1. Description
1.1 Current Scope
The https://openfinanceuae.atlassian.net/wiki/x/QomODg functionality included in the Open Finance standard so far, enables TPPs to initiate one or more International (i.e. cross-border) Payments (IPs) with the Users' consent, from the Users' online payment accounts held at the LFI, to a business or a personal beneficiary. The functionality was applicable to domestic debtor accounts of local currency or foreign currency, initiating payments in same or different currency than the debtor’s account, to creditor accounts located cross-border (i.e. located outside of UAE) only. All available currencies supported by LFIs are supported for the Open Finance payment initiation. However, domestic FX payments, involving FX payment conversion at the debtor (initiating) payment account (for example from USD to AED or GBP to AED) before domestic payment initiation were NOT in the scope of the current version of the Open Finance Standard.
1.2 New Proposition Scope
The Enhanced FX proposition is looking to address the gaps of the initial International Payments functionality and extend the scope of the Open Finance https://openfinanceuae.atlassian.net/wiki/spaces/standardsv2draft2/pages/304548559/International+Payments to include services for performing transactions in foreign currencies, utilizing FX rates provided by FX specialist companies, such as FX Houses. More specifically, the proposition will be including the following capabilities:
A. Data Sharing
A1. Data sharing to support Customer information, FX products and transaction data FX Houses, for Consumers and SMEs (TBC).
A2. Extend scope of LFI data sharing to support FX & Remittance products information and FX & Remittance transaction data from LFIs, for Consumers and SMEs.
B. FX & Remittance Services Quotes
B1. Quotation for FX conversion rates and for international remittances and payments charges from FX Houses, with or without existing customer relationship.
B2. Quotation for FX conversion rates and for international remittances and payment charges from LFIs, with existing customer relationship (voluntary).
C. Dynamic Account Opening & Onboarding
C1. Dynamic account opening and onboarding of Users with FX Houses for the purpose of initiating using FX Services such as FX conversion and international remittances.
D. FX Service Initiation Requests
D1. Service requests for the initiation of FX conversion and/or domestic credit transfers and international remittances from accounts in FX Houses for Consumers and SMEs (TBC).
D2. Service requests for initiation of FX payments to domestic accounts using LFIs (voluntary).
The above functionality will enable the participation of FX Houses in the Open Finance program and promote a more competitive market environment where Users can benefit from the best FX deals available.
The account opening/onboarding API will be based on the dataset available from the data sharing functionality and may be subject to additional asynchronous processes by each FX House.
Note:
a. The FX & Remittance Services Quote capability (B2) is optional for LFIs. LFIs are not mandated to implement it, but they are able to do so on a voluntary basis.
b. The Dynamic Account Opening and Onboarding capability is not be applicable to LFIs as part of this proposition. Moreover, it is voluntary for FX Houses.
c. The service initiation of FX payments to domestic accounts capability (D2) is optional for LFIs.
1.3 Customer segments
The scope of the Enhanced FX Proposition related to customer segments is shown below:
Capability | Customer Segments | ||
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Consumer | SME | Corporate | |
A1. Data Sharing (FX Houses) |
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B1. FX & Remittance Services Quotes (FX Houses) |
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B2. FX & Remittance Services Quotes (LFIs) (existing customers) |
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C1. Dynamic Account Opening (FX Houses) |
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D1. Service Requests for FX Services Initiation (FX Houses) |
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Therefore, the Open Finance Users who will benefit from these additional capabilities, include mostly consumers and SME businesses. Corporates are not in the main scope of the proposition at this stage.
2. Market Overview
The following are some market highlights in the relation to the UAE Remittances market for UAE as stated in the Annual Report of the Foreign Exchange and Remittance Group 2022.
2.1 International Remittances in UAE
The United Arab Emirates is the second-largest market for outbound remittances in the world, after the USA. The World Bank revealed that the cost of sending money through Money Transfer Operators (MTOs) is relatively lower compared to banks.Thus, MTOs put less financial burden on migrants, who constitute 88% of the UAE’s total population and account for the majority of its workforce.
Globally, remittances became the major contributor of external financing to developing countries, exceeding foreign direct investment, official development assistance, and portfolio investments. This highlights the significance of remittances in boosting economic growth, especially in developing countries.
2.1.1 UAE Exchange Industry
The remittance and exchange industry in UAE consists of 77 actively-operating exchange companies, licensed by the CBUAE. As of December 2021, the exchange companies sector recorded total assets of nearly AED 11.1 billion, with an increase of 7.3% in its total core income, which primarily consists of:
a) remittance operations
b) foreign currency exchange and,
c) wage payments using Wages Protection System (WPS).
In 2021, exchange companies in the UAE handled AED 147.8 billion in outward remittances. This was more than 5% of the total global outward remittances during that year.
2.1.2 Remittance Costs
As of 2020, there are 8.7 million migrants in the Emirates, constituting 88% of the country’s total population and accounting for the majority of the UAE’s workforce. The country’s status as one of the world’s largest job markets and an ideal destination for migrant workers have led to the continued growth of the exchange and remittance industry in the UAE. The main growth drivers that have made an enormous impact on the remittance industry in the UAE are the country’s low remittance costs, the exponential trade growth, and the increase in labor demand.
