Kuwaiti banks ready for technological, digital development

Institute of Banking Studies issues report

KUWAIT CITY, Oct 10: A report issued by the Institute of Banking Studies says the Kuwaiti banks are ready in terms of technological and digital development that banks are expected to face in future, with the presence of 23 domestic and foreign banks operating in Kuwait, but the state does not have a surplus in the number of banks, especially when compared to GCC counterparts, reports Al-Qabas daily.

Among the Gulf Cooperation Countries, (GCC), Bahrain is the most crowded in terms of bank numbers, followed by Qatar and the UAE respectively in terms of the number of bank branches compared to the total population.

However, the number of licensed banks in the country usually indicates greater competitiveness in the market. One of the most important issues in this regard is the size of the country’s banks, the report said. Among the local banks, there are two major banks in Kuwait – National Bank of Kuwait (NBK) and the Kuwait Finance House (KFH) which account for 56% of total banking assets.

The remaining eight banks own 44% of the banks’ total assets. Thus, we find that those who control the Kuwaiti banking sector are two banks, one traditional and the other Islamic.

According to the report, the competitive landscape between banks in Europe and the United States is very different from that of Kuwait and the rest of the GCC.

So far, there are no banks in Kuwait that are active on-line, which only offer their services online, and the Central Bank of Kuwait does not appear to be intending to allow such banks to be established. There are no signs of anything new coming soon. It should be noted that Kuwait has a good banking market, and the rules imposed on foreign banks in the country have been relaxed to some extent, allowing them to open new branches.

The local banking market is undoubtedly affected by the mobile banking services that can be delivered over the phone.

This step came primarily as a result of young people adopting modern technologies. In addition, the Kuwaiti government has supported the modernization of its national economy through the use of the latest technology to enhance e-government services. In recent years, the technology has changed the approach taken by Kuwaitis to complete their banking transactions.

From telephone banking to intangible payments through digital means, technology has reshaped the financial services industry in ways we are used to and banking institutions are increasingly under pressure to adapt quickly to the evolving tastes of their customers.