Bahrain is regional leader in digital financial progression: CBB Governor

TDT | Manama

The Daily Tribune – www.newsofbahrain.com

Staff Reporter

The banking market is undergoing a revolutionary change and shortly banks will have competition from not only financial institutions but also from tech companies, opined a fintech expert yesterday.

Speaking at the seminar organised by the Central Bank of Bahrain, IFID and Bahrain Islamic Bank (BisB) marking the Third Annual Islamic Finance Innovation Day, Anouar Adham, CFA, Co-Founder and CEO of CrowdToLive, said all technological firms will soon emerge as potential competitors for banks.

“Banks and financial institutions have to widen their horizons to stay relevant in the competition.

If Apple or any other smartphone makers or operation platforms come with a smart financial product or app, people would subscribe to the product, and we can see that it is creating direct competition with the players occupying the financial sphere,” he said.

Mr Anouar highlighted that it is the power of the ecosystem that determines the value of products and companies, be it financial or non-financial.

“This explains why Tesla’s market capitalisation is four times that of Toyota, which is the world’s largest seller of automobiles.

Innovation and trust are the real two factors deciding the future growth of any company.” Earlier in his inaugural address, CBB Governor Rasheed Al Maraj said the Kingdom has already emerged as the regional leader in digital financial progression.

BisB Chief Executive Officer Hassan Jarrar said digital innovation is the need of the hour for Islamic banks.

“Innovation is different from the invention as the former is all about bringing in new ideas that add value to the existing one. Innovation is a must in the financial sector as customer or user experience goes along with shifts in demographics and customer behaviour.

“The culture has to be brought into a paradigm shift where everyone does innovation. Without innovation, Islamic banks will have a hard time delivering goals,” he added.

Yasmeen Al Sharaf, Director of Fintech and Innovation Unit at CBB, said the Kingdom is a leader in the financial digital revolution.

“The Kingdom hosts close to 400 financial institutions and the digital revolution is very much part of the economic recovery drive. It is exciting as well as equally challenging to be a regulator.”

Maisaa Shunnar, BisB Group Chief Digital Transformation, said reinventing self and renewing promises are key for banks and financial institutions in the contemporary scenario.

“If you see funding to SMEs, 16 per cent of it are from non-banking organisations.

We have to renew our promises to customers to simplify the money equations.” Yasmeen Al Saffar, Head of Financial Services, Bahrain Economic Development Board, said Bahrain has been one of the pioneers in embracing the fintech culture since its beginnings in 2014. “EDB has always been playing the role of an enabler in embracing the fintech culture and innovations.”

Roberto Mancone, CEO and Executive Board Member, BEYON Money, said fintech is a cultural setting. “Regulatory frameworks are important in the functioning and progression of the fintech industry.”

Mohamed Toorani, Partner and Head of Bahrain office, DLA Piper, emphasised the significance of embedded finance defining the future of the fintech industry.

Embedded finance is when non-financial companies offer their customers access to credit through their technology platform.

The customers can be individuals or businesses, and the credit can be offered by the company or by a third party.

Entrepreneur and subject matter expert Ashar Nazim said the future of fintech lies in bridging the financial economy and digital economy.

“Islamic finance industry must embrace tech change and forming core teams is vital for all fintech organisations in tackling the challenges from time to time.”