Interview: Yasmeen Al Sharaf, head of fintech and innovation unit, Central Bank of Bahrain

Yasmeen Al Sharaf heads up financial technology strategy at Bahrain’s central bank, which is on a mission to grow and diversify the sector in the Middle East island state

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Yasmeen Al Sharaf graduated from the University of Bahrain with a BSc in banking and finance, and now runs the department focused on developing financial technology (fintech) at Bahrain’s financial regulator, the Central Bank of Bahrain (CBB).

During her 14 years at the CBB, Al Sharaf has held several roles, including one that that involved licensing research and development, where she came into contact with financial services firms trying to set up in Bahrain.

She now heads up the CBB’s fintech and innovation unit. The bank is pro-innovation and encourages the development of fintech, and has tasked the unit with establishing an ecosystem in a role that includes overseeing and supervising the CBB’s regulatory sandbox.

Al Sharaf says fintech is important to Bahrain because it reduces the country’s economic dependency on oil and gas. “In recent years, Bahrain has expended significant resources on diversifying away from a previous focus on hydrocarbons,” she says.

Bahrain already had a good reputation in the Gulf region for financial services and quickly realised that if it did not keep pace with the digital revolution in the sector, this reputation could diminish.

“Fintech is proving to be a powerful force in transforming the customer experience, and is working to pose a direct challenge to often outdated business practices,” says Al Sharaf. “The power and legacy of the traditional banking firms are being challenged by the continuous innovation, scalability and market responsiveness of new fintech companies.”

Back in 2017, the central bank stepped up its fintech activity by establishing the region’s first onshore regulatory sandbox. This provided a virtual space for companies to test their tech-based financial products in the Bahraini market with what Al Sharaf describes as “a relatively risk-free opportunity for national and international companies”.

The CBB has recently had its first graduates from the sandbox. These include Rain, the region’s first Sharia-compliant cryptocurrency exchange, which has obtained a full operational licence.

But there is much more to come from Bahrain in terms of regional and even international fintechs. The arrival of Amazon Web Services (AWS) in Bahrain in 2017 supports existing fintechs in the country and is attracting others from overseas by offering greater connectivity and lower latency. This was the first AWS zone in the Middle East.

Read more about Bahrain’s tech sector

But Bahrain’s ambitions go further afield and the nation is already looking to work globally, said Al Sharaf. For example, the CBB and the Monetary Authority of Singapore signed a memorandum of understanding in November 2018, and the Bahrain Economic Development Board signed one with the government of Maharashtra, India, in 2018 and with Digital Jersey recently.

The CBB is also one of 16 global regulators that are members of the Global Financial Innovation Network, which is working to design and implement a global pilot programme for fintechs to develop new products and services.

“This is the direction in which we see our role progressing in the global fintech market – participating in global forums, discussions and joint policy work to collaborate and further develop ideas within the financial services sector,” says Al Sharaf.

Attracting investment into Bahrain, including fintech startups, is being supported by the Bahrain Economic Development Board. Speaking to Computer Weekly at a recent event in London, Dalal Buhejji, senior manager financial services at the organisation, said Bahrain can be a gateway to the Gulf Cooperation Council (GCC) region for fintechs.

“Some fintechs can’t get going in their home regions because of market saturation and decide to take it into the GCC, with Bahrain a good starting point,” said Buhejji. “We want fintechs that want to expand in the GCC region to come and test out their products in the Bahrain Central Bank regulatory sandbox.”

Bringing in companies from other countries will increase diversity, which is something Bahrain has prioritised.

Growing proportion of women in financial services

Buhejji and Al Sharaf both demonstrate Bahrain’s success in increasing the proportion of women in industries such as financial services.

Al Sharaf says: “It is widely acknowledged that, when it comes to the societal role of women, Bahrain is one of the most forward-thinking and liberal countries in the Middle East.”

According to an annual survey conducted by the CBB, the number of Bahraini women working in the financial services sector increased by 2.2% last year, reaching 3,621, while the proportion of women holding managerial positions increased to 33.2% in financial services sector.

But more can always be done, says Al Sharaf. “I would argue that there is always room for further progression in bridging gender gaps and normalising the involvement of women in traditionally male-dominated sectors,” she says.

In Bahrain, as in other countries, it is often women who bear the burden on their careers when they become a parent, says Al Sharaf. “It is often mothers who, in order to combat the challenges of childcare, lose out on opportunities in the workplace, be that because of a decision to change to a role that offers increased flexibility, or even a decision to leave work altogether,” she says. “This is something that needs to be addressed.”

Bahrain is taking positive steps to address issues of inequality. The country’s Women in Fintech initiative, started in 2018, is a network of professional women involved in the financial services sector. “The goal is to showcase women that others can aspire to and look up to,” says Al Sharaf. “Looking forward, it is networks like these that could really make a difference.”

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