How open banking can help advance Islamic finance

Banks are regulated businesses, designed to function as conservative institutions. But in today’s tech-driven world, where the consumer values agility and convenience, siloed operations could impact an organization’s consumer pool, and ultimately its bottom line. Regulators cognisant of the shifting sands of the world’s financial landscape are accelerating innovations such as open banking to create a more interconnected environment. 

Open banking enables third-party providers to access customers’ financial data from traditional banks through application programming interfaces (APIs) in a secure format. Data can be shared with authorized parties such as fintechs, digital platforms and other banks. 

The new model introduces an open framework that looks to transform the financial services landscape, offering a string of cost-effective and innovative financial products. A Juniper Research study suggests open banking payments transaction value will grow from $57 billion in 2023 to more than $300 billion globally by 2027.