If you thought Bahrain’s transformation into a digital economy wasn’t taking place as fast as you had hoped for, soon you might have to reconsider your stand. After all, if all goes well, the Kingdom could take as little as two years to turn itself into a near-cashless digital economy.
That claim came from none other than the chief executive of Arab Financial Services (AFS), B. Chandrasekhar himself. And judging by some of the behind-the-scene modernization attempts the government is currently undertaking, it looks like Chandrasekhar’s forecast is firmly rooted in reality rather than being merely an over-optimistic outlook.
In A key move with potentially far-reaching impacts, Bahrain is already preparing to pass a legislation aimed at making digital salary payments mandatory across the country. Among other benefits, this move will ensure that the bulk of the Kingdom’s workforce is included in the digital economy network.
Chandrasekhar, during his speech at the BCICAI Conference late last week, noted that the next 12 months will be crucial as the government makes all necessary arrangements to make e-salaries legal across all levels.
Rewarding as it is, the move will likely put a fair amount of strain on financial institutions and digital economy purveyors as they push through eKYC procedures to make the system free of possible security loopholes.
He further stated that a proper ecosystem encompassing a well distributed “network with end-to-end digitization” is required for the country to establish itself as a leading digital economy. This end-to-end digitization should ideally accommodate everyone – from telcos to Central Bank and from merchants to money transfer platforms.
The whole process will likely take at least a couple of years to yield the desired results, the AFS CEO noted, adding that the biggest challenge would be to bring everyone into the financial system.
Chandrasekhar also acknowledged that the Central Bank of Bahrain’s initiative to start a “regulatory sandbox” for emerging FinTech companies boosted the ongoing efforts to turn the country into a leading digital economy.
(For the uninitiated, the CBB’s “regulatory sandbox” allows FinTech businesses from across the world to test their innovations and banking ideas in a safe environment with minimal restrictions.)