Iraq's Digital Banking Revolution: Launching New Financial Horizons in 2024
Iraq is poised to make significant strides in the digital banking sector, with the country expecting a substantial increase in the number of digital banks compared to its neighbors. The Governor of the Central Bank of Iraq (CBI), Ali Al-Allaq, has expressed optimism about the growth of digital banking, predicting that Iraq will lead in this area with a greater number of digital banks than surrounding nations.
The Digital Banking Wave Sweeping Iraq
Al-Allaq highlighted the global trend toward digital banking, emphasizing the alignment of this shift with technological advancements. With digital banks managing annual financial transactions worth approximately 7 trillion by 2027, the importance of digital banking is clear.
Iraq's strategic move toward digital banking is backed by extensive studies and the review of experiences from other countries, ensuring the establishment of well-defined rules and regulations for licensing digital banks. This careful planning is expected to create a robust digital banking environment in Iraq.
National Bank of Iraq's Digital Transformation
The National Bank of Iraq (NBI), part of the Capital Bank Group, has taken a significant step in its digital transformation journey by partnering with Temenos, a Swiss software company specializing in banking and finance solutions. This collaboration has led to the modernization of NBI's financial services, replacing outdated legacy systems with a unified core banking and payments platform.
Temenos' pre-configured capabilities and APIs facilitated a rapid and seamless transition for NBI, positioning it as the first within the Capital Bank Group to adopt Temenos Payments. The National Bank of Iraq's Chief Operations Officer, Izzidin Abusalameh, emphasized that this achievement marks a significant milestone in the bank's digital transformation, enhancing operational efficiency and providing customers with superior digital banking experiences.
Qatar Development Bank: A Model for Digital Banking Excellence
Qatar Development Bank (QDB) has been recognized as the best digital bank at the 2024 Banking Excellence Awards. This accolade acknowledges QDB's efforts in digital transformation and technological innovation, particularly in supporting SMEs and their digital transformation.
QDB's digital portal, launched in January 2023, offers integrated digital features and solutions for entrepreneurs, streamlining operations and reducing paper procedures. The bank's commitment to digital transformation has significantly bolstered customer satisfaction, with 92% of active users returning to the portal within 1-5 days due to its ease of use and integration with government and financial institutions.
The Licensing Rush for Digital Banks in Iraq
In a striking development, 70 digital banks have applied for licenses with the Central Bank of Iraq. Governor Al-Alaq expressed surprise at the high volume of applications, ranging from 60 to 70 banks, and mentioned that the CBI is currently in the process of reviewing these applications.
This surge in applications underscores the growing interest and anticipation surrounding Iraq's digital banking sector. The CBI's commitment to keeping pace with global advancements and fostering development is evident in its engagement with domestic and international entities. With the CBI maintaining strong relationships with international banks, electronic payment companies, and central banks worldwide, Iraq's digital banking landscape is poised for significant growth and innovation.
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