Some 110 financial digital 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 cellphones to 645 percent since 2016 and leading to a decrease of in-branch transactions by 37 percent. Using the latest technology is one of the CBK’s key strategies since the earliest days of the banking sector.
The strategy had led to the use of bankcards in Kuwait since 1979, the first country to do so in the GCC region. In 1989, the initial seeds for the Shared Electronic Banking Company (KNET) were planted with an actual establishment in 1992. KNET handled in 2021 an estimated 558 million transactions online.
Through all these initiatives, the CBK had set a digital strategy that was an integral part of the Kuwait 2030 vision for development. The International Banking Conference “Shaping the Future”, held in Kuwait 2019, was the focal point pushing for digitizing banking regionally and internationally with the participation of banking experts and leading economic and financial figures from around the globe.
In regards to the first goal, the CBK launched in 2004 the Kuwait Automated Settlement System for Inter-participant Payments (KASSIP), originally aimed to handle large transactions, but it also was capable of handling high volumes of smaller ones. In July 11, 2021, a new KASSIP was launched with an “integrated network of electronic payment systems at par with international standards”; this includes the ISO 20022 — an international standard for exchanging electronic messages between financial institutions. The CBK worked on an electronic checks clearing service and launched in June 2015 to substitute the orthodox checks clearing.
The service minimized the service, clearing checks in one day rather than three. The CBK also launched February of 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) that connected Real Time Gross Settlement Systems (RTGSS). To meet the second goal, the CBK was keen on a comprehensive environment for auditing to boost the banking and financial sector within the realm of digital transactions. The bank issued 2018 a guideline for digital payment to organize the procedure and protect the rights of clients and service providers. A guideline for digital banking was also released by the bank, specifying the services within digital banking as well as the relations between the banks and institutes. The CBK also opened registrations for independent banks eager to work digitally, providing licenses for said entities. By Fawaz Karami, (KUNA)
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