FinTech an ‘es­sen­tial’ global fi­nan­cial tool: lo­cal bankers

Mod­ern tech used to pro­vide in­no­va­tive fi­nan­cial ser­vices, so­lu­tions

Arab Times - - LO­CAL - By Fawaz Karami

KUWAIT CITY, Oct 13, (KUNA): The lat­est mat­ing of mod­ern tech­nol­ogy and the fi­nan­cial sec­tor has re­sulted in the in­creas­ing num­ber of tech­no­log­i­cal-based ser­vices cur­rently com­pet­ing with tra­di­tional in­sti­tutes such as banks and other bod­ies.

The num­ber of com­pa­nies and fi­nan­cial ser­vices has grown steadily fol­low­ing the global fi­nan­cial cri­sis in 2008. This de­vel­op­ment had led to the in­tro­duc­tion of in­no­va­tive so­lu­tions such as “FinTech”, an amal­gam of fi­nanc­ing and tech­nol­ogy.

FinTech in­cludes the use of mod­ern tech­nol­ogy to pro­vide in­no­va­tive fi­nan­cial ser­vices and so­lu­tions sim­i­lar to tra­di­tional out­fits like banks and in­sur­ance com­pa­nies.

Last Septem­ber, Kuwait has taken a new step in this area af­ter the Cen­tral Bank of Kuwait (CBK) an­nounced the es­tab­lish­ment of the elec­tronic pay­ment in­struc­tion memo, a step which came to ful­fill the law 20/2014.

The law de­fined the re­spon­si­bil­ity of elec­tronic-based com­pa­nies and their work in Kuwait as well as the le­gal and reg­u­la­tory frame­work for the start of this in­dus­try to trans­form the coun­try into a global fi­nan­cial and eco­nomic cen­ter.

CBK in­struc­tions set a prac­ti­cal scope and mech­a­nisms of con­trol and su­per­vi­sion for elec­tronic pay­ment com­pa­nies, which were di­vided into two parts: the first in­cludes the op­er­a­tors of the ac­tiv­ity “elec­tronic pay­ment” and “agents” such FinTech com­pa­nies.

In this con­text, bankers stressed that the de­vel­op­ment of in­fras­truc­ture and leg­is­la­tion of the FinTech in­dus­try was es­sen­tial to keep up with the global fi­nanc­ing in­dus­try.

Prepa­ra­tion

In sep­a­rate in­ter­views with KUNA, the bankers said that Kuwait has be­gan prepa­ra­tion of cadres and op­er­a­tional struc­tures of FinTech com­pa­nies un­der the su­per­vi­sion and mon­i­tor­ing of the state.

For his part, the Ex­ec­u­tive Di­rec­tor of In­for­ma­tion Tech­nol­ogy and Bank­ing Sec­tor at CBK, An­war Al-Ghaith told KUNA that FinTech com­pa­nies were regis­tered with the cen­tral bank as agents be­cause they did not have the tech­no­log­i­cal in­fras­truc­ture and will use the tra­di­tional meth­ods uti­lized by lo­cal banks, tele­com com­pa­nies, and other ser­vices.

CBK’s last elec­tronic pay­ment in­struc­tions is­sued by the end of last Septem­ber de­fined the ac­tiv­ity of “op­er­a­tors” as any fi­nan­cial in­sti­tu­tion clas­si­fied as a joint stock com­pany that has been regis­tered with the cen­tral bank to do all or a few as­pects of elec­tronic pay­ment, set­tle­ment sys­tems, or any other busi­nesses, he added.

Mean­while, Vice-Chair­man and Chief Ex­ec­u­tive Of­fi­cer of Boubyan Bank, Adel Al-Ma­jed said that spe­cial­ized stud­ies in­di­cated

that one out of three peo­ple use smart phones in elec­tronic pay­ment meth­ods in 2007 com­pared to one out of seven in 2015.

Al-Ma­jed pointed out that the elec­tronic pay­ments world­wide reached $450 bil­lion last year and he ex­pected that the num­ber will reach USD one tril­lion next year.

Al-Ma­jed said that the sec­tor was still in need of the hu­man el­e­ment no mat­ter how tech­nol­ogy de­vel­ops.

Act­ing Di­rec­tor of Train­ing at the In­sti­tute of Bank­ing Stud­ies, Des­mond Nel­son, said that the in­sti­tute was ca­pa­ble of keep­ing abreast of all cur­rent de­vel­op­ments in the fi­nan­cial sec­tor and was pre­pared to train new grad­u­ates

on any de­vel­op­ments in this field.

Nel­son pointed out that there was a rev­o­lu­tion af­fect­ing the in­dus­try in dif­fer­ent coun­tries as a re­sult of FinTech, stress­ing that Kuwaiti youth were ca­pa­ble of utiliz­ing this tech­nol­ogy for the ben­e­fit of their coun­try.

KUNA photo

Min­is­ter of Fi­nance Dr Nayef Al-Ha­jraf and the Kuwaiti del­e­ga­tion dur­ing their par­tic­i­pa­tion in the an­nualmeet­ings of the IMF and the World Bank.

An­war Al-Ghaith

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