QCB set to announce FinTech strategy
Qatar Central Bank (QCB) Governor H E Sheikh Abdulla bin Saoud Al Thani said yesterday that the central bank is working on the banking industry’s financial technology (FinTech) strategy, in cooperation with leading financial institutions and financial technology companies. The strategy, where the central bank would contribute to creating a modern regulatory environment that supports innovation and market stability, will be announced soon, he said.
Delivering the opening address at The Euromoney Qatar Conference, the QCB Governor said the central bank, in its capacity as the regulatory and supervisory authority for the financial sector, is fully aware of the importance of financial technology in the development of the banking and financial sector in the country.
Supported by cutting-edge innovations, the global financial sector is rapidly growing. Technology is playing great role in transforming the banking system from its conventional channels to digital alternatives. Digital banks, which are set to revolutionise the global banking system, are on its way. These new age banks are capable of providing key traditional services through mobile applications, Sheikh Abdulla said.
The future banking industry is heading towards a new historical turning point. AI and blockchain are going to completely transform the industry. Sheikh Abdulla said that the regulatory and supervisory bodies around the world will need to quickly cope up with the new challenges in order to reduce regulatory gaps and maintain financial stability. With technology giants developing faster and lower-cost solutions and have begun to offer alternative financial services, traditional banking services have to gear up to face the challenges by investing heavily in technology.He pointed out that the developments witnessed in the banking technology sector, and the desire of customers to use digital services, have redefined the concept of retail banking. Improving operational efficiency can only be done through the adoption of new technologies.
Reaffirming that the artificial intelligence, electronic cloud-based banking services and enhanced digital capabilities are increasingly becoming core element of the banking industry, Sheikh Abdulla urged the banks to establish more distinct system through the cooperation with leading FinTech companies.
Mobile banking services can now be executed at any time and any place. The entry of tech giants with huge customer base, like “Apple”, “Google”, “Amazon”, has the potential to totally disrupt the traditional banking industry.
He said that the new developments in the banking industry also raise many concerns about privacy, competition and market monopoly, which may create threats that affect the financial system, as pointed out by the International Monetary Fund has noted this in the recent G20 summit in Tokyo.
These developments in the financial landscape have forced the regulatory and supervisory authorities to rethink the regulation as well as supervision and oversight strategy, where, the opportunities and solutions offered by FinTec and big technology companies may increase operating and cybersecurity risks, due to the interconnected operations with information technology.
The QCB Governor stressed that the future of the banking sector regarding the use of data will combine high speed, great diversity, and a huge amount of data, which may raise concerns about protecting and managing that data, protecting privacy, confidentiality of transactions, and cyber security, therefore, regulatory and supervisory bodies need to acquire specialized skills to deal with massive technological innovation and growth in digital finance, and should also issue decisions and regulatory and supervisory instructions regarding financial technology and compliance requirements and monitor their implementation.
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