Fintech companies to benefit most from SAMA open banking policy

Fintech companies to benefit most from SAMA open banking policy
SAMA said in a statement that the policy would enable bank customers to securely manage their bank accounts and share their data with third parties. (Supplied)
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Updated 12 January 2021

Fintech companies to benefit most from SAMA open banking policy

Fintech companies to benefit most from SAMA open banking policy
  • The policy will also improve trust among all stakeholders in a financial relationship, whether banks or fintech companies

RIYADH: The open banking policy approved by the Saudi Central Bank (SAMA) on Sunday is expected to benefit the Kingdom’s financial technology (fintech) companies due to its advanced and varied services, experts said.

SAMA said in a statement that the policy would enable bank customers to securely manage their bank accounts and share their data with third parties. Customers will also have access to bespoke financial products and services from the same platform and enjoy smoother daily banking activities.

Fadhel Al-Buainain, a former Saudi banker, said that it is a known fact that only the customer and the bank have access to confidential banking information. Following the implementation of the new policy, however, a third party can also have access to such information if the customer grants it permission. In this way, customers will be able to securely manage their bank accounts and share financial data.

“Competition between financial institutions will become fiercer once the policy has been implemented. Institutions will compete over offering innovative financial products to attract more customers. Besides, customers can combine all bank accounts onto a single platform,” noted Al-Buainain, who is a member of the Saudi Financial Association.

Digital services will improve as they constitute a significant part of the strategy for developing the finance sector, he explained, indicating that new financial companies will be able to offer their services to customers, especially in the private sector. The data available to the credit and investment sectors will also be enhanced.

“Fintech companies will benefit the most from the policy because of their desperate need for financial data, which help them make sound financing decisions. This in itself will increase the benefits that the digital sector will reap from the policy at a time when the finance sector needs a lot of digital development to keep pace with digitization,” Al-Buainain pointed out.

The policy will also improve trust among all stakeholders in a financial relationship, whether banks or fintech companies.

Dr. Abdullah Baeshen, a financial advisor, said the banking sector has seen major developments in terms of infrastructure and technology and is monitored closely by SAMA.

“The new open-banking policy will enable customers to use data easily and perform swift financial transactions through their bank accounts — the backbone of any industrial or commercial transaction and even in the stock exchange markets. In only a short amount of time, fintech paved the way for a major industry to emerge and become a center of attraction in stock exchange markets,” explained Baeshen, who is he chairman of Team One Financial Consultants.

The new policy will develop the financial sector and help global banks penetrate the market, he said, noting that piracy, hacking and other electronic crimes continue to pose risks for accounts and might lead customers to be skeptical about a bank’s ability to protect its clients’ personal information.

Abdulla Almoayed, CEO and founder of Tarabut Gateway, the Middle East’s first and largest regulated open banking platform, welcomed the news and told Arab News: “The positive policy steps taken by the Saudi Central Bank (SAMA) support the Kingdom’s visionary plans for enhancing financial technology and infrastructure. Open banking empowers a community of innovation between banks and entrepreneurial start-ups, to improve customer experiences and services. As MENA’s first and largest open banking platform, we are delighted that the Kingdom has taken this strategic approach and look forward to a bright future of collaboration.”


Before Lebanon's current financial crisis, central bank faced a $4.7 billion hole in reserves: IMF memo

Before Lebanon's current financial crisis, central bank faced a $4.7 billion hole in reserves: IMF memo
A member of the Lebanese security forces stands at the entrance of the Central Bank after anti-government protesters broke down a construction barrier. Getty Images
Updated 12 sec ago

Before Lebanon's current financial crisis, central bank faced a $4.7 billion hole in reserves: IMF memo

Before Lebanon's current financial crisis, central bank faced a $4.7 billion hole in reserves: IMF memo
  • One of the deepest depressions in modern history, has propelled 74 percent of the population into poverty

Lebanon's central bank had a $4.7 billion hole in its reserves by the end of 2015 that was not disclosed to the public, an early warning sign of the financial collapse that has since all but wiped out many people's savings.


