The Central Bank of Kuwait has announced that it is embarking on a ‘long list’ of initiatives aiming to revamp and upgrade the IT infrastructure of the country’s financial systems.
Details of the initiatives were outlined in a speech by H.E. Dr. Mohammad Y. Al-Hashel, Governor, Central Bank of Kuwait at the Global Informatics Forum, held at the Gulf University for Science and Technology, State of Kuwait.
One major initiative he spoke about was the Kuwait National Payment System (KNPS), a strategic mega project being developed with local banks and payment gateways to be rolled out in two phases in 2019 and 2020.
The system will cover various initiatives including the Government Electronic Banking System, Wages Protection System, Digital Currency and Automated Clearing House.
Each initiative, he said, is designed to ‘enhance the stability and efficiency’ of the financial system and build the necessary infrastructure to address future needs.
“For example, the Government Electronic Banking System dramatically improves efficiency by executing all government transactions online,” he said.
“It replaces a paper-based process with an online automated cycle that is both immediate and accurate.
“This system is live today and is being rolled out to all government bodies.”
To prepare for the potential of issuing digital currency in the future, CBK says it will have the tools ready to go live. In addition to e-wallets, this includes a Digital Kuwaiti Dinar, which will facilitate exchange against tokenised assets.
And to encourage startups and entrepreneurs further, the CBK has recently announced the Regulatory Sandbox Framework which allows for experimentation in innovative products and services, but with a lighter regulatory touch that ensures the safety and soundness of the financial and banking sector without stifling innovation.
H.E. Dr. Mohammad Y. Al-Hashel said: “With the advent of fintech, technology is revolutionising the ways in which we spend, save, invest and lend. We realise that we cannot slow technological advance, nor would we want to. We welcome change, and we choose to steer technological innovation in the right direction towards our objective of providing inclusive sustainable prosperity.”
“In short, we believe that when regulators work hand in hand with all stakeholders to serve society, financial innovation can be responsibly steered towards our aim of promoting inclusive sustainable prosperity,” he added.