Governor Al Mansoori stresses the UAE’s support for the Arab Regional Payment System highlighting the system’s prominent role in promoting reginal financial integration and strengthening trade and investment relations with all economic partners
Abu Dhabi: On Thursday, 28th of March, the Chairman of the Arab Monetary Fund (AMF) concluded the high-level conference under the overarching theme of “The Role of Cross-Border Payments in Fostering Regional Financial Integration”. The conference, organized in collaboration with the German development agency GIZ, gathered over 350 industry leaders from around the world on the 27th and 28th of March 2019 at the InterContinental Hotel in Abu Dhabi, United Arab Emirates.
Senior officials and representatives from Arab ministries of finance and economy, central and commercial banks, financial institutions and innovators in the field of financial services, fintech, and payment systems participated in the conference. Attendees addressed regional and global cross-border payment challenges and potential solutions. They discussed a variety of subjects ranging from the future of regional cross-border payments, the industries’ trends, predictions and innovations, the safety of financial market infrastructures, to the role of technology in regulation.
Cross-border payments are typically associated with challenges. Recent responses by the market have so far only provided partial answers. In its efforts to enhance the efficiency of cross-border payments, the AMF used the opportunity of the conference to present their regional Arab payment platform as a complete solution to cross-border payment challenges faced in the region.
“Technology continues to develop at a rapid pace and is becoming increasingly intertwined with the financial sector”, said Dr. Abdulrahman A. Al Hamidy, Director General Chairman of the Board, Arab Monetary Fund. Dr. Al Hamidy then moved on to stress the need for the industry to respond to trends in technology with a view to increasing their benefits on the one hand and mitigating their risks around soundness and integrity, on the other. He added: “It is important to encourage innovation within a regulated environment that can strengthen financial stability as well as overall efficiency of the banking industry and financial markets”.
Dr. Al Hamidy then showcased a new platform that the AMF, along with Arab central banks, has been working on: “This payment platform is a low-cost, fast, simple and safe solution that addresses major issues that the industry faces today. The platform aims to expand intra-Arab trade and investment activities”, adding that “the AMF is working to bring this platform to the market at an accelerated pace. We will soon announce the date of the first transaction”.
During the conference, Mubarak Rashed Al Mansoori, UAE Central Bank Governor, delivered a statement emphasizing that this “pivotal program will facilitate and streamline intra-Arab payments”. Al Mansoori then highlighted the UAE’s commitment to the platform, “as we strongly believe it will play a prominent role in promoting economic and financial integration across Arab countries. It will also aim to create opportunities to strengthen trade and investment relations with all economic partners of the region.” Throughout the day, cross-border payment systems such as the regional Arab payment system were presented as catalysts that trigger economic growth, integration and financial stability.
With the growing exposure to risks in the financial industry, compliance requirements have been increasing, especially regarding AML, CFT and sanctions screening. In this context, the AMF emphasized how its platform would ensure compliance to international and regional requirements for AML/CFT checks and sanctions screening.
Speakers also discussed the importance of cyber security, in view of the rise of cyber threats and the risks they pose to financial institutions and global and regional financial stability. Panelists highlighted that with 50 billion devices connected to the internet, protecting financial market infrastructures is critical. They discussed methods that can be employed to improve cyber resilience for financial market infrastructures, banks and the financial system.
A panel was held around the changing role of technology in regulation. Speakers assessed how utilizing technology as a tool for national, regional and international integration and compliance to international standards and requirements; would have subsequent positive implications on financial infrastructures.
One of the trends discussed at the conference was the decreasing use of cash for payments in general, and cross-border payments specifically. Experts agreed that payment systems need to adapt and prepare for the decreasing use of cash, even though it is still being used, especially by marginalized communities.
On the important topic of financial inclusion, industry leaders discussed various methods that financial institutions can employ to increase access to financial services for marginalized communities, stressing on the important role of cross-border payment systems, such as the one being developed by the AMF, in reaching the unbanked.
Together, these discussions paved the ground for further collaboration in the regional payment industry to foster regional financial integration, economic growth and stability.
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