The figure is contained in an April 2016 report drawn up for Lebanese financial authorities by the International Monetary Fund and seen by Reuters.


The confidential report, known as an aide memoire, said that while the gross reserves of the Banque Du Liban central bank (BdL) were high at $36.5 billion, "reserves net of the commercial banks' claims on BdL and gold were negative USD 4.7 billion in December 2015".


Lebanon's central bank has been headed by Riad Salameh since 1993. In late 2016, it began what it called "financial engineering" - funding a ballooning fiscal deficit and keeping banks buoyant by paying ever higher interest rates for dollars.


By the time investor confidence wore out amid civil protests against the ruling elite in 2019, the central bank's losses had multiplied.


Three people with knowledge of the matter said Salameh himself had insisted to IMF officials that the figure not be published by the IMF on the grounds it would destabilise the financial market.


Asked why the negative net reserves figure was not published in a January 2017 IMF report, a central bank spokesperson, speaking on behalf of Salameh, said "the central bank does not have the power to change IMF reports" and declined to elaborate further on that point.


"The misrepresentation of the causes of the crisis to concentrate (blame) on the BdL is unprofessional and being used to throw responsibility onto one institution, the only civil institution still keeping the (financial) system alive despite the acute crisis," the spokesperson added.


An IMF spokesperson, asked by Reuters why the figure was left out of published reports and whether the Fund should have been more proactive in demanding remedial action, declined to specifically address the omission of the $4.7 billion, but said the report "provided an early warning as well as possible solutions to strengthen the financial system".


"It emphasized the need to reduce economic and financial risks, including the reliance on new deposit inflows to cover large fiscal and external deficits," the spokesperson said. "It also pointed to significant resources that would be needed to ensure banks remained capitalized in the event of a severe shock."


When foreign exchange inflows dried up in 2019, the banks, many of them with leading politicians as shareholders, shut depositors out of their accounts. Withdrawals have since been limited, mostly made in Lebanese pounds which have lost 90 per cent of their value.

By 2020 the central bank deficit had grown to $50 billion with total bank losses to $83 billion, according to a rescue plan prepared by the finance ministry in April that year. Both the central bank and the banking association dispute these figures but have not publicly given alternatives.


A forensic audit of the central bank is a condition for Lebanon to secure an urgent IMF rescue package.

The audit resumed last week after an almost year-long hiatus due to disagreements over access to information.


The crisis, described by the World Bank as one of the deepest depressions in modern history, has propelled 74 percent of the population into poverty, according to the United Nations.


"The social impact, which is already dire, could become catastrophic," the World Bank said in April. Even during Lebanon's 1975-1990 civil war, the banks remained solvent and functional.


Salameh has repeatedly said he was acting only to buy time for Lebanese politicians to agree reforms to cut the budget deficit and that it was not his fault that they failed to do so.


Asked if the IMF had a duty to be more proactive in pushing for the $4.7 billion negative net reserves figure to be published, the IMF spokesperson referred Reuters to the fund's transparency rules.


These say that a country may ask for non-public material to be removed from a report if it is: "Highly market-sensitive material, mainly the Fund's views on the outlook for exchange rates, interest rates, the financial sector, and assessments of sovereign liquidity and solvency."


The IMF spokesman declined to say whether Lebanon specifically made this request and also did not address whether there is a formal limit on the size of net reserves.


Earlier this year, Swiss authorities launched an investigation into "aggravated money laundering in connection with possible embezzlement to the detriment of the Banque du Liban (central bank)".

Salameh has denied any wrongdoing and said the investigation is part of a campaign against him.


Swiss newspaper Le Temps first reported earlier this month that key information had been kept out of the public eye by the central bank in 2015. The central bank had said the report "had nothing to do with the truth".