One of the targets under United Nation’s 2030 Agenda for Sustainable Development is to decrease the transaction costs of remittances to less than 3% and to send money in every remittance corridor for 5% or less by 2030.
The Remittance Prices Worldwide (RPW) by the World Bank, which monitors the costs of remittances across all geographic regions of the world, revealed that sending money through money transfer operators (MTO) or exchange companies is relatively cheaper compared to banks which remain the most expensive remittance service provider, with an average cost of 11%.
As of Q2 of 2022, the global average cost of sending remittances worth USD 200 through four main remittance service providers (Banks, MTOs, Mobile Operators and Post Offices) is 6.01%. On the other hand, the UAE remains one of the countries in the world that provides the lowest money transfer fees, with an average international remittance cost of 3%.
2.1.3 Industry Trends
As of 2022 , UAE has seen a steady rise of smartphone users reaching 9.8 million. Along this, UAE has also witnessed rapid growth in terms of using mobile payment systems. According to The 2022 Global Digital Shopping Index by PYMNTS and Cybersource, 30.3% of SMB consumers in the UAE are using digital wallets to pay online. In this context, the remittance and exchange companies are looking to capitalize on this significant trend offering mobile payment solutions aside from money transfers, as a part of the sector’s efforts to embrace digital transformation and enhance customer experience.
The New Payments Index 2022 study by Mastercard showed that 55% of respondents affirm that they feel safe when using mobile apps for money transfers. Globally, remittances through mobile channels increased by 48% in 2021, reaching USD 16 billion. As exchange companies strive to compete with new options of sending money by continuously working on the modernization of its services, it is vital to leverage this opportunity by establishing collaborations with fintech companies to create a more advanced infrastructure for money transfers and provide faster and more convenient remittance options for customers.
An evolving strategy considered by the Foreign Exchange and Remittance Group (FERG) is to repurpose exchange companies as service enablement centres for financial institutions, banks and utility providers such as telcos, insurance companies, and the like.
2.2 Regulatory
2.2.1 Key highlights
The following are some regulatory highlights in the relation to the UAE Foreign Exchange arrangements as stated in the IMF Articles of Agreement, Annual Report on Exchange Arrangements and Exchange Restrictions 2022.
Exchange measures imposed for security reasons: In accordance with UNSC Resolutions 1267 (1999) and 1373 (2001) and other related resolutions, accounts of individuals and/or organizations suspected of involvement in terrorism are frozen. Banks must verify the identity of anyone who transfers Dh 3,500 or more or its equivalent in other currencies. Moneychangers must do so for transfers regardless of the amount.
Monetary policy framework - Exchange rate anchor: The exchange rate mechanism is a fixed peg regime with the US dollar as the anchor currency
Foreign exchange market: The bid-ask spread and foreign exchange commissions are determined at banks’ discretion
Spot exchange market: As of May 31, 2022, there were 60 commercial and Islamic banks operating in the UAE (23 domestic, 27 foreign) and 10 wholesale banks. All banks may engage in foreign exchange transactions. In addition, there are 85 foreign exchange bureaus, commonly called exchange companies or moneychangers. These institutions may maintain accounts and engage in foreign exchange transactions with the UAECB and may have nostro accounts abroad with the UAECB approval. There are three types of exchange companies:
(1) Category 1, which may buy and sell only currency notes and traveler’s checks;
(2) Category 2, which may process remittances, buy, and sell currency notes and traveler’s checks; and
(3) in addition to transactions allowed for Category 2, they may also process wage protection systems (WPS) payments.
Please refer to section https://openfinanceuae.atlassian.net/wiki/spaces/Internal/pages/247627777/Open+Finance+Enhanced+FX+Proposition#2.2.2-Exchange-companies-Licenses for more details
Foreign exchange standing facility: The UAECB buys and sells unlimited dollars and dirhams to registered counterparties at the official exchange rate. UAECB also executes purchases and sales of foreign currency against dirhams with the federal government and ministries, local governments, and public institutions.
Interbank market: All licensed banks participate in the interbank market. There are no limits set by the UAECB on bid-ask spreads or commissions of market participants.
Brokerage: Some dealing is conducted via money brokers
Forward exchange market: The UAECB provides a facility for dirham funding against US dollars via swaps with terms of one week and one, two, three, six, nine, and twelve months. The swap facility is provided to all banks in the UAE, whether or not they have a shortfall in their dirham net position. The operations began with the UAECB simultaneous purchase of US dollars against dirhams (spot) and sale of US dollars against dirhams (forward).
Foreign exchange accounts permitted: Resident individuals and institutions may hold accounts with banks in the UAE or abroad in any currency they deem necessary, including domestic currency. Balances may be transferred freely, without requiring permission. Nonresidents are allowed to open foreign exchange accounts. Nonresident individuals and institutions may hold call, savings, and time deposit accounts with banks in the UAE in any currency they deem necessary, including domestic currency. Although balances may be transferred freely, a checkbook cannot be issued.
2.2.2 Exchange companies Licenses
In UAE, exchange companies are regulated by CBUAE and are classified into 3 distinct categories based on the range of services they are authorized to provide. These classifications ensure that each company operates within a defined scope, maintaining the integrity and stability of the financial system.
