Central Bank of Kuwait Supports Launch of New Open Banking Product

Central Bank of Kuwait tests its first product for open banking within its regulatory sandbox.

The Central Bank of Kuwait (CBK) is keen to enable new fintech, support open banking and enable innovative business models in the financial services sector with a first-of-its-kind product I gave the green light to test. Its evaluation in the local market within the regulatory sandbox and its application to the banking of volunteer customers to fully evaluate and evaluate the product before its final launch in the market.

Regarding the new product, Mr. CBK Governor, Basel Al Haroon, said CBK spares no effort to support advanced fintech, adding that the new open banking product first to market within the regulatory sandbox is the first in Kuwait state. The product operates within an open banking model, providing users with analytical services for transactions processed on bank accounts of various banks, as well as electronic payment services.

Central Bank of Kuwait Focuses on Fintech

Al-Haroon highlights the importance of fintech to CBK, which can be defined as new technology relevant to the financial industry, to improve financial activities, including the launch of advanced products, services and business models in the financial services industry. I am aiming. To this end, CBK launched a regulatory sandbox in 2018 and updated it in 2019 to broaden the range of acceptable products and services. A regulatory sandbox is a safe place to allow experimentation of innovative products and services related to fintech without jeopardizing the stability of the financial and banking system.

Regarding CBK’s other efforts to support and regulate open banking, the governor said CBK experts had conducted extensive research and identified the need for an open banking regulatory framework and application programming interface (API) specification. I pointed out that I concluded that To this end, the CBK has formed an ‘Open Banking Working Group’ which includes Kuwaiti banking experts. CBK has also formed the ‘CBK Open Banking Working Group’, composed of CBK specialists and Kuwaiti bank representatives.

Finally, the Governor commended the cooperation of Kuwaiti banks in supporting the development of open banking, highlighting CBK’s role as a motivator and enthusiasm for adopting the latest technologies to enhance the country’s banking and financial services. did.

Fintech in Kuwait and the wider digital ecosystem

The Economic Development Strategy has been implemented in most of the Middle East and Africa (MEA), including Kuwait. Kuwait Vision 2035 aims to diversify Kuwait’s economy and help the country become less dependent on oil. This has boosted the country’s economic development and other Gulf Cooperation Council (GCC) neighbors for most of the last century to the present day.

according to foot suiteIn terms of the percentage of the population over the age of 15, nearly 80% have an account at a financial institution, nearly a quarter have a credit card, and more than a third shop online or pay bills online. I am paying. Kuwaitis, like the rest of the world at the height of the 2020 pandemic, went digital and saw a dramatic increase in activity there. For example, online banking usage was 84% for him during the pandemic. And when asked about their readiness for digital transformation, 80% of those in Kuwait said they feel their government and telecom operators are ready to go online. service.

Kuwait has historically been a regional hub for the financial services industry in the Middle East, especially in the Gulf region, as highlighted in The Fintech Times Fintech: Middle East and Africa 2021 Report. Today, Kuwait’s financial system still consists of her four sectors: banking, insurance, other financial institutions and investment funds. The country had over 100 financial institutions offering financial products and services. Kuwait’s banking business is dominated by retail business with personal loans/credits accounting for 40% of total facilities.

Kuwait has also produced some of the region’s most iconic technology companies, including delivery app Talabat and e-commerce platform Boutiqaat.

The region’s historic financial services ecosystem, combined with the country’s high level of economic development and support from the top, coupled with a young and tech-savvy population, means fintech has the potential to grow in Kuwait.

Kuwait’s future will grow with sectors such as digital transformation and fintech driving its development.