As we enter an age of tremendous interconnectivity, many banks are keen to digitalize their customer experience, their services and their products, and expand beyond the confines of their traditional bricks-and-mortar service models.
It may be advisable for banks to reassess their disclosure obligations regarding business risks related to the potential impact of Covid-19 within the context of their local regulatory requirements. They should consider whether economic uncertainties and market volatility have affected accounting conclusions, or will do so in the near future. The Central Bank of Oman (CBO) has announced a comprehensive incentive package to inject additional liquidity of more than OMR 8 billion (USD 20.78 billion) into the economy.
Despite the challenges presented by the pandemic, we are seeing an increasing focus on open, connected banking: successful organizations tend to be those that put their customers at the heart of their strategy. The concept of ‘banking the ecosystem’, which is an interconnected set of services where customers can fulfill a variety of needs in a single integrated experience, may represent the cornerstone of digital banking in the future. Banks in Oman are also beginning to embrace blockchain, which offers benefits including operational efficiencies, reduction of intermediary costs, and a culture of transparency, without the traditional potential risk of inaccurate information transfer.
LIBOR’s decommissioning may have a significant impact on business and support functions of financial institutions: worldwide, almost USD 400 trillion worth of contracts are linked to LIBOR across the spectrum of financial instruments.
As regulatory bodies advocate cyber security measures as a priority, progressive banks recognize that it is not merely a ‘technology problem’ but a wider business challenge that requires business ownership and strategic development. They often have information-security risk management processes integrated with the enterprise risk management framework. Banks are also using third parties to facilitate technology implementation, in an effort to decrease costs, improve customer experience, and enhance their competitive edge.
Meanwhile, Oman is committed to aligning with international best practices to combat cross-border tax evasion, through “automatic exchange of information” (AEOI) and the “Base Erosion and Profit Shifting” (BEPS) frameworks. In the midst of this wave of regulatory reform, equally important are robust corporate governance and effective talent management.
We believe the future is ripe for both growth and transformation. Banks that effectively leverage their digital assets, bolster cyber resilience and manage third-party risk will likely reap the benefits of increased revenue streams, regulatory compliance and enhanced operational efficiency.