1. Category A License: Foreign Currency Exchange Only
Scope of Services: Authorized to conduct foreign currency exchange operations exclusively. This includes buying and selling foreign currencies to meet the needs of travelers, businesses, and other clients requiring currency conversion.
Regulatory Reference:: As per the CBUAE Rulebook, a Category A license permits the holder to carry out only foreign currency exchange business.
2. Category B License: Currency Exchange and Remittance Services
Scope of Services:: Licensed entities are Permitted to offer:
Foreign currency exchange services.
Remittance operations, facilitating the transfer of funds both domestically and internationally.
Regulatory Reference: According to the CBUAE Rulebook, a Category B license allows the licensed person to conduct foreign currency exchange and remittance operations.
Category C License: Comprehensive Exchange Services
Scope of Services: Authorized to provide a full suite of services, including:
Foreign currency exchange.
Remittance operations.
Payment of wages and salaries, particularly through the Wage Protection System (WPS), ensuring timely and secure salary disbursements to employees.
Regulatory Reference: The Rulebook CBUAE specifies that a Category C license permits the licensed entity to carry out foreign currency exchange, remittance operations, and payment of wages and salaries
Regulatory Compliance and Oversight
All exchange companies, regardless of their category, must adhere to stringent regulatory standards set by the CBUAE, including:
Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) measures.
Know Your Customer (KYC) protocols to verify the identity of clients.
Regular audits and reporting to ensure transparency and compliance with financial regulations.
These classifications and regulatory frameworks are designed to maintain a secure and efficient financial environment in the UAE, protecting both consumers and the broader economy.
3. Operational Models & Scope
Type | Description | Service Request | Original Currency Account | FX Conversion | New Currency Account | Payment Fulfillment | Scope |
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Model-A1 | Traditional Multi-currency LFI Remittance | TPP | LFI | LFI | N/A | LFI | Version 1.0 |
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Model-B1 | FX House FX conversion & Remittance | TPP | LFI or FX House | FX House | FX House | FX House |
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Model-B2 | FX House FX conversion | TPP | LFI or FX House | FX House | FX House | N/A |
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Model-B3 | FX House FX conversion for LFI account | TPP | LFI or FX House | FX House | LFI | N/A |
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Model-B4 | FX House FX conversion for LFI Remittance | TPP | LFI or FX House | FX House | LFI | LFI |
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4. Customer use cases
4.1 Data sharing from FX Houses (UC-1)
As a User (Consumer or SME Business),
I want to provide my explicit consent to a TPP to retrieve my customer information, FX & Remittances products information and transaction data from my account(s) held with an FX House,
so that I can receive value added services provided by the TPP such as quotation for FX and international remittances, price comparison, FX House new account opening, FX House account switching, etc.
4.2 FX & Remittances Product Data sharing from LFIs (UC-2)
As a User (Consumer or SME Business),
I want to provide my explicit consent to a TPP to retrieve my customer information, FX & Remittances products information and transaction data from my account(s) held with my LFI,
so that I can receive value added services provided by the TPP such as quotation for FX and international remittances, price comparison, FX House new account opening, etc.
4.3 FX & Remittances Quotes from FX Houses (UC-3)
As a User (Consumer or SME Business),
I want to provide a TPP with my FX & Remittance requirements and share this information with one or more FX Houses requesting their Quote(s),
so that I can effortlessly see and compare a number of FX & Remittance quotes from a variety of providers for my FX & Remittance needs.
4.4 FX & Remittances Quotes from FX Houses with automated data (UC-4)
As a User (Consumer or SME Business),
I want to provide a TPP with my FX & Remittance requirements together with my explicit consent to acquire all the necessary customer and FX product information and transaction data from my current LFI or FX House and share this information with one or more one or more FX Houses requesting their Quote(s),
so that I can effortlessly view and compare a number of FX & Remittance quotes from a variety of providers for my FX & Remittance needs.
4.5 Dynamic Account Opening with FX Houses (UC-5)
As a User (Consumer or SME Business),
I want to provide a TPP with all the necessary customer and other related information from my current LFI or FX House and share this information with my selected FX House requesting the opening of a new account,
so that I can easily open a new account with the FX House and be able to use their services for FX & Remittances.
4.6 FX Currency Conversion Service Initiation from FX Houses (UC-6)
As a User (Consumer or SME Business),
I want to provide my consent to a TPP to:
to use my payment account held with an LFI for initiating a Single Instant Payment of a fixed amount, in local currency, to my beneficiary account held at the FX House,
use my payment account held with the FX House for initiating a currency conversion from local currency to the currency of my choice
so that I can pay take advantage of a completive deal on the FX currency conversion.
4.7 Remittance Service Initiation from FX Houses (UC-7)
As a User (Consumer or SME Business),
I want to provide my consent to a TPP to:
to use my payment account held with an LFI for initiating a Single Instant Payment of a fixed amount, in local currency, to my beneficiary account held at the FX House,
use my payment account held with the FX House for initiating a single International Payment (Remittance) of a fixed amount and of different currency to a cross-border beneficiary account owned by a business or an individual,
so that I can pay the relevant beneficiary easily while getting a completive deal on the FX currency conversion and the remittance charges.
