Largest Banking Event Promises Bigger Role to Digital Economy

Tehran’s iconic Milad Tower on Monday hosted the largest banking event of the year, which whole-heartedly supported financial technology and innovative solutions to succor an economy centered on a besieged banking system in dire need of reforms.

The Seventh Conference on Electronic Banking and Payment Systems was opened by Ali Divandari, director of the Monetary and Banking Research Institute—the entity in charge of organizing the major event.

A large number of high-level officials, industry players and local and foreign experts are attending the annual event.

Divandari focused on the ever-increasing importance of fintechs and the boons they bring for consumers, as they change the traditional ambience of the banks. “This year’s conference is focused on promoting innovation and optimizing efficiency in financial businesses,” he said.

Governor of the Central Bank of Iran Valiollah Seif was up next and mainly spoke of the inevitability of financial technology and blockchain innovation. He called on bank executives and board members to develop a comprehensive understanding of the subject.

Communications Minister Mohammad Javad Azari Jahromi was another top-tier figure who warned against the detrimental effects of monopoly in payment systems on market expansion, called for financing fledgling businesses and stressed the administration’s commitment to combating digital and cyber fraud.

“We have drafted the strategic blueprint of digital economy in collaboration with the ministries of economy and industries, as well as the central bank, which will be submitted to the parliament in a month,” he announced.

Jahromi vowed to grant digital economy a bigger role in the government’s plans for the fiscal 2018-19 that begins on March 21.

Before the officials convened a panel presided by Divandari, two business representatives, namely Mohammad Mehdi Sadeq, chief executive of Bank Melli’s Sadad Informatics Corps, and Milad Jahandar, secretary of Iran’s Fitnech Association, addressed the packed conference hall.

Sadeq outlined the six major challenges facing the Iranian payment industry, but Jahandari, who is also the founder of payment app Bahamta, was more confrontational in terms of what ails the fintechs.

“We are not seen and recognized,” he emphasized, and called on the telecoms minister to put a stop to the filtering of online businesses as their whole livelihood is disrupted.

Jahromi conceded that online businesses have on occasion found themselves between a rock and a hard place when the judiciary voted to block their activities.

That usually happens when startups are asked to hand in their entire databases for fear of possible criminal wrongdoing by people employing their services, but they naturally decline as their entire competitive advantage rests on that information.

Online businesses were also outraged recently when social media channels were blocked and Internet disconnection reigned for close to two weeks after protests broke out in numerous Iranian cities.

The minister vowed that the issue will continue to pale in significance, as the administration pursues regulatory changes and constructive dialogue.

  Central Bank, Digital Banking and Fintechs

Also addressing the conference, CEO of Informatics Services Corporation Seyyed Aboutaleb Najafi urged banks to pick up pace in offering innovative services to stay relevant.

He was followed by Enrico Lucchinetti, leader of European banking practice at Italy’s McKinsey & Company who reviewed progress in Europe’s digital banking and potentials in Iran.

The keynote speaker of this section, however, was Nasser Hakimi, the head of CBI’s Innovative Technologies Department, who outlined the policies of the monetary regulator in financial innovation and technology.

He noted that the central bank has envisioned six documents in three phases, which will provide “regulatory frameworks” rather than rigid regulations to make its stance on fintechs and crpytocurrencies transparent.

Two of them dealing with payment initiators and facilitators have already been published and the rest are to be publicly disclosed by the end of next year’s second quarter on Sept. 22 using active feedback from industry players.

Hakimi emphasized that the central bank will not directly exert oversight on fintechs and, as part of its novel outsourcing approach, has bestowed banks with the leeway to decide their relationship with fintechs on a variety of levels.

The annual conference, which also featured an exhibition wherein a host of banks and fintechs established small pavilions, had a number of other roundtable discussions on Europay, Mastercard and Visa technology, open banking and conformity to international standards.

Banking supervision, confidentiality of information, automation systems, anti-money laundering and combating the financing of terrorism laws and global banking trends were also discussed and scientific research articles were presented.

Various workshops were also held on the sidelines of the two-day event.