Published: May 2, 2019
Bahrain has moved swiftly to establish itself as one of the world’s centres for financial technology (fintech). The kingdom’s inward investment body and central bank and two successful start-ups explain how the sector has taken off. Phil Thornton reports.
For the last two years there has been a quiet financial revolution underway in the tiny island kingdom of Bahrain that has begun to bear fruit. In June 2017 the Central Bank of Bahrain (CBB) launched the first in a series of initiatives that aimed to make the kingdom the Middle East’s centre for international innovation and finance.
It introduced a regulatory sandbox that has allowed financial technology (fintech) firms and digitally-focussed financial institutions around the world to test and experiment with their banking ideas and solutions.
The virtual space created by the sandbox has provided a safe area in which fintech businesses — both established and start-ups— can test and refine their technology-based innovative products, services and platforms without being immediately burdened by the usual regulatory and financial requirements that would otherwise apply to their activities.
The head of the central bank’s fintech and Innovation Unit, Yasmeen Al Sharaf, admitted this was not the usual role a central bank plays. “Regulators are genarally risk averse and when it comes to new ideas they are not keen to enter unknown waters,” she said referring to the trend towards the digital transformation that was underway across financial services globally.