CBB mulls regulations for Fintech

Manama : The Central Bank of Bahrain (CBB) is considering various options to introduce Fintech regulation, said a key financial expert yesterday. 

Khalid Hamad, Chairman of the Waqf Fund and Executive Director Banking Supervision stressed that the banks also need to understand and embrace the technology. 

“We invite technology companies to set up offices in Bahrain and use it as a base to serve the entire GCC and Middle East region,” said Khalid Hamad.  He was addressing a group of senior CBB officials and participants of Leadership Grooming Programme including Associate Dean of Ivey Business School Dr. Chris Chan. 

Ivey Business School is Canada’s top ranked business school and is ranked one of the best in the world. It has recently established a digital banking lab focusing on thought leadership and research in the space of digital banking and Fintech.

Dr. Chan while shedding light on the increasing activity in the area voiced that Fintech is the future of finance. In support, he pointed out that over 1,000 companies with US$105 billion in funding and US$870bn in market capitalisation are engaged in Fintech activities globally.

“The personal/SME segment, which contributes 46 per cent of global banking profits, is the main centre of attention for disruption by Fintech companies and has attracted 92pc of all funding. 

“Start-up companies are taking market share from large incumbent banks, forcing them to embrace Fintech or see their profits erode. We believe soon banks everywhere will be facing their ‘Uber moment’,” he said.   

Citing a research in this area, Dr Chan said Asia is already ahead of the developed western world in terms of digital banking, thanks to mobile penetration. 

“Digital payments, crowdfunding, Robo-advisory and blockchain are some of the major new trends unleashed by Fintech,” he pointed out. The report also says that investment in private Fintech companies increased ten times in the past five years, with China being the largest peer-to-peer lending market in the world (US$69 billion vs. US at US$17bn).

As per forecast, by 2020, the projected assets under management of robo-advisors in the US will be US$2.2 trillion, up from US$300bn today, Dr. Chan stressed.