‘En­sur­ing fi­nan­cial sta­bil­ity es­sen­tial in tur­bu­lent times’

Kuwait Times - - LOCAL - ABU DHABI:

Gov­er­nor of the Cen­tral Bank of Kuwait (CBK) Dr Mo­ham­mad Al-Hashel stressed yes­ter­day the im­por­tance of en­sur­ing fi­nan­cial sta­bil­ity in tur­bu­lent times. Main­tain­ing sta­bil­ity in money world is at­tained through shed­ding light on two ef­fec­tive fac­tors; the tech-driven revo­lu­tion, which has brought its own set of risks and re­wards, and the wide range of mea­sures that have been in­tro­duced to strengthen the re­silience of the bank­ing sys­tems, Hashel said.

He made his re­marks in his speech at the 12th High Level Meet­ing for the Mid­dle East and North Africa re­gion on lat­est up­dates on bank­ing su­per­vi­sion, fi­nan­cial sta­bil­ity in­sti­tute, and the Arab mon­e­tary fund, which kicked off ear­lier in the Emi­rati cap­i­tal.

“Tech-driven in­no­va­tions have un­leashed dras­tic changes in the way we con­duct busi­ness, in­ter­act with each other, or con­sume var­i­ous prod­ucts and ser­vices,” Hashel said, adding that fi­nan­cial sec­tor is ex­pe­ri­enc­ing a ma­jor trans­for­ma­tion, fu­eled by ad­vances in tech­nol­ogy.

“Tech­nol­ogy is sup­port­ing the outreach of for­mal fi­nan­cial ser­vices to the mil­lions of oth­er­wise un­banked cus­tomers. Ac­cord­ing to World Bank, the poor­est 20 per­cent of the world pop­u­la­tion is more likely to have ac­cess to a mo­bile phone than to clean wa­ter and san­i­ta­tion,” he said.

Hashel also noted that a num­ber of coun­tries have man­aged to swiftly ex­pand ac­cess to fi­nance in re­cent years, adding that the num­ber of adults in the world who were pre­vi­ously out of for­mal fi­nan­cial sys­tem has dropped by 20 per­cent dur­ing 2011-14 alone. “As these en­cour­ag­ing trends sug­gest, dig­i­tal­iza­tion to the mil­lions of peo­ple have re­mained fi­nan­cially ex­cluded so far,” he said.

Hashel also noted that pro­gram­ing break­throughs such as “blockchain” are po­ten­tially trans­form­ing the way the world ver­ify trans­ac­tions and en­force con­tracts, adding that that by al­low­ing par­ties to trans­act with­out cen­tral in­ter­me­di­aries, blockchain can strip off costs, re­duce in­ef­fi­cien­cies, and en­hance cus­tomer ser­vice.

“Host of other in­no­va­tions are re­shap­ing the way we trans­fer money or ob­tain credit. For in­stance, mo­bile wal­lets are en­abling pay­ments by smart phones, peer-to-peer lend­ing is pro­vid­ing new sources of fi­nanc­ing, and robo-ad­vi­sors are of­fer­ing fi­nan­cial ad­vice,” he said. —KUNA

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