The future of financial services in Bahrain is a dynamic landscape marked by innovation, regulatory evolution, and a commitment to staying at the forefront of the global FinTech industry.
Bahrain’s financial services sector is underpinned by the unwavering commitment of the Central Bank of Bahrain (CBB) to create a regulatory environment where financial services can thrive. The CBB has introduced a regulatory sandbox and introduced new regulations for open banking, crypto assets, payments and crowdfunding. These amendments are designed to foster innovation, promote competition, and safeguard the interests of both consumers and businesses.
The CBB also plays a central role in ensuring that Bahrain remains a competitive and attractive destination for FinTech and financial service providers. By constantly improving regulations and fostering an environment conducive to innovation, the CBB is driving the financial services sector toward a promising future.
In this article, we will explore how Bahrain is shaping the future of financial services through new policies, the growth of financial businesses, and embracing emerging trends.
Bahrain is a Financial Innovator Worldwide.
The CBB continues to innovate financial services in Bahrain and abroad. Recently, the CBB was elected to the Coordination Group of the Global Financial Innovation Network (GFIN) for the 11th year in a row. GFIN is a group of over 70 international financial regulators and related organizations committed to supporting financial innovation. This group is overseen by a Coordination Group that helps determine the direction and strategy of the network.
As a member of GFIN the CBB has helped oversee several initiatives, including its first ever virtual greenwashing Techsprint. Additionally, the CBB oversaw a study to explore the adoption of AI and machine learning technologies in financial services.
AI and Machine learning are continuing to grow in financial services. The GFIN survey questioned 30 GFIN members about the use of AI and machine learning in financial service providers they oversee. They found that 33% of financial institutions in these areas use some amount of AI or machine learning in their operations. AI and machine learning use will only continue to grow as we learn to use it properly. As The CBB and Bahrain take the lead in helping develop these processes, it is poised to become a leader of AI and machine learning in fintech across the world.
Growing Financial Businesses in Bahrain
Several financial businesses in Bahrain are actively contributing to the sector’s evolution, with their growth reflecting the progressive policies of the CBB.
Binance
In October 2022, Binance went live in Bahrain, stimulating increased cryptocurrency adoption in the country, attracting new investors and fostering a dynamic digital asset ecosystem. The significance of Binance lies in its role as one of the world’s largest and most influential cryptocurrency exchanges. Its presence in any financial ecosystem can drive increased cryptocurrency adoption, investment, and innovation. Binance’s commitment to technological advancement and its global reach makes it a powerful catalyst for growth in the cryptocurrency and blockchain sectors, both locally and globally.
Tarabut Gateway
As the first graduate of Bahrain’s fintech sandbox, Tarabut Gateway works with banks across the region to provide open banking solutions. Tarabut Gateway has enhanced the customer experience by connecting them to each of their accounts in a single place. This was all made possible by The National Bank of Bahrain’s initial partnership with Tarabut Gateway, which paved the way for more open banking opportunities.
This move is particularly significant as it aligns with global trends in open banking, where financial institutions are increasingly recognizing the importance of collaboration and interoperability.
Bede
Recently introduced by Zain FinTech, the financial services arm of the Zain Group, Bede is a new fintech app that focuses on providing its users with the newest financial technologies and solutions. The app aims to support fintech development and innovation. This will allow for customer-centric financial solutions that are accessible and efficient for all its users.
Flooss
In October 2023 Flooss launched its digital consumer lending service. Through the digitization of financial services, Flooss aims to make loans more accessible to individuals so they can use the money for emergencies, travel, and even school expenses. From a single app, anyone can be approved for up to BHD 750. Flooss aims to remove the barriers to consumer lending and give power to the people.
Beyon
Beyon is fostering financial inclusion by providing innovative financial solutions that cater to a broad spectrum of customers. This inclusivity is particularly crucial in Bahrain, where a diverse population has varying financial needs. Beyon’s services are designed to be accessible to a wide range of users, ensuring that the population can benefit from modern financial tools and services. By providing tailored financial products and services, such as Visa prepaid cards, and applications that include flexible investments, and international transfers.
ila Bank
Digital banks are reshaping the financial industry. Streamlined operations, lower costs, and superior customer service have made them formidable competitors to traditional banks. In Bahrain, digital banks like ila Bankr are gaining ground, driven by the CBB’s progressive regulations. ila Bank offers a range of services including instant transfers, digital cards, and branchless banking.
In conclusion, the future of financial services in Bahrain is marked by dynamic policies, the growth of innovative businesses, and a keen eye on global trends. Bahrain’s commitment to improving regulations and fostering innovation ensures its place as a competitive player in the evolving FinTech landscape. As the financial services sector continues to grow, Bahrain is well-positioned to seize the opportunities and address the challenges of the rapidly changing industry.
