)

Bayer Leverkusen v Augsburg (11.30pm)

The biog:

Languages: Arabic, Farsi, Hindi, basic Russian 

Favourite food: Pizza 

Best food on the road: rice

Favourite colour: silver 

Favourite bike: Gold Wing, Honda

Favourite biking destination: Canada 

COMPANY%20PROFILE%20
%3Cp%3E%3Cstrong%3ECompany%20name%3A%20%3C%2Fstrong%3ENomad%20Homes%3Cbr%3E%3Cstrong%3EStarted%3A%20%3C%2Fstrong%3E2020%3Cbr%3E%3Cstrong%3EFounders%3A%20%3C%2Fstrong%3EHelen%20Chen%2C%20Damien%20Drap%2C%20and%20Dan%20Piehler%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20UAE%20and%20Europe%3Cbr%3E%3Cstrong%3EIndustry%3C%2Fstrong%3E%3A%20PropTech%3Cbr%3E%3Cstrong%3EFunds%20raised%20so%20far%3A%3C%2Fstrong%3E%20%2444m%3Cbr%3E%3Cstrong%3EInvestors%3A%3C%2Fstrong%3E%20Acrew%20Capital%2C%2001%20Advisors%2C%20HighSage%20Ventures%2C%20Abstract%20Ventures%2C%20Partech%2C%20Precursor%20Ventures%2C%20Potluck%20Ventures%2C%20Knollwood%20and%20several%20undisclosed%20hedge%20funds%3C%2Fp%3E%0A
Key facilities
  • Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
  • Premier League-standard football pitch
  • 400m Olympic running track
  • NBA-spec basketball court with auditorium
  • 600-seat auditorium
  • Spaces for historical and cultural exploration
  • An elevated football field that doubles as a helipad
  • Specialist robotics and science laboratories
  • AR and VR-enabled learning centres
  • Disruption Lab and Research Centre for developing entrepreneurial skills
Sole survivors
  • Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
  • George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
  • Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
  • Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
The most expensive investment mistake you will ever make

When is the best time to start saving in a pension? The answer is simple – at the earliest possible moment. The first pound, euro, dollar or dirham you invest is the most valuable, as it has so much longer to grow in value. If you start in your twenties, it could be invested for 40 years or more, which means you have decades for compound interest to work its magic.

“You get growth upon growth upon growth, followed by more growth. The earlier you start the process, the more it will all roll up,” says Chris Davies, chartered financial planner at The Fry Group in Dubai.

This table shows how much you would have in your pension at age 65, depending on when you start and how much you pay in (it assumes your investments grow 7 per cent a year after charges and you have no other savings).

Age

$250 a month

$500 a month

$1,000 a month

25

$640,829

$1,281,657

$2,563,315

35

$303,219

$606,439

$1,212,877

45

$131,596

$263,191

$526,382

55

$44,351

$88,702

$177,403

 

What to watch out for:

Algae, waste coffee grounds and orange peels will be used in the pavilion's walls and gangways

The hulls of three ships will be used for the roof

The hulls will painted to make the largest Italian tricolour in the country’s history

Several pillars more than 20 metres high will support the structure

Roughly 15 tonnes of steel will be used

Jumanji: The Next Level

Director: Jake Kasdan

Stars: Dwayne Johnson, Kevin Hart, Karen Gillan, Jack Black, Nick Jonas 

Two out of five stars 

What are the GCSE grade equivalents?
 
  • Grade 9 = above an A*
  • Grade 8 = between grades A* and A
  • Grade 7 = grade A
  • Grade 6 = just above a grade B
  • Grade 5 = between grades B and C
  • Grade 4 = grade C
  • Grade 3 = between grades D and E
  • Grade 2 = between grades E and F
  • Grade 1 = between grades F and G
EA%20Sports%20FC%2024
%3Cp%3EDeveloper%3A%20EA%20Vancouver%2C%20EA%20Romania%3Cbr%3EPublisher%3A%20EA%20Sports%3Cbr%3EConsoles%3A%20Nintendo%20Switch%2C%20PlayStation%204%26amp%3B5%2C%20PC%20and%20Xbox%20One%3Cbr%3ERating%3A%203.5%2F5%3C%2Fp%3E%0A
Honeymoonish
%3Cp%3E%3Cstrong%3EDirector%3A%3C%2Fstrong%3E%20Elie%20El%20Samaan%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStarring%3A%20%3C%2Fstrong%3ENour%20Al%20Ghandour%2C%20Mahmoud%20Boushahri%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%203%2F5%3C%2Fp%3E%0A
COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3ECompany%20name%3A%3C%2Fstrong%3E%20Revibe%20%0D%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%202022%0D%3Cbr%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Hamza%20Iraqui%20and%20Abdessamad%20Ben%20Zakour%20%0D%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20UAE%20%0D%3Cbr%3E%3Cstrong%3EIndustry%3A%3C%2Fstrong%3E%20Refurbished%20electronics%20%0D%3Cbr%3E%3Cstrong%3EFunds%20raised%20so%20far%3A%3C%2Fstrong%3E%20%2410m%20%0D%3Cbr%3E%3Cstrong%3EInvestors%3A%20%3C%2Fstrong%3EFlat6Labs%2C%20Resonance%20and%20various%20others%0D%3C%2Fp%3E%0A
While you're here
The specs