5. Proposition requirements
The Open Finance Enhanced FX proposition proposition, at this phase, will need to support the following functionality:
5.1 Data sharing for FX & Remittances Services
5.1.1 Process flow
5.1.2 Requirements
ID | Requirement |
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BNK-FXDS-REQ-1 | The Open Finance Enhanced FX solution(s) MUST allow TPPs to request the sharing of Users' Customer data, FX & Remittance product data and transaction data with the explicit consent of Users. The data MUST be grouped in the appropriate data clusters and use the appropriate permissions. For example:
Note: It is expected that FX Houses will be able to provide the same data as LFIs for the above permissions as currently implemented by LFIs.
Note: These are new permissions to be implemented by
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BNK-FXDS-REQ-2 | The Open Finance Enhanced FX solution(s) MUST support the following FX & Remittance Products of FX Houses, Consumers and SMEs clients (if applicable):
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BNK-DSFX-REQ-4 | The Open Finance Enhanced FX solution(s) MUST enable FX Houses to provide the Users' Customer personal data, FX & Remittance product data, and FX Transaction data in response to TPPs data sharing requests, after receiving authorization from authenticated Users. The data MUST be grouped in the appropriate data clusters. |
BNK-FXDS-REQ-5 | The Open Finance Enhanced FX solution(s) MUST allow Users to inform TPPs which |
BNK-FXDS-REQ-6 | The Open Finance Enhanced FX solution(s) MUST enable a single consent to retrieve the same Customer Personal, FX & Remittance product data and FX Transaction data for multiple accounts, held with a single |
BNK-FXDS-REQ-7 | The Open Finance Enhanced FX solution(s) MUST allow Users to select the data clusters they want to share with TPPs. The data clusters will be part of the Users' explicit consent to data sharing. |
BNK-FXDS-REQ-8 | The Open Finance Enhanced FX solution(s) MUST enable the data sharing consent to include a purpose statement for the data sharing. |
BNK-FXDS-REQ-9 | The Open Finance Enhanced FX solution(s) MUST allow data sharing consents to be either long-lived (up to a maximum consent validity period) or short-lived (lasting 24 hours from the point of authorization or less). For long-lived consents, Users will be able to agree with TPPs the duration of the consent, however, Users will not be able to modify the consent duration at the point of consent. |
BNK-FXDS-REQ-10 | The Open Finance Enhanced FX solution(s) MUST request Users to authenticate with the |
BNK-FXDS-REQ-11 | The Open Finance Enhanced FX solution(s) MUST allow authenticated Users, as part of their consent, to select at the |
BNK-FXDS-REQ-12 | The Open Finance Enhanced FX solution(s) MUST require Users to authorize the consent with the |
BNK-FXDS-REQ-13 | The Open Finance Enhanced FX solution(s) MUST allow TPPs to receive User’s Customer Personal, FX & Remittance product data and FX Transaction data, in accordance with the authorized consent, without any further User involvement. |
BNK-FXDS-REQ-14 | The Open Finance Enhanced FX solution(s) MUST enable only users with credentials to access the accounts held with the |
BNK-FXDS-REQ-15 | The Open Finance Enhanced FX solution(s) MUST allow Users to provide data sharing consents for shared accounts held at the |
BNK-FXDS-REQ-16 | The Open Finance Enhanced FX solution(s) MUST enable Users to revoke a long-lived data sharing consent either via the |
BNK-FXDS-REQ-17 | The Open Finance Enhanced FX solution(s) MUST enable Users to modify a data sharing consent in order to add or remove accounts held with the same |
BNK-FXDS-REQ-18 | The Open Finance Enhanced FX solution(s) MUST enable Users to modify a data sharing consent in order to add or remove data clusters that are shared as part of the consent. Additionally, MUST enable Users to modify the purpose of the data sharing. Consent modifications and only be done at the TPP. Users MUST authenticate and authorize the modifications with their |
BNK-FXDS-REQ-19 | The Open Finance Enhanced FX solution(s) MUST allow Users to renew a long-lived data sharing consent, by creating a new consent which is a copy of the previous one and requiring Users to authenticate and authorize it with their |
BNK-FXDS-REQ-20 | The Open Finance Enhanced FX solution(s) MUST NOT allow Users’ Customer Personal, FX & Remittance product data and FX Transaction data to be stored in the API Hub. |
5.2 Quote Initiation
5.2.1 Process flow
5.2.2 Requirements
ID | Requirement |
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BNK-FXQI-REQ-1 | The Open Finance Enhanced FX solution(s) MUST enable TPPs to acquire User’s identity information such as the Emirates ID or passport number as a prerequisite for getting personalised quotes from LFIs or FX Houses. This may happen during the User onboard process or at a later date, before requesting to get any personalised FX & Remittance quotes. TPPs MUST allow users to provide this either: a) using a data sharing consent with an LFI or FX House holding an account for the Users (as per https://openfinanceuae.atlassian.net/wiki/spaces/Internal/pages/247627777/Open+Finance+Enhanced+FX+Proposition#5.1-Data-sharing-for-FX-%26-Remittances-Services) b) manually In both cases TPPs are NOT required to validate the Users' identity information. The Customer Identification details, MUST include the customer’s:
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BNK-FXQI-REQ-2 | The Open Finance Enhanced FX solution(s) MUST allow Users to provide TPPs with the type of FX & Remittance service (FX conversion, Remittance or both) for which they want to receive quotes. |
