On patterns of currency use, cross-border transactions and factors influencing the adoption of digital payment systems
How do global regulatory frameworks and banking requirements shape the way Syrian lenders engage in cross-border financial transactions?
RA’EF YOUSSEF ABOU DAHOUD: International regulatory frameworks largely determine what Syrian banks can and cannot do in cross-border finance. Today, most institutions do not have broad correspondent-banking access, which means that even straightforward transfers to or from Syria face multiple layers of screening and, in many cases, rejection. When a transaction carries the name “Syria”, organisations immediately apply heightened compliance checks, particularly around sanctions, and anti-money-laundering and counterterrorism financing requirements. Because of this, Syrian banks often cannot rely on normal international channels that other countries take for granted. The sector is working to meet global standards and demonstrate that lenders operate in line with international best practices.
By what means do patterns of currency use, savings behaviour and public trust influence liquidity dynamics within the banking sector?
ABOU DAHOUD: Liquidity in Syrian banks is shaped directly by people’s behaviour. Because households have limited confidence in the stability of the local currency, they tend to convert earnings into foreign currency quickly and hold it as cash. At the same time, many prefer to keep savings at home rather than in bank accounts, which means the system receives relatively few retail deposits. With a narrow deposit base, banks have limited liquidity to work with, especially for lending to the private sector or financing trade. Most available deposits come from public sector entities rather than from individuals or businesses. This is why confidence is so important: If people regain trust in the currency and in the institutions supervising the financial system, deposits would increase, liquidity would improve and lenders would be able to play a much more active role in supporting economic activity.
In what ways do banks currently support or participate in cross-border trade flows, particularly with neighbouring markets such as Jordan?
ABOU DAHOUD: Syria continues to have active trading links with neighbouring markets, especially for goods that enter those countries first and then move onwards to Syria as transit shipments. Banks support this activity mainly by providing local account services and settlement for Syrian traders who are paying for imports or receiving proceeds from exports. However, without full correspondent banking channels, the sector cannot yet participate in cross-border settlement through conventional banking infrastructure. This pushes trade finance towards cash or informal mechanisms rather than digital transfers. One key example of this is the internal SWIFT connection between Bank of Jordan-Jordan and Bank of Jordan-Syria. This corridor is vital for secure, compliant and efficient financial communication across the two markets, especially given Syria’s limited access to global banking channels.
What factors are influencing the development and adoption of digital payment systems and electronic banking services in Syria today?
ABOU DAHOUD: The economy still operates largely on a cash basis, and many merchants prefer cash because they want immediate access to funds and are unsure whether banks can provide the cash they need on demand. In parallel, infrastructure constraints make it difficult to guarantee reliable electronic services or continuous point-of-sale availability. Equally important is the element of trust, without which adoption cannot advance. Consumers want assurance that digital transactions will be processed predictably, and merchants want confidence that electronic payments will translate into usable funds. Banks are working on digitalisation, and the direction is positive, but adoption will depend on improving reliability, strengthening infrastructure and reinforcing trust in formal channels.
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