The rise of Fintech is helping Oman’s economy and Islamic banking sector to be more inclusive and more productive, according to Dr Qais Issa Mohammed al Yahyai, executive vice president of the Central Bank of Oman (CBO).
“Use of new technologies can offer significant opportunities to Islamic financial institutions to reduce cost of doing business and expand their outreach,” Yahyai said while giving a keynote address at Oman Islamic FinTech Forum on Wednesday.
Oman’s Islamic banking industry has taken great strides and emerged as an important component of the overall banking sector since its launch in 2012. “With eight players – two full-fledged Islamic banks and six Islamic windows – the sector has already achieved 13.3 per cent market share in terms of total assets at the end of March 2019. Total Islamic banking assets have reached to RO4.5bn with an average year-on-year growth of 13.4 per cent,” he said.
In terms of total assets, Oman’s Islamic banking assets are ranked 13th largest in the world, according to Islamic Financial Services Board’s (IFSB) 2018 stability report.
Yahyai said, in recent years, the world has witnessed a rapid growth in digital economy, spurred by new technologies and ability to collect and analyse vast amounts of data due to the use of smartphones and social media.
“Technology has become increasingly intertwined with our daily lives. A more tech-savvy customer is becoming more demanding and wants efficient and cost-effective services. Customers expect transactions to be settled in real time, without spending time for visiting branches and waiting for their turn to get serviced.”
This new digital economy is pushing the boundaries and placing new demands on financial sector, Yahyai said. “The rise of Fintech has unbundled the financial services in areas such as payments, credit, financing, financial planning, trading and investment, and insurance among others.”
Organised at Sheraton Oman Hotel by Elmangos, a leading global business events producer and consultancy firm, Oman
Islamic FinTech Forum set the stage for Islamic Fintech experts to meet and share their expertise in order to assess Oman’s potential in embracing Islamic Fintech to promote economic growth and develop the Islamic finance industry.
The CBO’s vice president said that the Fintech innovation is resulting in increased competition and reduced inefficiencies, which is helping the consumers to meet their unmet needs and allowing financial sector firms to use new ways of offering their traditional services.
He said in order to effectively respond to the emerging technological trends, the CBO is studying Fintech developments through a dedicated task force and devising a comprehensive strategy. “A collaboration between Islamic banks and Fintech firms could facilitate transfer of knowledge, reduce expenditures and create efficiency in the process,” Yahyai added.