BNK-FXQI-REQ-3 | The Open Finance Enhanced FX solution(s) MUST enable Users to select the FX Houses that they want to receive quotes from, based on the type of the FX Service required. If Users do not select, the Open Finance Enhanced FX solution(s) MUST enable TPPs to request and get quotes from ALL the FX Houses onboarded in the Open Finance ecosystem. This is irrespective of the FX Houses with which Users have accounts and contractual relationships with. |
BNK-FXQI-REQ-4 | The Open Finance Enhanced FX solution(s) MUST enable Users to select the LFIs that they want to receive quotes from. Users MUST only select LIFs with which they have an active account. If Users do not select, the Open Finance Enhanced FX solution(s) will not request any quotes from any LFIs onboarded in the Open Finance ecosystem. |
BNK-FXQI-REQ-5 | The Open Finance Enhanced FX solution(s) MUST enable TTPs to offer Users the option to: a) Get personalised quotes from FX Houses (and/or LFIs). Users selecting this option provide explicit consent to TPPs to share their identity information (e.g. Emirates ID) with Fx Houses/LFIs during the quotation process. b) Get non-personalised quotes allow from FX Houses only. Users selecting this option do not allow TPPs to share their identity information (e.g. Emirates ID) with Fx Houses during the quotation process. |
BNK-FXQI-REQ-6 | The Open Finance Enhanced FX solution(s) MUST allow TPPs to initiate the quotation requests to the target FX Houses (and/or LFIs) using the API Hub. TPPs will include in the quote requests all the information required for the FX & Remittance quote generation. The API HUB will be forwarding the quote requests to the FX Houses (and/or LFIs) including the users' provided information required for the generation of the quotes. The FX & Remittance quote initiation request will contain the following information:
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BNK-FXQI-REQ-7 | The Open Finance Enhanced FX solution(s) MUST enable FX Houses (and/or LFIs) to receive the FX & Remittance quote requests and use the Users' provided information to execute their FX & Remittance quotation process in near-real-time. Based on this, FX Houses (and/or LFIs) will be able to calculate the required FX conversion and money transfer charges for the different types of FX & Remittance services and include these in their quote response message. FX Houses (and/or LFIs) may also include any additional conditions, terms or limitations related to the quote, if required and the validity period of the quote. Each quote will have a unique quote id (i.e. reference number) The FX & Remittance quote will contain the following information:
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BNK-FXQI-REQ-8 | The Open Finance Enhanced FX solution(s) MUST enable FX Houses to provide in the quote response personalised or preferential exchange rates and remittance fees, for quotes from existing users already having accounts with the FX Houses. |
BNK-FXQI-REQ-9 | The Open Finance Enhanced FX solution(s) MUST enable FX Houses (and/or LFIs), to respond to the FX & Remittance quote initiation requests by sending with their quotation data in the response messages back to the API Hub. |
BNK-FXQI-REQ-10 | The Open Finance Enhanced FX solution(s) MUST allow the API Hub to forward the FX & Remittance quotation responses back to the initiating TPPs. |
BNK-FXQI-REQ-11 | The Open Finance Enhanced FX solution(s) MUST allow TPPs to display all the FX & Remittance quotation information and options to Users including any additional conditions and terms, and advise Users how to proceed in order to take action on the received quotes. |
BNK-FXQI-REQ-12 | The Open Finance Enhanced FX solution(s) MUST enable TPPs to allow Users to sort or filter the provided quotes based on a number of different preferences such as:
The Open Finance Enhanced FX solution(s) MUST allow TPPS to display the quotes in a neutral way as the default, in the cases Users have not selected any preference of sorting and filtering the generated quotes. |
BNK-FXQI-REQ-13 | The Open Finance Enhanced FX solution(s) MUST allow TPPs to enable Users, who have existing accounts and contractual agreements with the FX Houses selected for their FX quotes, to use a received quote for initiating a service request in response to their quote, as per the requirements defined in https://openfinanceuae.atlassian.net/wiki/spaces/Internal/pages/247627777/Open+Finance+Enhanced+FX+Proposition#5.4-Remittance-Service-Initiation |
BNK-FXQI-REQ-14 | The Open Finance Enhanced FX solution(s) MUST allow TPPs to enable Users, who do not have existing accounts and contractual agreements with the FX House they selected for their FX quotes, to initiate a dynamic account opening service request and to be redirected to the FX Houses, for completing the account opening, as per the requirements stated in https://openfinanceuae.atlassian.net/wiki/spaces/Internal/pages/247627777/Open+Finance+Enhanced+FX+Proposition#5.3-Account-Opening-Service-Initiation. |
BNK-FXQI-REQ-15 | The Open Finance Enhanced FX solution(s) MUST NOT allow Users’ FX & Remittance quote data to be stored in the API Hub. |
5.3 Account Opening Service Initiation
5.3.1 Process flow
5.3.2 Requirements (WIP)
ID | Requirement |
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BNK-FXAC-REQ-1 | The Open Finance Enhanced FX solution(s) MUST enable FX Houses to dynamically open accounts and onboard new users in compliance with the Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) laws and also Know Your Customer (KYC) protocols. |
BNK-FXAC-REQ-2 | The Open Finance Enhanced FX solution(s) MUST enable Users, before the FX account opening, to provide TPPs with the name of one of their existing LFI or FX Houses which can be used to provide User’s Customers personal data required for generating a new FX account open request with their selected FX House. |
