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Oman banks urged to adopt fintech and open banking


Oman Banks Association (OBA) has exhorted lending institutions in the Sultanate to embrace some of the technological innovations that are currently redefining the global banking and financial services landscape. The Association’s Chief Executive Officer, Ali Hassan Moosa, warned that Omani banks ignore at their own peril an array of new developments that have the potential to revolutionise the global industry. The list includes, among other trends, fintech (financial technologies), open banking, robotic process automation, Artificial Intelligence, machine learning, Big Data, cyber forensics and predictive analytics, he said.

Ali Hassan singled out fintech as an indispensable ingredient of banking business success. Lenders around the world have been incorporating fintech into their strategies, he said. “They either buy a fintech company, partner with fintechs, invest in fintech, transform into fintechs or serve fintechs. Many banks, including in Oman, are employing a combination of those strategies. One thing that banks cannot afford to do — whether in Oman or elsewhere — is to ignore fintech.”

Commenting on the changes induced by the coronavirus pandemic in the delivery of banking and financial services, the CEO pointed out that trends reported elsewhere around the world are being reflected in Oman as well. Growing numbers of customers have resorted to using mobile banking apps, contactless ‘tap and go’ credit card services, and e-commerce. “This is the story happening across the world, including in Oman.”

In particular, Ali Hassan Moosa urged local banks to pay special heed to the aspirations of Generation Z – a demographic cohort representing people born between roughly 1995 and 2015. “Gen Z will drive changes in the way banks deliver banking to their new customer base,” he said. “They constitute around 23 – 25 per cent of the world’s population, but in Oman that numbers are even higher.

Their needs are very similar to the rest of the population – safe and convenient banking, but on their terms. Their behaviour is completed different – they are hyper-connected and with a short attention span. They live literally with their smartphones. They are glued to social media with high video content. To reach them you have to go through these channels, not through text or SMS.”

Banks, he stressed, must connect with the lifestyles and emotions of Gen Z customers if they want to make inroads into this huge market. “Gen Z is likely to embrace alternative banking methods; If there is peer-to-peer (P2P) lending, they will opt for it. They are not interested in credit cards or the product offerings of banks. They are only interested in their lifestyle needs. And they are more likely to deal with socially and environmentally responsible financial institutions.”

In his presentation, Ali Hassan Moosa also underlined the potential for introducing open banking services in Oman. Open banking refers to the sharing of financial information electronically and securely with third party providers who offer a better experience for customers through the use of application programming interfaces (APIs).

Lenders offering open banking services effectively become “invisible” by allowing their customers to create a platform where they can integrate multi-financial services under their brands, he said, citing Spanish multinational financial services firm BBVA as a frontrunner in this space.

The head of Oman Banks Association called on local banks to be suitably geared for an upcoming period of accelerated change expected to sweep across the industry.

“Banking has to be around the customer’s smartphone; you have to enable instant P2P payment channels, cashless multicurrency exchanges, super e-wallets across borders, chatbots and intelligence assistance, behaviour based personalised offers, predictive analysis for your customers, and so on,” he added.

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