Banking is about trust. I often think back to the global financial crash in 2008. Not simply in terms of the shock to the markets, a big rise in national debt, and an estimated lost growth of over $10 trillion (between 15-20% of global GDP in 2008), but the long-term impacts to the banking industry, our clients and our societies.
Trust in the banking sector has worsened over time. Rather than complain about the challenges, we must imagine our future, and innovate. In the Middle East, Bahrain is well placed to achieve this with fintech.
The Central Bank of Bahrain has championed open banking as well as promoting a cashless economy through digital wallets. Working together, we want to support those who may have been left behind. Strategically it makes sense to build sustainable economic development. And commercially, it is smart too, as it will increase revenue potential in our emerging markets. Bahrain’s existing fintech ecosystem benefits from various accelerators and bespoke government support for start-ups.
For example, take the Central Bank of Bahrain (CBB), which boasts a purpose-built fintech regulation and innovation unit, including a regulatory sandbox, which provides a testbed for fintech start-ups, and has enabled an enhanced banking experience for customers through Kingdom through open banking initiatives.
Bahrain Fintech Bay (BFB), the largest dedicated fintech hub in the region (Bank ABC is one of its 30 backers) is propelling the development of Bahrain as the fintech gateway to the region and quickly surpassing many other global challengers. Bahrain’s ambitious digital strategy, evidenced by bold, progressive moves such as the rollout of a ‘cloud first’ policy cements this position. It means we operate in a savvy market that is receptive to new technologies.
Inclusion through innovation at the heart of our strategy. We must constantly challenge ourselves to continue evolving and innovating. Can we use biometric technology to ensure that online banking services are made available to the unbanked? Can we leverage the increasing internet penetration and wide proliferation of mobile phones in even the most rural of areas to introduce mobile money wallets?
And can we increase international cooperation and information sharing, so that we can provide no-frills bank accounts and credit to all? Regionally we have a generation of young entrepreneurs in the Middle East and North Africa who dream of success. Innovation in banking can help this generation realise their dreams.
How can we innovate our approach to data sharing so that the API economy can empower these entrepreneurs? As big banks, can we be agile enough to drive innovation, focus on customers, and facilitate the next fintech unicorn?
In corporate banking fintech innovations such as faster interbank capital transfers, more access and sharing of financial data, and committing to global standards for interbank payments-related communications such as ISO 20022, will help rebuild trust in the banking sector, regenerate economies, and reassert the region as a leader in banking globally. Our 3rd Middle East and Africa FinTech Forum takes place in Bahrain on 21st February 2019, and financial inclusion is a central theme.
For me, this the pillar on which the future of our industry will be built, and the means by which it is already changing beyond recognition. We will have Regulators from across the Middle East and African, industry leaders and some of the most innovative thinkers from around the world.
Together we will imagine how fintech innovations can improve financial inclusion at all of these levels, and integrate regional and global solutions for all inclusion, we have achieved a great deal but there is so much more to achieve. Globally more than 1.7 billion adults remain unbanked, and many more are underserved by their banks.
Yet we see the advances in artificial intelligence disrupting banking. The rise of open banking frameworks means that financial data can be shared and used in ways never seen before. Individuals and businesses will have new means of controlling their finances that are better integrated with other aspects of their existence.
At our 3rd Fintech Forum in February, Financial inclusion is at the heart of our Fintech approach. To succeed in this journey, as leaders, we need imagination. What will the communities and cities of the future look like? How will we, as an industry, harness technology to meet the changing needs of the people and businesses of tomorrow? And how will the young think of institutions like ours? We have the power, today, to change the story of the future.