Open Finance: The UAE’s opportunity to put customers back at the centre

The UAE has spent the past few years building the foundations of a new financial system. Instant payments through Aani, a domestic card scheme through Jaywan, the Digital Dirham, and now a sovereign financial cloud are not isolated projects. They are parts of a wider effort to make the country’s financial infrastructure faster, safer and more self-reliant.

The next piece of that architecture may prove to be the most consequential: Open Finance.

At first glance, it can sound like a technical subject: APIs, data sharing, third-party providers and digital consent. It is much more than that. Done well, Open Finance could change the relationship between banks and their customers, giving individuals and businesses more control over their financial data, greater visibility over their financial lives, and a wider choice of services.

Done badly, it could become another piece of digital plumbing that customers neither understand nor trust.

That is why the success of Open Finance in the UAE will not be measured by how many banks connect to an API, or how many fintech applications emerge. It will be measured by whether customers feel that financial services have become easier to navigate, safer to use and more responsive to their needs.

The Central Bank’s framework is ambitious. It establishes the legal and operational basis for the secure, consent-based sharing of financial data and the initiation of transactions through accredited providers. It brings together a Trust Framework, a central API Hub and common infrastructure services. The first phase covers banks and insurance companies, with other regulated institutions, including finance companies, payment providers, exchange houses and stored-value providers, within the broader scope of the regulation.

This is a meaningful departure from the old model of banking. Traditionally, a customer’s financial life sat within separate institutions. A salary account might be with one bank, a credit card with another, an investment portfolio with a third provider and insurance with a fourth. The customer could access each relationship digitally, but could rarely see the full picture in one place or move information easily and safely between providers.

Open Finance begins to change that. With explicit customer consent, an authorised provider could help a customer consolidate account information, see cash flows more clearly, initiate payments, compare services or manage financial commitments more effectively. The aim is not to hand over a customer’s data to the market. It is to give the customer a practical means of deciding who may access that data, for what purpose and for how long.

That distinction matters. The phrase “data sharing” can understandably make people uneasy, particularly when it involves bank accounts, spending patterns, credit facilities and insurance policies. Customers do not want to read a page of dense terms and conditions before clicking “accept”. Nor should they be expected to become experts in cybersecurity in order to use a financial product. The principle must be simple: your data, your permission, your control.

The Central Bank’s regulation is clear that data sharing and transaction initiation require the express consent of the user, appropriate authentication and secure communication. Open Finance providers must be licensed or deemed licensed, while the framework places obligations on governance, risk management, compliance, cybersecurity, business continuity and customer-data protection.

Those safeguards are essential, but regulation alone will not create trust. Banks and fintech firms will need to make consent genuinely understandable. Customers should know, in plain language, what data they are sharing, with whom, why it is needed, and how they can withdraw permission. The ability to revoke access should be as easy as granting it.

For banks, this is an important strategic moment. The natural reaction to Open Finance is often defensive: why should an institution make its customer relationships more portable? But this misunderstands where banking competition is heading.

The first era of digital banking was about putting traditional services on a mobile phone. The second was about faster onboarding, payments and self-service. The next era will be about helping customers make better financial decisions across their entire financial lives.

Banks that see Open Finance only as a compliance obligation will do the minimum. Banks that see it as a chance to become more useful will build better propositions around financial wellbeing, cash-flow management, fraud prevention, personalised service and trusted advice.

Open Finance should not become an excuse for intrusive profiling or automated selling. It should make financial services more relevant without making customers feel watched. It should give people more choice, not simply more targeted marketing.

The UAE has rightly moved early to create a regulated Open Finance framework that encourages innovation while setting clear standards for participation. The opportunity now is to translate that framework into everyday value for customers.