Major strategy to fuel growth of fintech industry in Oman

The Central Bank of Oman (CBO) is formulating a robust and comprehensive strategy to support the growth and adoption of financial technology (fintech) services in the Sultanate — a move designed to launch Oman into a burgeoning global industry projected to hit a market value of $300 billion by 2025. Oman’s fintech strategy, according to the Central Bank’s Executive President, has the potential to fuel, among other things, the roll-out of innovative banking and financial products, promote venture capitalism, drive entrepreneurship and employment generation, and spur economic development in general. “Recognising the significance of technological relevance and its necessity in the arena of banking, the CBO has been playing a proactive catalytic role in providing and creating an enabling environment to facilitate the growth of fintech in the Sultanate’’, Tahir bin Salim al Amri said. Auguring well for the growth of this sector, he noted, is a “young, tech savvy population” with high telecom and internet penetration rates averaging 131 per cent for mobile phone use, 104 per cent per for mobile broadband access per inhabitant, and 75 per cent fixed broadband access per household. Speaking at the 5th New Age Banking Summit 2020 held in Muscat last week, Al Amri said the apex bank’s roadmap for fintech development will unlock significant benefits for the banking and financial services sector and the Omani economy as a whole. “The fintech strategy of CBO is aimed at establishing a comprehensive fintech ecosystem in Oman to foster and nurture fintech start-ups, SMEs and technology firms besides facilitating the existing players to innovate, develop and offer digital solutions. Thus, apart from being in the lead in current times, the strategy will also serve as an impetus to our country’s economic growth, open new job opportunities and hopefully attract venture capitalists.” Supporting the formulation of the strategy is an in-house fintech committee comprising of “young and energetic minds” tasked with developing a robust fintech sector in the Sultanate within the mandate of the Central Bank, said the Executive President. Already, a Fintech Regulatory Sandbox Framework set in place by the CBO in the second quarter of this year will enable applicants — both from licensed and non-licensed institutions — “to test their proposed fintech solutions live under CBO’s oversight”, said Al Amri. He further stated: “I’m glad to share that the official rollout will happen shortly, which will pave the way for entities to launch and test their products in the sandbox. Further the regulatory departments and the Fintech Committee are in the process of finalising draft cloud computing guidelines, which will shortly go through a round of consultations with all stakeholders. Once finalised, it will provide the framework for availing cloud services by licenced institutions to foster the growth of local cloud providers.” Al Amri noted in particular the role of technology in enabling the delivery of safe banking and financial services to the general population amid the COVID-19 pandemic. “In the present challenging times of social distancing, technology has played a vital role in ensuring seamless and uninterrupted financial transactions which are so critical for the smooth functioning of the economy. We at CBO have effectively leveraged technological infrastructure and the tools at our disposal to provide the much needed relief to the affected sectors of the economy and ensured no disruption in the efficient functioning of the financial system.” Among the measures implemented by the apex bank to facilitate the provision of banking services while supporting adherence to pandemic safety precautions were: waivers or reduced charges for digital transactions, doubling the limit for contactless and mobile payments, permitting temporary use of expired debit or credit cards, and authorising digital onboarding of customers for opening savings bank accounts, he added.