Engine: 3.0-litre 6-cyl turbo

Power: 435hp at 5,900rpm

Torque: 520Nm at 1,800-5,500rpm

Transmission: 9-speed auto

Price: from Dh498,542

On sale: now

Specs%3A%202024%20McLaren%20Artura%20Spider
%3Cp%3E%3Cstrong%3EEngine%3A%3C%2Fstrong%3E%203.0-litre%20twin-turbo%20V6%20and%20electric%20motor%3Cbr%3E%3Cstrong%3EMax%20power%3A%3C%2Fstrong%3E%20700hp%20at%207%2C500rpm%3Cbr%3E%3Cstrong%3EMax%20torque%3A%3C%2Fstrong%3E%20720Nm%20at%202%2C250rpm%3Cbr%3E%3Cstrong%3ETransmission%3A%3C%2Fstrong%3E%20Eight-speed%20dual-clutch%20auto%3Cbr%3E%3Cstrong%3E0-100km%2Fh%3A%3C%2Fstrong%3E%203.0sec%3Cbr%3E%3Cstrong%3ETop%20speed%3A%20%3C%2Fstrong%3E330kph%3Cbr%3E%3Cstrong%3EPrice%3A%3C%2Fstrong%3E%20From%20Dh1.14%20million%20(%24311%2C000)%3Cbr%3E%3Cstrong%3EOn%20sale%3A%3C%2Fstrong%3E%20Now%3C%2Fp%3E%0A
Cases of coronavirus in the GCC as of March 15

Saudi Arabia – 103 infected, 0 dead, 1 recovered

UAE – 86 infected, 0 dead, 23 recovered

Bahrain – 210 infected, 0 dead, 44 recovered

Kuwait – 104 infected, 0 dead, 5 recovered

Qatar – 337 infected, 0 dead, 4 recovered

Oman – 19 infected, 0 dead, 9 recovered

About Takalam

Date started: early 2020

Founders: Khawla Hammad and Inas Abu Shashieh

Based: Abu Dhabi

Sector: HealthTech and wellness

Number of staff: 4

Funding to date: Bootstrapped

Uefa Nations League

League A:
Germany, Portugal, Belgium, Spain, France, England, Switzerland, Italy, Poland, Iceland, Croatia, Netherlands

League B:
Austria, Wales, Russia, Slovakia, Sweden, Ukraine, Republic of Ireland, Bosnia-Herzegovina, Northern Ireland, Denmark, Czech Republic, Turkey

League C:
Hungary, Romania, Scotland, Slovenia, Greece, Serbia, Albania, Norway, Montenegro, Israel, Bulgaria, Finland, Cyprus, Estonia, Lithuania

League D:
Azerbaijan, Macedonia, Belarus, Georgia, Armenia, Latvia, Faroe Islands, Luxembourg, Kazakhstan, Moldova, Liechtenstein, Malta, Andorra, Kosovo, San Marino, Gibraltar

ALRAWABI%20SCHOOL%20FOR%20GIRLS
%3Cp%3ECreator%3A%20Tima%20Shomali%3C%2Fp%3E%0A%3Cp%3EStarring%3A%C2%A0Tara%20Abboud%2C%C2%A0Kira%20Yaghnam%2C%20Tara%20Atalla%3C%2Fp%3E%0A%3Cp%3ERating%3A%204%2F5%3C%2Fp%3E%0A
The biog

Name: Mariam Ketait

Emirate: Dubai

Hobbies: I enjoy travelling, experiencing new things, painting, reading, flying, and the French language

Favourite quote: "Be the change you wish to see" - unknown

Favourite activity: Connecting with different cultures

Donating your hair

    •    Your hair should be least 30 cms long, as some of the hair is lost during manufacturing of the wigs.
    •    Clean, dry hair in good condition (no split ends) from any gender, and of any natural colour, is required.
    •    Straight, wavy, curly, permed or chemically straightened is permitted.
    •    Dyed hair must be of a natural colour
 

 

Israel Palestine on Swedish TV 1958-1989

Director: Goran Hugo Olsson

Rating: 5/5

THE%C2%A0SPECS
%3Cp%3EEngine%3A%204-cylinder%202.5-litre%20%2F%202-litre%20turbo%0D%3Cbr%3EPower%3A%20188hp%20%2F%20248hp%0D%3Cbr%3ETorque%3A%20244Nm%20%2F%20370Nm%0D%3Cbr%3ETransmission%3A%207-speed%20auto%0D%3Cbr%3EOn%20sale%3A%20now%0D%3Cbr%3EPrice%3A%20From%20Dh110%2C000%0D%3C%2Fp%3E%0A
The White Lotus: Season three

Creator: Mike White

Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell

Rating: 4.5/5

While you're here
MISSION: IMPOSSIBLE – FINAL RECKONING

Director: Christopher McQuarrie

Starring: Tom Cruise, Hayley Atwell, Simon Pegg

Rating: 4/5