Cedar-IBSi NextGen Banking & Technology Summit

Instant, Real-time Payments, e-KYC and digital onboarding; the FinTech space in the Middle East is rapidly evolving. As witnessed in Oman, banking customer expectations are quickly changing, increasing the need for an enhanced personalised experience with 24-hour access to financial services. Artificial Intelligence, Cloud Computing, and Open APIs drive these financial service innovations.

In this 2nd edition of the Cedar-IBSi Summit on NextGen Banking & Technology, we invite distinguished bankers, key technology players, and industry regulatory experts to share their perspectives on Innovation, Digital Adoption, FinTech Collaboration, Customer Journeys, Open Banking, Payments, and more.

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The Growing Influence of Digitalization on Oman’s Banking Sector

Keeping pace with global trends, Oman’s banking market is undergoing a significant digital transformation with online and mobile services making banking more accessible and convenient for customers. Digitalization of banking services has not only enhanced customer experience but also improved operational efficiency for financial institutions in Oman, enabling them to offer a more seamless and streamlined banking experience.

One of the key focus areas has been digital payments, with an aim to enhance the efficiency and convenience of transactions. The introduction of electronic payment systems, such as the OmanNet and Mobile Wallet services, has facilitated real-time and secure fund transfers between individuals and businesses. These payment systems have reduced reliance on cash transactions and promoted digital payment methods, including debit and credit cards, mobile wallets, and online fund transfers.

Digital payments in Oman have grown rapidly in recent years and total transaction value was USD 6.7 billion in 2022. The industry is expected to continue its growth momentum reaching USD 14.1 billion by 2027 at an impressive annual growth rate of 16.4%. This growth will be driven by the increasing popularity of mobile Point of Sale (PoS) payments, which are expected to dominate the market and comprise over 60% of total transactions by 2027, a significant jump from just 2% in 2017.

Oman’s FinTech ecosystem is in its early stages but is gradually developing with a strong focus on economic diversification and digital transformation, driven by initiatives like Oman Vision 2040. In addition to this, the country’s high digital connectivity and young demographic provide a favourable environment for FinTech adoption.

The Central Bank of Oman is actively working on initiatives such as open banking, FinTech regulation, and a regulatory sandbox. The economic landscape and governance model is conducive to FinTech growth and encourages collaboration between banks and FinTech firms with investments being made to modernize the banking sector. The Oman Technology Fund (OTF) is playing a crucial role in enabling and empowering FinTechs through funding and mentorship programs.

Islamic banking has outpaced conventional banking in Oman, thanks to the relatively recent adoption of digital Islamic finance solutions, including digital banking platforms, Shariah-compliant digital payments, online investments and wealth management, and digital wallets with Zakat calculation. Islamic banking assets in Oman have grown at a much faster rate of 11.0% over 2017 - 2022, compared to only 3.3% for conventional banking assets. And with the convenience offered by digitalization, Islamic banking is poised to represent a larger slice of the Omani banking pie going forward.

Overall, Oman’s banking sector has embraced digital transformation, witnessed the emergence of a developing FinTech ecosystem, and experienced growth in Islamic banking. These advancements contribute to the country’s economic development, enhance financial inclusion, and provide customers with a more seamless and diversified banking experience.

The Cedar-IBSi NextGen Banking & Technology Summit explores this growing influence of digital technologies on the Omani banking industry, with perspectives drawn from industry experts across global and regional banks and technology players.

To achieve Oman’s Vision 2040 of creating a productive and diversified economy through innovation, Omani
banks must gain more momentum in their digitization efforts. Banks should explore NextGen tech solutions to
improve customer experience, operational efficiency, and expand their reach. How can banks in Oman leverage
global and regional learnings to accelerate their digital transformation?

Banks and FinTechs must collaborate proactively to create innovative financial services and product offerings.
FinTechs can leverage the regulatory expertise and infrastructure of banks, while at the same time banking
institutions can harness and adapt FinTech technological advancement. FinTechs can also vastly benefit from
the sandbox framework and other Central Bank of Oman initiatives. How can banks and FinTechs foster strong
partnerships?

The GCC banking sector is evolving to meet dynamic customer demands for secure, real-time digital payments,
spanning B2C and B2B transactions. Oman’s National Payment System simplifies digital payments, enhancing
the shift to a cashless economy. To leverage this, how can banks and payment providers strengthen B2B payment
solutions while augmenting transaction banking services, streamlining financial operations and boosting
efficiency for GCC businesses?

With Oman’s Islamic banking sector expected to outpace conventional banking, digital Islamic banking is crucial
for Islamic windows of conventional banks to cater to the needs of an increasingly tech-savvy population. How
can technology further enhance accessibility and compliance in the realm of digital Islamic banking?

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