Open banking has been identified as a core pillar of the Kingdom of Saudi Arabia’s vision to drive economic growth, leading the Kingdom to set hard deadlines for banks to develop and deploy open banking platforms in line with the latest local regulatory standards. Here’s how Bank Albilad (BAB) did it – and with time to spare.
The wheels were set in motion in September 2016 when the Kingdom of Saudi Arabia (KSA) announced a strategic framework to reduce its dependence on oil, diversify and modernize its economy, and develop public service sectors such as health, education, infrastructure, recreation, and tourism. A long-term strategy, Vision 2030, was distilled into three key themes: a vital society, an ambitious nation, and most notably, a thriving economy.
Five years later, as the Kingdom progressed towards its new transformative goals of driving economic growth, the Saudi Central Bank (SAMA), in line with the Financial Sector Development Program (FSDP) launched the open banking rollout in 2021. The intention was to turn the KSA into a ‘global fintech hub where technology-based innovation in financial services is the foundation to enhance the economic empowerment of individuals and society’.
Motivated by the speed of innovation and transformation globally, the Kingdom sought to accelerate the diversification of its economy. As a result, SAMA, in November 2022, announced the Open Banking Framework – a set of legislation, regulatory guidelines and technical standards to ensure the readiness of banks and fintechs in launching open banking services in the Kingdom. The framework mandated banks to make their account information APIs available by the end of 2022 and the payment initiation APIs by March 2023 in line with local regulatory standards.
Prior to the years of transitioning, Bank Albilad, a leading Islamic Saudi bank, developed and deployed its open banking platform per UK Standards. With the deadlines right around the corner, Bank Albilad’s team were in a race against time to develop and deploy their platform in line with the KSA Standards.
Seeking to safeguard the business from numerous business risks and achieve compliance with speed and precision, the company began to explore API management tools, eventually deciding to employ IBM Cloud Pak® for Integration, specifically the IBM API Connect® function.
Bank Albilad’s preparedness was largely driven by its foresight. The bank identified the API economy and how adeptness in the field allowed faster product turnaround, increased consumer satisfaction and trust, access to newer markets, enhanced collaboration, and many other benefits. “Years ago, we noted the potential of the API economy and we as a leading bank had to start utilizing it to ensure agility for years to come. So back in 2018, when Bank Albilad had that vision, we started looking for an API management platform that would help us create, manage, secure and socialize our API efficiently to the market,” BAB says.
So, when SAMA announced its new guidelines and deadlines for open banking, concerns largely hinged on the bank’s ability to find a suitable and compatible API management solution that would save time, increase efficiency, and speed up time to market. Following a thorough assessment of the API management tool ecosystem, the Bank Albilad team opted for API Connect whose enterprise-level scalability, flexibility, and intuitive features would help consistently create, manage, secure, socialize and monetize its APIs, helping power digital transformation on premises and across clouds.
But there were some key considerations.
“When we started our open banking journey per KSA Standards, we were not sure we would be able to achieve this using API Connect because the framework comprised customer experience guidelines, API specifications, implementation requirements and operational guidelines that we had to attain and adhere to. So we started looking into the market for other alternative products that would complement API Connect to achieve those things,” BAB continued.
Eventually, the Bank Albilad team would reach out to local IBM partners to get assurances on the product’s viability. Thus began Bank Albilad’s rapid journey towards compliance. “The IBM team’s response to our concerns was great. We held multiple sessions with the team where we outlined the many obstacles we were facing and their support was unparalleled. They researched a similar implementation per global standards, found a similar implementation using IBM API Connect and applied it to us. And it worked!” BAB explained.
Following the utilization of API Connect, testing followed. The Bank Albilad team was able to develop an open banking platform that followed set policies, procedures, and basic security best practices in line with the KSA Standards ahead of the deadline. “We held multiple tests to ensure compliance and certification for security, especially. We were impressed with how well the tool helped us to facilitate fast development as a result of its built-in policies, Map policies, and configurations. Its intuitive features helped us to accelerate the delivery from our side, speeding up time to market and helping us meet the deadline using its low-code capabilities.” BAB said.
As financial institutions scrambled to ensure compliance, Bank Albilad’s familiarity with the API economy, enterprise-scale solutions provided by IBM, and unmatched responsiveness and support from the IBM team, placed its nose firmly in front. Through API Connect, Bank Albilad was able to get the required FAPI (Financial-grade API) certification from the OpenID Foundation at the lowest possible cost. Unlike other banks which involve numerous security solutions to fulfil the FAPI requirements, API Connect was the sole solution, helping Bank Albilad streamline its development.
IBM API Connect’s relative ease of use also helped Bank Albilad optimize its APIs at a rapid rate, helping the company achieve a better time to market, ensuring a potential increase in revenue, enhanced customer satisfaction, improved agility and adaptability to market changes, opportunities to test and finetune, and cost savings.
Additionally, Bank Albilad’s speedy certification gave the bank a competitive advantage, enhancing the bank’s brand image, and projecting it as one of the best innovative and agile open banking providers in the market. “The rapid process increased the digital brand of the bank in the market. More importantly, it allowed us to gain the trust of more fintech companies in terms of partnerships.” BAB concluded.
Finally, Bank Albilad’s certification through IBM API Connect takes SAMA’s vision to support innovation in the financial sector and drive financial inclusion a step closer to fruition.
Bank Albilad is a Saudi joint stock company, established by Royal Decree in 1425H (corresponding to 2004) with a corporate capital of SAR 10,000,000,000. It is headquartered in Riyadh, Kingdom of Saudi Arabia, and listed (ALBILAD) on Tadawul, the Saudi Stock Exchange.
The Bank operates over 105 branches across the Kingdom of Saudi Arabia, as well as seven sales centres and over 150 remittance centres operated by our subsidiary Enjaz. The Bank provides Sharia-compliant services to personal, corporate and SME clients, supporting the latter through specialized centres in several cities throughout the Kingdom. Bank Albilad is headquartered in Riyadh, Saudi Arabia.
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