The Central Bank of Kuwait (CBK) held a virtual event titled "Stability and Enablement", on 31 January 2022. The event is held out of CBK's keenness on fulfilling its mandate in bolstering monetary stability and financial stability, particularly in an increasingly complex environment with ever-growing risks. At the same time, CBK is embracing digitalization to modernize itself and enable the advancement of, drive innovation in, and leverage financial technologies in the financial sector.
The event announced several developments to usher in a new era in banking and finance and help create a financial system that is rich in services, innovation, entrepreneurship, and FinTech.
Aiming to encourage innovation and provide the best service to customers, a framework has been developed for digital banking that allows existing banks to offer and develop digital services through digital units within their organization structure or through partnership with a third party. It also allows for establishment of new standalone digital banks. You may find more information on digital banking and guidelines for establishing new digital banks under this section:
- CBK is open for applications for new digital banks licenses.
- Guidelines and application form are available for download - in Arabic:
- The deadline for applications is 30 June 2022.
- Approved applications will be announced by year end.
To support and enable FinTech companies, the CBK is working on enhancing its fintech framework, specifically in the areas of payments, lending and the regulatory sandbox environment. In this section, you may find highlights of the main developments, current and underway, as well as review the consultative paper containing the draft electronic payments instructions and provide feedback in this regard.
- A consultative paper - in Arabic - that included a draft of updated instructions concerning electronic payments was posted for feedback, as part of the process issuing the revised instructions later this year. CBK has concluded the review of all feedback received by March 24, 2022.
- FAQs received on the draft of updated instructions concerning electronic payments - in Arabic (updated on May 12, 2022).
- Preparing to amend the lending framework to enable new lending business models through FinTech companies.
- Upgrading Sandbox Framework in several stages throughout the year:
- increasing efficiency in all stages of the sandbox environment.
- supporting new FinTech companies through workshops and meetings.
- facilitating live-testing of products and services in the local market.
The CBK lends considerable focus to the enablement of the technological environment, since it is crucial for achieving digital transformation both in the CBK and on the sector level. The Bank adopted a flexible and modern approach to regulation while encouraging responsible and sustainable innovation and contributing to digital and technical insights to improve knowledge in the market. You may find more information in this regard under this section.
- Issuing instructions concerning cloud computing and digital onboarding.
- Updating the Open Banking and Outsourcing frameworks.
- Cooperation with banks and Knet to develop QR code payments and make them available at all Points of Sale.
- Increasing speed of cross-border transactions through the GCC (AFAQ) RTGS payment system.
The Central Bank of Kuwait’s digital transformation strategy aims to enhance efficiency and efficacy by adopting modern processes to fulfil the CBK’s mandate of maintaining monetary stability and financial stability. The transformation is built on six main pillars:
- Reporting through state-of-the-art fully integrated CBK-wide data platform.
- A 360-degree forward-looking view of regulated units.
- End-to-end digitalized and paperless processes.
- Forward-looking insights informed by targeted analytics.
- Future-proof technology at the heart of the new digital foundation.
- Best-in-class capabilities within a solid and adaptable structure.