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Jordan’s Banking Sector Takes a Leap Forward with Open Banking Regulations

Amman, Jordan - The Central Bank of Jordan (CBJ) has taken a significant step towards digitalizing the country’s banking sector by releasing guidelines for Open Finance services. These new regulations aim to facilitate collaboration between financial institutions and Third Party Providers (TPPs), promoting data sharing and innovation in the industry.

A Vision for Financial Technology and Innovation

The CBJ’s vision for financial technology and innovation is part of Jordan’s broader strategy to become a regional fintech hub. With its robust technological infrastructure and focus on financial literacy, the country is poised to reap the benefits of Open Banking and Open Finance.

Growth Expectations in the Arab Region

According to experts, the Arab region is expected to experience a 25% annual growth in Open Banking over the next five years, driven by factors such as the COVID-19 pandemic and a youthful, digital-native population. Open Finance is also expected to play a crucial role in promoting financial inclusion, with projections indicating nearly double the growth by 2027.

Jordan’s Approach to Open Finance

Jordan’s Open Finance regulation is based on the UK Open Banking Standard, ensuring compatibility with other Arab countries’ developments. The CBJ has established a committee to draft instructions for Open Banking services, exploring best practices from around the world and finalizing the guidelines after feedback from banks and payment service providers.

Challenges Ahead

While there are challenges to overcome, including aligning instructions with data protection and privacy regulations and defining unified API standards, the CBJ is committed to addressing these issues through workshops and training sessions.

Industry Expectations

Industry experts believe that Open Banking and Open Finance will transform Jordan’s financial industry, empowering customers, driving innovation, and improving the overall customer experience. With the CBJ’s regulations leading the way, Jordan is set to become one of the leaders in the Open Banking and Open Finance space.

Conclusion

At a time when digital transformation is reshaping the global financial landscape, Jordan’s banking sector is poised to take a significant leap forward with its Open Banking and Open Finance regulations. As the country continues to innovate and adapt to changing market conditions, it is likely to emerge as a regional fintech hub, offering personalized solutions and promoting financial inclusion for all.