What if Oman could unlock its full economic potential by embracing financial technology (fintech)? With a thriving fintech ecosystem, Oman has the opportunity to revolutionize its financial landscape, driving financial inclusion, empowering businesses, and accelerating economic growth.
Oman’s Backdrop
One of the biggest policy bottlenecks is modern financial mechanisms, urging investment firms to register in jurisdictions that allow for more favourable financial tools. In March 2022, the Capital Market Authority approved the licensing of Oman’s first global crowdfunding platform operator. In January 2024, under the leadership of Chairman H.E. Sheikh Abdul Malik bin Abdullah Al Khalili, the State Council convened to discuss the Draft Law on the Protection of Bank Deposits. This legislation is considered crucial for upholding confidence in Oman's banking system and strengthening the country’s overall financial stability.
Other than policy efforts in the finance sector, the Central Bank of Oman (CBO) has led notable efforts, intending to support entrepreneurs, investors, and citizens. These include promoting digital payments and fostering innovation through mobile payment services, licensing payment service providers, and advocating for financial technologies to enhance the digital market. Additionally, the CBO has facilitated platforms for digital payment processing and waived transaction fees during the COVID-19 pandemic to support the community.
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Introducing a new dynamic for competitiveness, the National Payment Systems, the fintech regulatory sandbox, the open banking strategy, the fintech-specialized education programs, and the National eKYC Platform are among the significant financial technology developments led by the CBO.
Launched in December 2020, the Central Bank of Oman issued and launched the Fintech Regulatory Sandbox Framework to enable applicants from both licensed and non-licensed institutions to test their proposed fintech solutions live by providing a temporary regulatory exemption for fintech-ready products.
Moreover, in 2022, the Central Bank of Oman (CBO) forged various partnerships to advance fintech education. Collaborating with the College of Banking and Financial Studies (CBFS), they introduced the Fintech Professional Diploma. Additionally, they teamed up with Sultan Qaboos University (SQU) to develop a curriculum centered on financial innovation and technology.
Oman Fintech Ecosystem Development
The country’s ‘Fintech Framework and Roadmap’, envisions the growth of a dynamic digital financial ecosystem that fosters tech-based innovation, aiming to drive competition and diversification in the banking and financial services industry in Oman.
The CBO declared its overarching aim: to introduce new facilitators and corresponding regulatory frameworks that respond to market demands and advancements. Additionally, the CBO aims to bolster the factors influencing the emerging technological innovations within the local financial sector. This initiative is set to usher in a new era of innovative banking and financial services.
The development of the Oman fintech ecosystem has been prioritized with suitable steps taken to promote vibrant, inclusive, safe and efficient digital financial products and services across the Sultanate.
Several enabling factors contribute to the promising fintech landscape in Oman, including a strong and resilient banking sector, political stability, robust payment platforms and infrastructure, and a significant youth demographic.
The CBO report highlighted the importance of not only implementing dynamic laws and regulations but also employing a national pool of skilled and innovation-focused individuals within the fintech ecosystem. Furthermore, there's an emphasis on fostering collaboration between academia and the fintech sector, with a long-term objective of bolstering the investment attractiveness of Oman's fintech industry.
In harmony with Oman’s Vision 2040, the envisioned fintech ecosystem holds significant promise in ensuring fiscal sustainability and motivating economic diversification. In particular, it is poised to facilitate the expansion of SMEs and ignite innovation-driven entrepreneurship, thus contributing to Oman's economic advancement.
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Digital Payments
Digital payment solutions are growing rapidly, fueling the growth of the fintech sector in Oman. In 2023, the Central Bank of Oman issued guidelines for banks and payment service providers to offer a card tokenization service, allowing customers to register payment cards and applications like Apple Pay and Samsung Pay in Oman.
Several milestones has also driven fintech innovation such as Egypt’s Paymob, which received CBO’s Payment Service Provider (PSP) license, making it the first international fintech company to be fully licensed in the Sultanate. The National Bank of Oman (NBO) has also entered into a strategic partnership with PayMate to transform the B2B payment landscape in the country.
According to a recent study, 65% of Omani retail merchants claimed increased revenue and higher customer footfall following the introduction of digital payments. As Oman forges ahead with its digital commerce agenda, the transformative power of digital payments for Oman’s retail sector is prevalent.
Oman still holds considerable potential for digital commerce, aligning with the government's push towards a cashless agenda. This initiative stands to benefit small businesses and the broader economy.
Telecom in Fintech
The Central Bank of Oman, in collaboration with Omantel, has selected five fintech start-ups, to join its six-month accelerator program dedicated to empowering fintech start-ups through mentorship, training, networking and fundraising support.
Omani telecom providers have effectively implemented contactless transactions via mobile wallets, offering users a safer and more streamlined payment option. Elevating payment convenience, Ooredoo, in collaboration with the National Bank of Oman (NBO), has launched pay+, a cutting-edge mobile wallet. This advancement in contactless transactions, exemplified by Ooredoo's pay+, not only streamlines everyday financial activities but also reflects Ooredoo's dedication to enhancing customers' digital experiences.
The fusion of fintech and telecom in Oman holds great promise due to recent advancements and collaborations. With Oman's high smartphone penetration rate of over 90% and increasing internet connectivity, telecom providers are well-positioned to offer fintech services to a wide audience. This integration allows for innovative financial solutions to reach previously underserved populations, driving financial inclusion and contributing to Oman's economic development.
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