Financial technology changes Kuwait’s banking landscape with new mediums and accompanying regulations


While the digital revolution has swept through many industries, the Kuwaiti banking and finance sectors remain largely unchanged. However, there is a definite sense that digital innovations are gaining ground as banks establish financial technology (fintech) departments in order to guide policy. Technology has the potential to reform the face of banking, and the way in which changes are implemented in the short term will be key. Mobile and online banking, e-payments and new regulations will be important areas of development moving forward.

Digital Advancement

While a seamless, instant, peer-to-peer payment system remains largely unavailable on a global scale, fintech is becoming key to providing bank services locally. As such, the authorities have identified the digital transformation as key to successfully driving economic growth in the New Kuwait 2035 long-term development strategy. “It is clear that we will need to embrace the digital banking transformation,” Waleed Al Awadhi, executive director of supervision at the Central Bank of Kuwait, told OBG. “Fintech is going to revolutionise the entire profile of financial services, and we need to keep up with the rapid pace of change in the global banking environment,” he added.

In line with this strategy, in September 2018 the central bank mandated that all service providers register on its e-payments system and develop plans for a digital version of the Kuwaiti dinar by FY 2020/21. “Real-time payments are the top priority, and we are working with electronic banking services firm K-net to achieve this,” Al Awadhi told OBG. “We are looking at a digital dinar and blockchain technologies as well.” Among local banks, Commercial Bank of Kuwait has been a leading proponent of tech innovation by introducing a series of digital upgrades since 2013. Chief among these was the 2017 introduction of InstaPay, a service that allows the peer-to-peer transfer of dinars through Kuwait’s existing payments system provided by K-net. The Commercial Bank of Kuwait also offers a foreign exchange service that allows customers to see complete, real-time charges by multiple different counterparties.


More recently, in April 2019 the Commercial Bank of Kuwait launched T-Pay, a digital wallet attached to a bank account that can process payments through point-of-sale devices, other digital wallets using QR codes and via the popular messenger service WhatsApp. Bader Qamhieh, acting general manager of IT at the Commercial Bank of Kuwait, told OBG that the bank has introduced self-service terminals, integrated with a smart queue e-system and customer self-service kiosks. By automatically filing paperwork, it should generate cost savings in terms of human resources, he added. “We used to have seven customer service officers at the head office, we now have two, with eight self-service machines. Banks are evolving into technology-enabled, modern institutions that effectively support the fintech ecosystem,” Qamhieh told OBG.

Bank customers are gradually becoming more comfortable with a wide range of digital services. “This is especially true of younger generations,” Adel Abdul Wahab Al Majed, vice-chairman and CEO of Boubyan Bank, told OBG. “Young people prefer realtime transactions, and are set to move up the ranks to become banks’ principal client base,” he said.

Other banks have also been active in fintech. In May 2016 Gulf Bank became the first establishment in the region to launch a biometric data platform for enhanced security. One year later, NBK opened a fully digital customer care centre, which was part of an overarching strategy to move towards virtual branches and online service delivery. Meanwhile, Kuwait International Bank is planning to use digital innovations to improve customer service by investing in an interactive voice response portal, live chat assistance, and more mobile and online services.

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The Report: Kuwait 2019

Banking chapter from The Report: Kuwait 2019

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