Sony ekes out 1% Q2 profit rise as PS5 costs squeeze margins

Sony ekes out 1% Q2 profit rise as PS5 costs squeeze margins
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Updated 38 min 54 sec ago

Sony ekes out 1% Q2 profit rise as PS5 costs squeeze margins

Sony ekes out 1% Q2 profit rise as PS5 costs squeeze margins
  • Sony ekes out 1% Q2 profit rise as PS5 costs squeeze margins

Japan's Sony Group Corp on Thursday squeezed out a surprise 1 percent rise in operating profit for its second quarter though costs from growing sales of its PlayStation 5 (PS5) console pressed on margins.


Weaker profitability in the key games segment could also not stop the group hiking its full-year operating forecast by 6 percent to 1 trillion yen ($8.81 billion) from its August forecast, driven by expected profit growth in areas including movies, music and electronics.


Sony said it has sold a cumulative 13.4 million units PS5 units since launch last November. That contributed to a 27 percent year-on-year jump in sales at its gaming unit, though profit was less robust as the conglomerate sold hardware below cost.


Game console makers frequently sell new devices below manufacturing cost as they build an install base for software sales. Sony said sales of first-party titles fell, though sales from other developers grew.


Sony aims to sell 14.8 million PS5 consoles this financial year - a target that takes into account the global semiconductor shortage.


Sony reported group profit of 318.5 billion yen for July-September. That compared with the 222 billion yen average of six analyst estimates compiled by Refinitiv.


The conglomerate - spanning areas such as entertainment, sensors and financial services - switched to IFRS accounting standards from U.S. GAAP in the current financial year.


Sony also said it is considering partnering Taiwan Semiconductor Manufacturing Co Ltd in its plans to build a chip plant in Japan, amid a corporate scramble to secure long-term stable semiconductor supply.


Across its business, Sony is enmeshed in a global battle for consumer attention as entertainment giants look beyond the United States for growth and mine non-English-language creators for content.


In a blow to Sony's pop culture credentials, South Korea's top cultural export, boy band BTS, said last week it has dropped its Columbia Records label for a deal with Universal Music Group NV.


Other challenges include an investor attempt to oust the management of India's Zee Entertainment Enterprises Ltd , casting a shadow over merger talks with Sony's local unit.


Stellantis Q3 sales down 14% as chip crisis cuts output by 600,000

Stellantis Q3 sales down 14% as chip crisis cuts output by 600,000
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Updated 48 min 13 sec ago

Stellantis Q3 sales down 14% as chip crisis cuts output by 600,000

Stellantis Q3 sales down 14% as chip crisis cuts output by 600,000
  • Shipments fell 27 percent year on year on a pro-forma basis in the third quarter to 1.131 million units

Stellantis, the world's fourth largest automaker, on Thursday reported a 14 percent fall in third-quarter revenue on a pro-forma basis after semiconductor shortages cut planned quarterly production by 30 percent or 600,000 vehicles.


Revenue amounted to 32.551 billion euros ($37.8 billion), short of analyst expectations of 33.02 billion euros in a Reuters poll.


"The level of chip shortage was probably slightly higher that what we had expected when we last spoke to the market in August," Chief Financial Officer Richard Palmer said, adding the full-year total toll of lost production would top a previous forecast of 1.4 million units.


Palmer however said the company was seeing a "moderate" improvement in chip supply in October and expected that trend to continue through the fourth quarter.


"Visibility on semiconductors continues to be a difficult subject for the industry," Palmer added.


Shipments fell 27 percent year on year on a pro-forma basis in the third quarter to 1.131 million units.


Lower volumes more than offset an improved vehicle mix and positive net pricing following recent vehicle launches, including new electrified vehicles, the company said.


Palmer said Stellantis forecasts a moderate improvement in shipments in the final quarter of this year.


"We see positive pricing across all regions," the CFO said, adding he saw good progress on post-merger synergies and cost management.


The carmaker, formed at the beginning of this year through the merger of Fiat Chrysler and France's PSA, confirmed its full-year target for an adjusted operating profit margin of around 10 percent.


The forecast, which was raised in August, assumes no further deterioration in semiconductor supply and no further significant lockdowns in Europe or the United States.


