Open banking in Morocco – Open Banking Nigeria

Morocco

Overview

Morocco has been steadily advancing toward digital financial services as part of its broader economic strategy. Ranked among the more developed economies in Africa, the country stands out in terms of economic and infrastructural development in the region. However, cash transactions still dominate the financial landscape, posing a barrier to widespread digital adoption.

Morocco launched the Maroc Digital 2020 initiative to accelerate economic growth through digital transformation.

Current Status of Open Banking

Open banking in Morocco is still in its early stages, with no formal regulatory framework guiding its adoption, yet. While there have been advancements in digital payments and consumer adoption of mobile wallets, as this is the current focus of the country’s regulators, open banking remains largely unregulated. The primary regulatory body which oversees banking operations is the Bank Al-Maghrib (BAM).

Key Drivers and Emerging Technologies

Morocco’s move towards open banking would likely be driven by its need to enhance financial inclusion, digital transformation, and the gradual increase in the use of digital payment methods:

Digital Payment Adoption: As of 2022, many Moroccan consumers began using digital payment methods for online purchases and money transfers. However, cash remains dominant in everyday transactions.
Emerging Technologies: The adoption of mobile wallets has surged due to their user-friendly interfaces and added security features. Additionally, the Buy-Now-Pay-Later (BNPL) model has also gained traction, with Moroccan fintech companies like Chari exploring this payment option to offer credit solutions to consumers.
Financial Inclusion Initiatives: The Moroccan government views digital finance as a means to increase financial inclusion. Although a significant percentage of the population remains unbanked, digital initiatives aim to bridge this gap by making financial services more accessible, particularly in underserved areas.

The Key Stakeholders

While Morocco has made progress in digital finance, regulations specific to open banking are still under development. The existing regulatory framework addresses digital payments, electronic money, and crowdfunding but lacks tailored guidelines for data sharing with third-party providers and API usage, which are the crucial building blocks for open banking.

Bank Al-Maghrib (BAM): As the primary financial regulator, BAM oversees digital payments and mobile banking activities. Although BAM has not yet established specific open banking regulations, its policies are moving towards supporting a more open financial system.
Moroccan Capital Markets Authority (AMMC): The AMMC’s focus is on capital markets, and it collaborates with BAM on broader financial sector regulations. There is an expectation that future regulations will encompass open banking as the financial ecosystem continues to evolve.

Several major Moroccan banks are leading digital initiatives to modernize services and lay the groundwork for open banking:

Attijariwafa Bank (AWB): As one of the largest banks in Morocco, AWB has invested in modernizing its digital operations to improve customer experience and facilitate easier financial transactions.
Banque Centrale Populaire (BCP): BCP is also prioritizing digital transformation, introducing products like BP PayTracker for international transfer tracking and enhancing mobile banking with the Pocket Bank app.

Challenges to Open Banking Adoption

Morocco faces several challenges that could hinder the broader adoption of open banking in the long run:

Consumer Distrust: Despite the rise of mobile and contactless payment methods, many Moroccan consumers remain hesitant about digital financial services, especially concerning cashless payments. This skepticism represents a major barrier to open banking adoption as trust is the foundation on which open banking is built.
Dominance of Cash Transactions: While digital payments have increased, cash is still the dominant form of payment for most Moroccans, and the shift to a cashless society has been slow. 15 million of the country’s population remain unbanked and continue to rely on traditional banks and cash-based transactions, indicating a cultural preference that could delay digital adoption.
Strict KYC Regulations: Existing Know Your Customer (KYC) regulations are stringent and can make it challenging for unbanked individuals to access digital financial services, limiting the reach of open banking initiatives.
Gender Gap in Financial Access: Morocco has one of the highest unbanked rates globally, with a noticeable gender gap. As of 2021, only 33% of Moroccan women held bank accounts compared to 56% of men, presenting a challenge to financial inclusion.

Opportunities for Open Banking in Morocco

Despite the challenges, there are significant opportunities for open banking to transform Morocco’s financial sector:

Growing Consumer Adoption of Digital Payments: According to a study by Visa, cash usage has declined, and the adoption of contactless and e-commerce payments has increased since the pandemic. This shift presents an opportunity for open banking to build on existing digital habits and enhance consumer experiences.
Financial Inclusion Potential: Open banking could help close the financial inclusion gap by enabling fintech companies to provide accessible financial services to underserved populations, especially through mobile platforms and microfinance options.
Innovation and Competition: Open banking would allow fintechs to leverage data to offer personalized financial products, increasing competition and encouraging innovation. With over 84% of Moroccan consumers expressing trust in contactless payments, open banking could capitalize on this trend to offer more seamless and user-friendly financial solutions.

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