Interview: Joseph Abraham
In what ways can regulations be amended to create an environment conducive to safe, secure and dynamic digital banking?
JOSEPH ABRAHAM: The Qatar Central Bank (QCB) fully recognised the importance of financial technology in developing the banking industry in its Second Strategic Plan for Financial Sector Regulation 2017–22, and has also recognised the need for appropriate regulation. As such, the current regulatory framework already facilitates safe and secure digital banking solutions. The rules today have not hindered CBQ’s development nor the release of digital banking products, such as 60-second remittances, contactless credit cards, e-gifts, a new trade portal and remote cheque scanning. What is more, the 2022 FIFA World Cup has served as an impetus for the development of innovative solutions and this presents many opportunities. Regulation is evolving at pace, both facilitating and driving these opportunities for investment and participation.
What do the positive ratings from Fitch and other agencies for CBQ and Qatar mean for the economy and, more specifically, for the banking sector?
ABRAHAM: The ratings reaffirm our confidence in the future of Qatar’s banking sector. CBQ’s “A” rating is a reflection of Qatar’s strong economic fundamentals, the government’s prudent macroeconomic management and the disciplined execution of our five-year strategic plan initiated in 2016. The performance of the banking sector strongly correlates to the performance of the underlying economy and we have good reason to be optimistic. Qatar has a resilient, well-diversified economy backed by large sovereign reserves and has maintained its position as the world’s largest gas exporter despite the blockade. The IMF forecasts GDP growth of 3.1% for 2019, and with oil prices above the government’s conservative assumed price, a budget surplus is expected to flow back into corporations and banks as the government continues to invest in strengthening the country’s growing knowledge-based economy.
Does Qatar’s adoption of digital technology meet global standards? What digital products have been successful in the local market?
ABRAHAM: Qatar’s banking industry is largely keeping pace with the fast-changing world of digital technology and has seen an exponential growth in digital transactions, contactless credit cards, biometric security measures and the use of blockchain. Previously, our technology and operational functions were outsourced to India. We have brought this back to Qatar by creating a subsidiary called Commercial Bank Innovation Services, which is something unique to Qatar, providing the company with a platform to innovate, digitalise operations and quickly develop new digital products relevant to our customers.
How would you evaluate the position of Qatar’s banking sector in the years after the blockade?
ABRAHAM: The banking sector is in good shape and confidence has been restored following the early days of the blockade in 2017. With support from the government and the QCB, Qatar’s banks have demonstrated resilience by quickly overcoming the initial effects of the economic embargo and today they are profitable, liquid and well capitalised.
As with before the blockade, government investment and diversification efforts have created opportunities for banks in energy projects and infrastructure development, especially related to the 2022 FIFA World Cup. What has changed is there are many opportunities in self-sufficiency projects. Projects related to food security, manufacturing and logistics have been deemed a priority by the government and this has created new openings for lenders and is accelerating economic diversification.
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