Stellantis, however, revised its full-year industry growth outlook for some regions, lowering them for North America, South America and the enlarged Europe area, while improving them for the Middle East and Africa region. It kept them unchanged for India, the Asia Pacific and China.


Gold demand drops 7% annually as ETF outflows gain traction

Gold demand drops 7% annually as ETF outflows gain traction
Updated 28 October 2021

Gold demand drops 7% annually as ETF outflows gain traction

Gold demand drops 7% annually as ETF outflows gain traction
  • Net sales for gold ETF placed overall gold demand into a year-on-year decline, despite demand increasing in all other sectors

Demand for gold drops 7 percent annually in the third quarter of 2021 as outflows from gold-backed exchange-traded funds (gold ETFs), according to the World Gold Council’s latest Gold Demand Trends report. 

Net sales for gold ETF placed overall gold demand into a year-on-year decline, despite demand increasing in all other sectors, the report showed. 

Consumer purchases of gold jewellery increased 300 percent year-on-year to 443 tonnes.

Meanwhile bars and coins, which are famous for retail investors, saw a fifth consecutive quarter of year-on-year gains in the same period.

Gold used in technology grew 9 percent year-on-year, and central banks added 69 tonnes to their reserves. 

“The relatively modest outflows from gold ETFs have had a disproportionate effect on this year’s figures, outweighing positivity almost everywhere else across the board,” Louise Street, senior markets analyst at the World Gold Council said. 

Street expects the demand will be the same for the rest of the year, “strong consumer and central bank will mitigate losses from ETFs.”

“Jewellery demand will continue to exceed last year’s levels, but investment demand in total will be weaker in 2021, despite healthy bar and coin demand,” he added.


AS IT HAPPENED: Future Investment Initiative 2021, Day Three

AS IT HAPPENED: Future Investment Initiative 2021, Day Three
Updated 34 min 53 sec ago

AS IT HAPPENED: Future Investment Initiative 2021, Day Three

AS IT HAPPENED: Future Investment Initiative 2021, Day Three

DUBAI: The Future Investment Initiative holds it final day in Riyadh with discussions ranging from venture capitalism, digital finance, fashion to investments in medical innovations.

The opening plenary will talk about how young companies could thrive with the torrent of venture investment into private markets from non-traditional sources, including hedge funds, sovereign wealth funds and family offices.

Watch the livestream of FII 2021’s third day:

(All times in GMT)

07:24 – Sanford R. Climan, president of Entertainment Media Ventures, Inc.; Ignace Lahoud of Majid Al-Futtaim Holding, and Robert Simonds, CEO and co-chairman of Eros STX Global Corporation meanwhile are on a panel discussion on the future of entertainment in the region, highlighting the growing sophistication of local content and where it sits in international show business.

07:16 – Saudi Aramco’s Al-Khowaiter says “blue hydrogen is ready today to scale.”

07:13 – On carbon capture, Saudi Aramco’s Ahmad Al-Khowaiter says “the question of technology feasibility is not there, the technology is at scale today.”

07:08 – The most optimal production of hydrogen is the combination of blue and green – it’s never going to be one or the other, Aramco’s Ahmad Al-Khowaiter says.

07:04 – Ahmad Al-Khowaiter: “We are looking at $1.5 to $2 a kilogram for low carbon hydrogen, but the biggest challenge is transport, it will take some time to be cost competitive.”

06:45 – A parallel session, which includes Saudi Aramco’s chief technology officer Ahmad Al-Khowaiter, is also being held to explore investing in hydrogen and scaling technology.

06:10 – The scheduled speakers for the opening plenary, John R. Selby, managing director of Thiel Capital; Fadi Ali Ghandour, executive chairman of WAMDA; Ronaldo Mouchawarm, vice president of Amazon MENA; Akash Shah, chief growth officer at The Bank of New York Mellon; Dr. Hani Enaya, the head of private investments at Sanabil Investments, will try to answer how changes are playing out across different markets around the world, and how should founders navigate these new opportunities while continuing to grow and scale.