BNK-FXAC-REQ-2 | The Open Finance Enhanced FX solution(s) MUST allow Users to provide their explicit consent to the TPP to receive their user Customer personal data for the purpose of FX account opening from their existing LFI or FX House. |
BNK-FXAC-REQ-3 | The Open Finance Enhanced FX solution(s) MUST clearly identify that the purpose of the data sharing consent is for new FX account open service request. Moreover, the consent SHOULD include the the FX House that will receive the users' data for FX account opening purposes. |
BNK-FXAC-REQ-4 | The Open Finance Enhanced FX solution(s) MUST only allow TPPs to use a data sharing consent with the Customer Data related clusters for the purpose of account opening. Moreover, the consent duration for this purpose MUST be short-lived (24 hours period or less) |
BNK-FXAC-REQ-5 | The Open Finance Enhanced FX solution(s) MUST enable the data sharing process for FX account opening purposes to proceed as per the requirements defined in https://openfinanceuae.atlassian.net/wiki/spaces/Internal/pages/247627777/Open+Finance+Enhanced+FX+Proposition#5.1-Data-sharing-for-FX-%26-Remittances-Services. |
BNK-FXAC-REQ-6 | The Open Finance Enhanced FX solution(s) MUST allow TPPs to request from the Users to manually provide the Customer data required in the FX account opening data set which have not been provided by the data sharing activity. Additionally, they MUST enable TPPs to allow Users to modify the data, if they think appropriate (e.g. to correct erroneous data provided). |
BNK-FXAC-REQ-7 | The Open Finance Enhanced FX solution(s) MUST allow TPPs to include in the FX account opening service request, the following additional information about each field of the Users' Customer personal data:
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BNK-FXAC-REQ-8 | The Open Finance Enhanced FX solution(s) MUST allow TPPs to initiate the FX account opening service requests to the selected FX House using the API Hub. TPPs will include in the service requests all the Users' Customer personal data they received using the data sharing functionality, or provided by Users manually. The API HUB will be forwarding the service requests to the FX House together with the users' Customer personal data required for the FX account opening service requests. |
BNK-FXAC-REQ-9 | The Open Finance Enhanced FX solution(s) MUST allow TPPs to include in their FX account opening service requests, the following information: Individual Customers (Personal Accounts) A. Personal Information, including:
B. Identification Documents, including:
C. Proof of Address, including:
D. Financial and Banking Details, including:
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BNK-FXAC-REQ-10 | The Open Finance Enhanced FX solution(s) MUST allow TPPs as part of the FX account opening service requests to register a callback API endpoint (i.e. webhook). This will be used by the FX House to asynchronously notify the API HUB and the TPP that the new User FX account has been opened with the FX House as per the request. FX House MUST also include the relevant information for the new FX account. |
BNK-FXAC-REQ-11 | The Open Finance Enhanced FX solution(s) MUST enable FX Houses to receive the FX account opening service requests and use the provided Users' Customer personal data to execute their FX account opening process in near-real-time (and not-real-time in certain scenarios). |
BNK-FXAC-REQ-12 | The Open Finance Enhanced FX solution(s) MUST enable FX Houses, to respond to the FX account opening service requests by sending with their response messages back to the API Hub. Moreover, the Open Finance Enhanced FX solution(s) MUST allow the API Hub to forward the account opening service request responses back to the initiating TPPs. |
BNK-FXAC-REQ-13 | The Open Finance Enhanced FX solution(s) MUST enable TPPs to redirect the users to the FX House’s web interface or to the FX House’s app if available (download maybe required first). |
BNK-FXAC-REQ-14 | The Open Finance Enhanced FX solution(s) MUST enable FX Houses to present to Users a user registration page (for web) or screen (for app) which will contain the Users' Customer personal data received by the TPP as part of the FX account opening service request. Users MUST review and confirm their details are correct. |
BNK-FXAC-REQ-15 | The Open Finance Enhanced FX solution(s) MUST enable FX Houses to request Users to manually provide any information required for the FX account opening which is missing from the Customer personal data received by the TPP as part of the FX account opening service request. Users MUST review and confirm their details are correct. |
BNK-FXAC-REQ-16 | The Open Finance Enhanced FX solution(s) MUST enable FX Houses to verify the Users' provided contact details including mobile phone number and email address. |
BNK-FXAC-REQ-17 | The Open Finance Enhanced FX solution(s) MUST enable FX Houses to request Users to provide electronic copies of their User identity information such as the Emirates ID or passport. This could be achieved by taking photos of an existing paper document or uploading an electronic version of the document. |
BNK-FXAC-REQ-18 | The Open Finance Enhanced FX solution(s) MUST enable FX Houses to request users to provide biometric details that can be matched against the provided identity documents. The most common biometrics used is facial biometrics using a photo or video for facial recognition and matching against the Emirates ID or passport. |
BNK-FXAC-REQ-19 | The Open Finance Enhanced FX solution(s) MUST enable FX Houses to request Users to provide the following information: A. Financial and Banking Details, including:
B. Compliance & Declaration Forms
|
BNK-FXAC-REQ-20 | The Open Finance Enhanced FX solution(s) MUST enable FX Houses to send an FX Account Open Confirmation notification to the API HUB and the originating TPP using the registered callback API endpoint (i.e. webhook). |
