Kuwait Central Bank’s Digital Transactions Grow 645% Since 2016

By on September 13, 2022 0

Some 110 digital financial services had entered the Kuwaiti market due to the flexible auditing approach adopted by the Central Bank of Kuwait (CBK), pushing digital financial transactions via mobile phones to 645% since 2016 and leading to a decrease in-branch transactions by 37%. percent. Using the latest technology has been one of CBK’s key strategies since the early days of banking.

The strategy had led to the use of bank cards in Kuwait since 1979, the first country to do so in the GCC region. In 1989, the first seeds of the Shared Electronic Banking Company (KNET) were planted with an actual establishment in 1992. KNET processed in 2021 approximately 558 million online transactions.

Through all these initiatives, the CBK had defined a digital strategy which was an integral part of the development vision of Kuwait 2030. The international banking conference “Shaping the Future”, held in Kuwait in 2019, was the point center for the digitization of banking services at regional and international levels with the participation of banking experts and leading economic and financial personalities from around the world.

Feasible
With regard to the first objective, the CBK launched the Kuwait Automated Settlement System for Inter-Participant Payments (KASSIP) in 2004, originally intended to handle large transactions, but was also capable of handling high volumes of smaller transactions. On July 11, 2021, a new KASSIP was launched with an “integrated network of electronic payment systems at par with international standards”; this includes ISO 20022 — an international standard for the exchange of electronic messages between financial institutions. The CBK has been working on an electronic check clearing service and launched in June 2015 to replace orthodox check clearing.

The service minimized service, clearing checks in one day instead of three. The CBK also launched in February 2019 an online banking service including transfers within the Central Bank as well as transfers between the CBK and other local banks. In 2022, the CBK joined the GCC Cross-Border Payment System (AFAQ) which connected Real-Time Gross Settlement Systems (RTGSS). To achieve the second objective, the CBK wanted a complete auditing environment to boost the banking and financial sector in the field of digital transactions. The bank published in 2018 a directive for digital payment to organize the procedure and protect the rights of customers and service providers. A directive for digital banking has also been published by the bank, specifying the services within the digital bank as well as the relations between banks and institutes. The CBK has also opened registrations for independent banks willing to work digitally, providing licenses for said entities. By Fawaz Karami, (KUNA)

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