With steady steps, the Central Bank continues to implement the banking reform strategy, one of the main objectives of which is to achieve digital transformation in the banking sector, which the Central Bank began in 2017 with clear stages included in its first, second and third strategies.
During the past two years, cooperation between the government, with the personal support and follow-up of the Prime Minister, and the Central Bank was a fundamental step to activate and accelerate the transformation to digital government and the transition from a cash economy to a digital economy, focusing on developing payments within Iraq and using technology to improve financial inclusion, developing information technology, establishing digital banks, using artificial intelligence in banking services, and using modern technologies in loans, compliance, risk management, combating money laundering and terrorist financing, and combating banking fraud.
The results during 2023 and 2024 recorded a qualitative leap in the volume of transactions in electronic payment operations and the use of modern banking technologies.
The rate of digital transformation and electronic payment increased to 48.5% compared to 20% in the past years. This is an indicator that confirms the success of the plans and procedures adopted to achieve a major transformation with a distinguished national effort for digital transformation and electronic payment. This joint effort by the cadres of the Central Bank, the government, banks and electronic payment companies has clearly contributed to having an advanced infrastructure to implement and accommodate electronic payment tools and various financial services.
The banking reform has now entered the phase of transformation to digital banks, and the Central Bank is currently examining and auditing about 70 requests to license new digital banks according to the precise controls and conditions adopted by the Central Bank. This constitutes a real and promising start for technical banking development in Iraq, bridging the technical gap with the countries of the world in this field. This facilitates the provision of smart banking services, reduces the chances of fraud and corruption, and provides important data on the nature of transactions, their control, and compliance.
Therefore, digital banks are a new stage of digital transformation and banking reform. We hope that the Central Bank will soon take the first step by licensing digital banks that show, through examination, audit and study, that they are committed to the applicable controls and conditions.