BNK-FXAC-REQ-21 | The Open Finance Enhanced FX solution(s) MUST enable FX Houses to include in the FX Account Open Confirmation, the following information:
|
BNK-FXAC-REQ-22 | The Open Finance Enhanced FX solution(s) MUST enable Users to get confirmation of their new FX account open by both the originating TPP and the account holding FX House. The FX House MUST use the Users verify contact details to inform them about the credentials of accessing the account. |
5.4 FX & Remittance Service Initiation
5.4.1 Process flow
5.4.2 Requirements
ID | Requirement |
|---|---|
BNK-FXSI-REQ-1 | The Open Finance Enhanced FX solution(s) MUST enable TPPs to initiate a “funding” payment from an existing LFI or FX House account to an account with the selected FX House for the FX & Remittance services based on a received quote. This may be either using a SIP as per https://openfinanceuae.atlassian.net/wiki/spaces/standardsv1dot2final/pages/277939953/Single+Instant+Payments or using a long-lived consent as per https://openfinanceuae.atlassian.net/wiki/spaces/standardsv1dot2final/pages/277940444/Multi-Payments. The destination account in this payment will be the User’s account in the FX House (and/or LFI) selected based on the quote. |
BNK-FXSI-REQ-2 | The Open Finance Enhanced FX solution(s) MUST allow TPPs to acquire User’s explicit consent for the initiation of the FX & Remittance services with the FX House (and/or LFI) selected based on the quote. TPPs MUST display the full details of the FX & Remittance services details, as defined in the quote, before asking for explicit consent. The quote validity period must be clearly highlighted to the User. The consent MUST include the unique quote id (i.e reference number). |
BNK-FXSI-REQ-3 | The Open Finance Enhanced FX solution(s) MUST only allow TPPs to request consent for a single-use FX & Remittance service initiation consent, in direct relation to a quote. The consent MUST state as the source account the User’s account at the FX House (and/or LFI) used as the destination account of the “funding” payment described in https://openfinanceuae.atlassian.net/wiki/spaces/Internal/pages/247627777/Open+Finance+Enhanced+FX+Proposition#BNK-FXSI-REQ-1 |
BNK-FXSI-REQ-4 | The Open Finance Enhanced FX solution(s) MUST only allow TPPs to request consent for long-lived International Payments (with or without FX conversion) when this is not in direct relation to a quote. This is similar capability as currently supported by LFIs. |
BNK-FXSI-REQ-5 | The Open Finance Enhanced FX solution(s) MUST allow TPPs to stage the FX & Remittance service initiation consent with the API HUB. |
BNK-FXSI-REQ-6 | The Open Finance Enhanced FX solution(s) MUST enable the API HUB to provide the staged FX & Remittance consent details to the FX House (or LFI). |
BNK-FXSI-REQ-7 | The Open Finance Enhanced FX solution(s) MUST request Users to authenticate with the FX Houses (or LFIs) using MFA. |
BNK-FXSI-REQ-8 | The Open Finance Enhanced FX solution(s) MUST enable only users with credentials to access the accounts held with the FX Houses (or LFIs) to be allowed to provide consent to TPPs for the FX & Remittance services initiation. |
BNK-FXSI-REQ-8 | The Open Finance Enhanced FX solution(s) MUST request FX Houses to display to Users the full details of the FX & Remittance services consent. Users MUST review and authorize the consent before the FX & Remittance service initiation can take place. |
BNK-FXSI-REQ-9 | The Open Finance Enhanced FX solution(s) MUST enable FX Houses (or LFIs) to confirm to the API HUB that the consent has been authorized by all required authorizing Users. |
BNK-FXSI-REQ-10 | The Open Finance Enhanced FX solution(s) MUST allow the API HUB to confirm to the TPPs the consent has been authorized by all required authorizing Users. |
BNK-FXSI-REQ-11 | The Open Finance Enhanced FX solution(s) MUST allow TPPs to initiate the quoted FX & Remittance services in accordance with the authorized consent, without any further User involvement. |
BNK-FXSI-REQ-12 | The Open Finance Enhanced FX solution(s) MUST allow the FX Houses (or LFIs) to update the status of the initiated FX & Remittance services resources based on their progress to completion. |
BNK-FXSI-REQ-13 | The Open Finance Enhanced FX solution(s) MUST allow TPPs to check the status of the initiated FX & Remittance services for any updates and changes in their progress to completion. |
BNK-FXSI-REQ-14 | The Open Finance Enhanced FX solution(s) MUST request TPPs to provide confirmation of initiation to Users and updates in relation to their progress towards completion. |
BNK-FXSI-REQ-15 | The Open Finance Enhanced FX solution(s) MUST enable Users to revoke a long-lived International Payments (with or without FX conversion) consent either via the FX Houses' (or LFIs') dashboards or via the TPPs' dashboards. |
BNK-FXSI-REQ-16 | The Open Finance Enhanced FX solution(s) MUST enable Users to modify some of the parameters of a long-lived International Payments (with or without FX conversion) consent. Consent modification can only be done at the TPP requiring Users to authenticate and authorize it with their FX Houses (or LFIs). |
BNK-FXSI-REQ-17 | The Open Finance Enhanced FX solution(s) MUST allow Users to renew a long-lived International Payments (with or without FX conversion) consent, by creating a new consent which is a copy of the previous one and requiring Users to authenticate and authorize it with their FX Houses (or LFIs). Consent modification for renewal of consent duration can only be done at the TPP. |
BNK-FXSI-REQ-18 | The Open Finance Enhanced FX solution(s) MUST NOT allow Users’ FX & Remittance service initiation data to be stored in the API Hub. |
8. Considerations
8.1 Constraints
FX Houses must only allow data sharing or FX & Remittance services initiation after authenticating Users using multi-factor authentication (MFA), as the Strong Customer Authentication Guidelines.
