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In the first instalment of an exclusive interview with Vixio, Jan Pilbauer, chief executive at Al Etihad Payments (UAE), spoke about the national payments entity’s work on open banking and open finance adoption in the country.
Created in 2023 as a subsidiary of the Central Bank of the United Arab Emirates (CBUAE), Al Etihad Payments has transformed the country's digital payment landscape and now serves more than 150 licensed financial institutions.
It processes more than 200m payments annually, and offers three payment systems to the UAE's financial services industry.
Al Etihad is now advancing into the implementation phase of open finance and preparing for a sandbox project, Pilbauer told Vixio.
“Beyond open banking, our focus is on creating a broad, easily adoptable ecosystem,” he said. “Learning from the experiences of the EU, UK and Brazil, we're mindful of the need to learn from their successes and failures."
Devising an effective model
In April, the company partnered with artificial intelligence (AI) enablement provider Core42 to implement open finance in the UAE.
Pilbauer emphasised that creating a commercial model that incentivises participation and benefits all stakeholders, especially consumers, is crucial for progress in open finance and open banking.
“Our aim is to empower consumers by enabling them to leverage their data for better financial services,” he said. “This involves ensuring data can be shared with multiple providers."
Al Etihad Payments’ work delivers on the CBUAE’s Financial Infrastructure Transformation (FIT) Programme.
Launched in 2023, this initiative was intended to accelerate the digital transformation of the financial services sector. It aims to bolster the sector, promote digital transactions and position the UAE as a leading financial and digital payment hub.
Reasons for buy-in
Regulation alone does not ensure widespread open banking adoption, as the experiences of the UK and the EU show.
Despite regulatory support such as the EU’s revised Payment Services Directive (PSD2) and the UK’s Competition and Markets Authority (CMA) order on major retail banks, adoption remains challenging in these jurisdictions. Consumers and the market both need a reason to buy in.
"Identifying a killer use case is paramount for driving widespread adoption,” said Pilbauer.
Pilbauer, who previously worked on modernisation at Payments Canada, explained that whether it is through embedded payments for seamless transactions or innovative approaches to car insurance renewal, the payments provider is “open to surprises”.
“Success depends on getting the commercial model right, fostering innovation, and delivering tangible benefits to everyone involved,” he said.
Delivering financial inclusion
Another area of the FIT programme that is crucial for the UAE to get right is financial inclusion, which Al Etihad Payments is also working on delivering.
“Financial inclusion is a major public policy objective for the UAE. Our payments systems are designed with inclusivity as the guiding principle,” Pilbauer said.
He explained that by enabling all licensed financial institutions to offer services to broad segments of their customers, the public-private entity is helping to strengthen financial inclusion of those who currently still rely on cash.
“But we are not done yet — payments are a network system and we only harvest all the benefits when we achieve full adoption across the ecosystem,” he said.
“It is powerful for the team to know that we improve people’s lives by driving digital financial inclusion.”
In our next interview with Jan Pilbauer, Vixio will be looking at the UAE’s instant payments platform, Aani, and how it is being used to spearhead digital payments and a cashless society.
