Friday, March 29, 2024 | Ramadan 18, 1445 H
clear sky
weather
OMAN
25°C / 25°C
EDITOR IN CHIEF- ABDULLAH BIN SALIM AL SHUEILI

CBO task force to drive adoption of Industry 4.0 in banking sector

1201213
1201213
minus
plus

The Central Bank of Oman (CBO) has set up a task force to help accelerate the uptake of Industry 4.0 technologies in the Sultanate’s banking and financial services industry.


The task force, according to Tahir bin Salim al Amri (pictured), Executive President, is currently engaging with various banking and financial institutions in harnessing the transformational power of a range of emerging technologies to drive the growth of the sector, as well as support national economic development as well.


“The CBO has formed an internal task force that is working with the concerned institutions in the sector to adopt new technologies under the 4th Industrial Revolution,” said Al Amri. “It aims at providing the most secure and updated financial applications like payments systems based on Blockchain technology and electronic Know Your Customer (eKYC) services. The task force is also responsible for proposing the best ways to go forward in creating supportive policies that are committed to smoothening the integration of these new technologies and encouraging the supply of sound and stable fintech opportunities.”


Delivering the keynote address at the opening of the 1st International Conference on Banking, Finance and Business (ICBFB 2019) at the College of Banking & Financial Studies (CBFS) on Wednesday, April 24, the Executive President said the 4th Industrial Revolution held the key to unearthing solutions to bottlenecks in the delivery of banking credit to the private sector, particularly small and medium enterprises (SMEs).


“The use of Artificial Intelligence (AI), automation and Machine Learning (ML) tools have helped reduce the cost of production of goods and services in many sectors. In addition, many investors and startups are actively implementing ideas that resonate with the spirit of the 4th Industrial Revolution. We urge banks and investors in Oman to tap the potential and explore the horizons of the 4th Industrial Revolution by implementing new technologies to improve productivity and efficiency in the sector,” said Al Amri.


Earlier, the Executive President underscored the pivotal role of financial intermediation in the nation’s ongoing economic development. “The role of financial intermediation is central and critical to our sustainable, inclusive economic growth. Therefore, in recognition of its importance, the Omani banking sector has been continuously adopting new methods and technologies to improve the financial intermediation process and extend the requisite financing to all sectors including SMEs, and thus promote investment opportunities in Oman. The CBO has also been proactive in this regard and undertakes timely policy measures to address the challenges posed by domestic and global developments so that financial intermediation does not get hampered,” he said.


As a result of a series of enabling policy measures implemented by the CBO, the Omani banking sector was able to extend more than RO 1 billion in finance to the private sector in 2018, while maintaining favourable interest rates, according to the Executive President. Bank credit increased by 6.5 per cent during 2018 in line with the expansion of non-oil activities in the Sultanate, he said.


However, despite their role as financial intermediaries, Omani banks continue to face several risks which in turn affect their lending decisions and overall investment activities in the Sultanate, he pointed out. “One such risk is maturity transformation while extending funding to projects with long gestation periods. Similarly, banks have to deal with challenges with regard to risk while lending to SMEs due to various factors such as lack of capacity, inadequate credit information, lack of collaterals, insufficient cash flows, unsatisfactory record keeping, weak management, and so on.


These kinds of challenges appear to be hindering financing to large projects, as well as SMEs, in turn adversely affecting the overall investment activities in the country,” he said, stressing in this regard the importance of collaboration between the sector, academia and policymakers in barnstorming potential solutions to these challenges.


SHARE ARTICLE
arrow up
home icon