Lebanon's banks trail behind in fintech services

Published February 22nd, 2017 - 09:00 GMT
There is also a need to improve internet connectivity in Lebanon for banks to be able to provide fintech services in an effective way. (Shutterstock)
There is also a need to improve internet connectivity in Lebanon for banks to be able to provide fintech services in an effective way. (Shutterstock)

Banks in Lebanon are falling behind their European counterparts when it comes to providing technological financial services, better known as fintech services, a senior banker said. “Lebanese banks need to standardize the use of fintech as it is the case with European banks,” Farshad Nowshadi, vice president of e-strategy at Saman Bank in Iran, told The Daily Star on the sidelines of ArabNet Beirut 2017.

ArabNet is a yearly event aimed at bringing together corporate executives, entrepreneurs and investors to discuss the latest trends in the digital sector, as well as the opportunities available for companies working in these areas.

Nowshadi, who is also currently part of the venture capital mentoring program at Level 39 in London, explained that in the U.K., for instance, the use of near field communication (NFC) is standardized among all banks; whereas in Lebanon, only Bank Audi has launched such a mobile payment service, “Tap2Pay.”

NFC is a technology that enables two devices to communicate with each other when placed just a few centimeters apart. It’s often used for mobile payment applications.

More and more banks in the U.K. and in Europe have resorted in the past few years to using NFC; in Lebanon, only Bank Audi’s launched, in 2014.

Bank Audi’s objective is to optimize cashless payments with its Tap2Pay contactless payment services in Lebanon and in the region through different devices such as cards, mobiles (for NFC-capable smartphones), stickers (for non-NFC enabled mobiles), watches and bracelets (for the youth).

Nowshadi said that banks in Lebanon need to realize that they are no longer in competition with each other but are in competition with technological providers offering fintech services globally.

“Banks need to cooperate by adopting standard interfaces allowing them to share information in a standardized way,” he said.

He cited the example of applications launched in the U.K. that can access clients’ accounts in more than one bank and then compare the services provided by these banks.

“There are applications, for instance, in the U.K. that look at accounts in Barclays and HSBC and they compare services. If one account is low, for example, these apps transfer funds from Bank 1 to Bank 2,” he said.

Nowshadi explained that the government and the Central Bank are responsible for standardizing these applications while taking care of security threats that come from using these technologies.

Nowshadi also emphasized the need to improve internet connectivity in Lebanon for banks to be able to provide fintech services in an effective way. “I noticed that there is a problem with internet services and people need to have good 4G connection for them to access fintech services properly,” he said.

However, the banker expressed his optimism about Lebanon becoming a gateway to the Arab World in providing fintech services. “I believe that Lebanon has a tremendous ability to achieve this,” he said.

Nowshadi noted that mobile penetration all over the world has led some banks to close a number of branches while providing online banking services to their customers.

He said that HSBC, Barclays and Lloyds announced last year the shutdown of around 500 branches.

“There exists over 5 billion mobile phone users in the world which hugely surpasses the number of credit and debit card owners,” he said, while adding that NFC chips or stickers can be added to mobile phones to make payments simpler and faster.

“The world is moving toward 4G and seamless fast online internet services,” he added.

By Dana Halawi
 

 

 

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