The Central Bank of Bahrain (CBB) has announced two entrants into its regulatory sandbox. Tramonex, a London-based foreign exchange (forex) cash management solution for businesses; and NOW Money, a Dubai-based account and remittance service for low-income workers in the GCC.
The announcement is the latest move by Manama to develop fintech in Bahrain. In mid-June, the CBB announced new legislation to create a regulatory sandbox that will allow start-ups and financial technology (fintech) firms to test and develop their banking ideas and solutions.
The sandbox provides a virtual space for companies to test their technology-based innovative solutions, and is open to existing CBB licencees and other local and foreign firms. The testing duration is nine months, with a maximum extension of three months.
Tramonex offers an efficient, quick and cheaper way of processing and transferring funds in multiple currencies. The start-up focuses on facilitating conversion and settlement services to automate cross-border transactions, and provides competitive services.
NOW Money is the first fintech company in the Gulf region to use mobile banking technology to provide accounts and a range of low-cost remittance options to low-income workers. It aims to provide access to affordable financial services for everyone.
The Bahrain Economic Development Board (EDB) assisted and advised Tramonex and NOW Money in registering for the regulatory sandbox.
Khalid al-Rumaihi, CEO of EDB, says more initiatives to support fintech will be launched soon. In addition to the development of the regulatory sandbox, we have a number of further initiatives we expect to be launched in the coming months, including a venture capital fund-of-funds, he says. We are seeing real signs of momentum in the sector and are excited by the potential it will bring.
Banking industry prepared to take on fintech disruption
Khalid al-Rumaihi, Bahrain Economic Development Board
Manama is willing to accept the risks that financial technology brings so that the industry can grow
For all industries, new technologies bring fresh challenges that threaten existing players. For the financial services sector, Bahrain is aware of the risks that financial technology (fintech) brings, but is prepared to accept the disruption that inevitably lies ahead.
We are going to disrupt, we are going to open it up, allow our banks to be disrupted by new entrants, and we believe that is the only way to go, says Khalid al-Rumaihi, CEO of Bahrains Economic Development Board (EDB).
We did it in telecoms many years ago, when we allowed new entrants to come in and compete with Batelco [Bahrain Telecommunications Company]. We were the first country [in the region] to do that because of the vision of the crown prince was that competition means lower prices for consumers and enables the industry to become more innovative. Even if our income loses its margins, the industry and the country benefits. He has been proven right with telecoms, and we have the same view with financial services. Read more