DOHA: Blockchain technologies have the potential to revolutionise the rapidly growing financial services sector in Qatar and the broader GCC region, according to a new report from Booz Allen Hamilton.
The global consulting and technology firm outlines how the technology could have many useful applications, including in retail payments infrastructure, remittances, trade finance and syndicated loans, capital markets, and compliance activities such as Know Your Customer (KYC), benefitting both the financial sector and consumers.
Qatar has recently been ranked as the most competitive economy in the Middle East by IMD World Competitiveness Central. Recent developments including the implementation of the Basel III regulations’ agenda, enhancing foreign participation in the stock market, establishing specific zones for foreign investors, and ensuring strong transparency procedures along with the establishment of Qatar as the first regional Renminbi clearing centre will play an important role in developing the financial sector of Qatar.
Booz Allen Hamilton identifies a number of specific opportunities in Qatar’s financial services sector to shape and drive blockchain adoption.
Lutfi Zakhour (pictured), Senior Vice President, Booz Allen Hamilton MENA, believes that it is imperative for commercial banks to actively look to embrace blockchain: “The digital economy is moving so rapidly that adopting a ‘wait and see’ approach is not advisable. Our report shows that there are a number of very real opportunities that will provide genuine long-term benefits. We are seeing significant momentum now at the global level which means that GCC institutions need to start planning the most effective ways to engage and implement blockchain solutions into their future business operating models.” The report identifies a number of key areas of finance that blockchain has the potential to revolutionise in the GCC, including retail payments infrastructure.
Introducing blockchain will speed up transactions and reduce costs, provide near instantaneous clearing and settlement, and manage complete transaction records, which would boost the accuracy of data and allow for improved monitoring by regulators.
GCC countries account for an estimated $98bn in annual outward remittance flows which are likely to continue to grow given the high percentage of migrant workers. However, transaction costs and time are relatively high, reflecting the complexity of the clearing and settlement chain. Blockchain application could potentially reduce this complexity.