The API Hub does not have the capability of broadcasting a single API message to multiple recipients. Therefore, TPPs must generate multiple FX & Remittance quote API requests, one for each FX House (or LFI) that is required to generate a quote based on the Users' preferences. The quote request API messages sent to each FX House (or LFI) will be the same for all insurrer FX Houses (or LFIs).
FX houses are regulated by the Central Bank of the UAE (CBUAE), which defines their scope of operations. Their licenses typically do not permit trading in speculative or derivative financial products like futures contracts. Futures contracts fall under the jurisdiction of the Securities and Commodities Authority (SCA), which oversees brokers and financial institutions that provide derivative trading. FX Houses are designed to provide straightforward, practical financial services, such as currency exchange and remittances. Offering futures contracts requires specialized infrastructure, trading platforms, and expertise, which are outside their operational focus. The typical customers of FX Houses, consumers and SMEs, are more likely to need currency conversion or cross-border payments rather than complex trading instruments.
8.2 Dependencies
The FX Houses are able to provide real-time quotations of FX & Remittance services based a specific data provided to them by TPPs.
The FX Houses are able to lock a specific FX conversion rate as part of the quote, for a period of time long enough to allow TPPs to initiate the FX & Remittance services based on the values defined in the quote.
The connectivity between TPPs and FX Houses, for the Open Finance Enhanced FX functionality in scope will be taking place via the API Hub.
The ability for fast online account opening and onboarding of new users by FX Houses, partially depends on the quality of the data provided by the User and/or their existing FX House or LFI.
The FX Houses are able to support digital online account opening and onboarding based on the data provided to the them by TPPs and/or the Users in automated process and within certain timelines that may need to be defined by the Open Finance Standard.
8.3 Assumptions
It is expected that FX Houses will be able to provide the same data as LFIs for the Customer data and Transactions permissions as currently implemented by LFIs.
For data sharing functionality, FX Houses are subject to the same data retention period as required by LFIs.
For data sharing functionality, the maximum consent validity period will be 12 months in alignment with the Banking LFIs.
For quotation functionality, it is assumed that all FX Houses will require the same data set for providing an FX & Remittance quote, subject to the service requested.
For data opening functionality, it is assumed that all FX Houses will require the same data set for proceeding with the the dynamic account opening and onboarding. This set will be the superset of all the data requirements identified in the FX Houses market.
The API Hub will not be storing any users' Customer personal data or users' quotation data, instead data will only be transferred by the sharing insurer FX Houses (or LFIs) to the TPPs.
The FX Houses will be able to use the Centralized Authentication and Authorization process offered by the Open Finance Platform, as defined in Centralized Authentication and Authorization.
The FX Houses will be responding with quotes to all requests for FX & Remittance quotes, subject to supporting the services in their own channels (e.g. specific currency pairs or inability to perform certain money transfers).
9. Appendix
9.1 Functionality
The scope of the FX & Remittance Quote Initiation service from the functionality perspective is shown below:
FX & Remittance Quote Functionality (Initial Scope) | |||
|---|---|---|---|
# | Functionality | Description | In Scope (Y/N) |
Create FX & Remittance Quote |
|
| |
Request User’s FX & Remittance Product Data from FX Houses and/or LFIs |
|
| |
Retrieve FX & Remittance Quote |
|
Not required. TPPs can store the FX & Remittance Quotes as their validity period is usually short. | |
Remove/delete FX & Remittance Quote |
|
Not required. FX Houses (or LFIs) can delete the quotes when they expire as their validity period is usually short. | |
Update FX & Remittance Quote |
|
Not required. FX Houses (or LFIs) can generate new quotes if required. | |
Approve/Reject FX & Remittance Quote |
|
| |