Banks need to bridge tech gap

By: Hasan Kamoonpuri

MUSCAT: While banks in Oman have adopted the latest digital technology in alignment with the Central Bank of Oman’s strategy, there are still many a technological solution that needs to be implemented from the banks’ side in relations to the payment industry which include real time P2P payments across banks, mobile payment solutions, innovation in corporate banking services, IBAN (International Bank Account Number) implementation and contactless retail payment.

Hamood Sangour al Zadjali, Executive President, Central Bank of Oman.Hamood bin Sangour al Zadjali, Executive President, CBO, said this in comments to the Observer, while responding to a question on the role of technology in the banking industry. Al Zadjali said the CBO is working closely with banks in terms of providing them with the appropriate infrastructure, directives and general assistance in order to implement all these services in the market.

So far banks and financial institutions in Oman have recorded commendable achievements in the use of digital technology and innovation to enhance operational efficiency and customer experience.

There is a clear need to unlock further creativity by exploring new horizons in the world of technology contributing to the progress of the banking industry.

Al Zadjali said Omani banks and financial institutions must be prepared to go in for latest technology because there is a technology explosion in the banking sector.

The CBO Chief said the electronic payment field today is undergoing continuous improvement as they are considered to be backbone of the financial markets.

As of today, the CBO operates four different payment systems which are Real Time Gross Settlement System (RTGS), Automated Clearing House (ACH), Electronic Cheques Clearing (ECC) and ATM/POS Switch (OmanNet & GCCNet). Each one of these systems has a specific role in terms of electronic payment transfers.

For example, the RTGS system main function is to allow for high value instant transfers between financial institutions which includes all commercial banks; the ACH system allows for bulk payments transfers such as salaries and dividends; the ECC provides the platform is for clearing and settlement of cheques between banks; and finally the ATM/POS Switch system provides the platform for routing debit card transactions between banks within the Sultanate and GCC countries.

The CBO has taken many initiatives to adhere with international standards and acquire the latest technology available in the market.

With technical assistance from the World Bank, the CBO has drawn the National Payment Systems Strategy and work is under way to enact the National Payment System Law.

In addition, the CBO is undertaking several projects to enhance the current available payments infrastructure, and to build a solid ground for future innovative payment solutions, aiming to minimise the use of cash and to replace it with the use of different payment instruments.

The EMV project aims to enhance the technical security of debit cards through installing CHIPS in the debit cards.

In regards to the Switch system, a new functionality will be added to all ATMs which will lead to account to account transfers on a 24/7 basis.

In addition, CBO is in the process of acquiring a payment gateway that will reduce cost for all stakeholders and increase privacy and security for all users.

The CBO has also entered into a formal contract to upgrade its existing ECC payment system infrastructure and to create a National Cheque Archiving System which shall provide a central archive repository of all the transactions.

Since the implementation of the first electronic payment system RTGS in 2006, the payment system in Oman has become very efficient, effective and secured.

The current gaps in this field are being addressed by CBO through implementing multiple projects in the different payment systems in the Sultanate.

Experts say as for customers, they have ATMs, cash deposit machines, online banking, mobile banking, to name a few which are all fruits of technological advances which have made our banking experience much easier.

With the help of technology banks are able to reach out to more customers and provide better services to them.

Also, it helps them function in a more organised and secure way.

Thanks to the ever smarter digital tools, the use of technology is the key cause of shifting trends in banking.

New technologies have changed the banking industry from paper and branch based banks to digitised and networked banking services. Technology has also played a big role in producing a cashless society and reducing fraud in banks.


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