MUSCAT -- Oman's all banking communications will in the long-run be based on the MPLS (multi-protocol label switching)-based network (BankNet), set up in 2007. This was stated by Hamoud bin Sangoor al Zadjali, Chief Executive, Central Bank of Oman (CBO), in response to question by Oman Observer about the significance MPLS network for the banking sector.
The CBO together with Omantel established a private MPLS-based network (Banknet) dedicated for the banking community. "At present all commercial banks including specialised banks, financial institutes, Ministry of Finance and Muscat Security Market are interconnected via this MPLS network. Currently the communication takes place between these participants and CBO exclusively for EFT (electronic fund transfer) systems", said the CBO chief.
"Since the MPLS network infrastructure is already in place, participants no longer require to invest in additional communication infrastructure. In the long-run participants could focus on Banknet as the primary infrastructure for all banking communications", he said. MPLS technology, which appeared for the first time in 2001, is a versatile solution with features that differentiate it from other technologies, especially when it comes to reliability, data transfer, security and preservation.
MPLS allows the transfer of data, voice and picture in one stream within a highly efficient and compatible system. Omantel signed agreements with commercial banks in 2007 to connect their head offices, hundreds of branches throughout the country and disaster recovery centres using the MPLS network.
Al Zadjali said: "Digital technology is recognised as one of the key potential means for enhancing competition, efficiency and customer satisfaction in the banking system. The most visible signs of the effect of digital technology in the banking and financial services industry include rising use of telephone banking, ATMs, credit cards, debit cards, online banking through the home personal computer, hand-held device or mobile phone".
Digital technology certainly plays a key role in the growth of the banking industry in Oman. Just like any successful company, banking service providers have to change with time. Banks who are finding and building the best ways to enhance the functionality and range of their existing products and services with the help of digital technology could have an edge in a globally competitive banking business, Al Zadjali emphasised. Better adoption of digital technology could enhance the efficiency of the staff, and in a growing banking industry new employment opportunities would be created continuously for qualified job seekers.
On-line banking
In response to a question about online banking, Al Zadjali said "Banks in Oman provide on-line banking, as in other jurisdictions. The on-line banking facilities include access to information on accounts, transactions, products and services of banks, with increasing scope for utility payments, own accounts transfers, limited remittances and third party payments".
He said, "Central Bank has not prohibited third party payments through on-line banking, even though banks, in their own interests and in the interest of customers, need to be conservative on this, mainly because of the increasing sophistication of fraudsters". Banks do undertake periodic review of security concerns and permit third-party payments through on-line banking with necessary precautions, he added.
By Hasan Kamoonpuri
© Oman Daily Observer 2008
