Iranian Bank Makes Foray Into Fintech Sector

EghtesadOnline: To claim a share of Iran’s growing fintech market, Bank Mellat has launched an innovation center to help promote the application of smart technologies in banking.

News ID: ۷۴۶۴۷۸

14 January 2019

‘Polwinno’ will offer startups training courses about minor electronic transactions, mobile banking, e-wallets, financial services, e-commerce, artificial intelligence and how to employ the Internet of Things  in the banking sector.

Inaugurated on Saturday, the center will assist domestic fintechs while gradually overhauling the local banking industry by promoting the application of modern technologies, local news website Peivast reported.

The center is managed by Bank Mellat IT holding, registered as Fanavaran Houshmand Behsazan Farda, Financial Tribune reported.

Mohammad Shalbaf, the holding’s deputy director says, “In the past two months we have been selecting prominent teams and are training them. Hopefully, we’ll be able to draw on their skills and capabilities in modernizing banking services.”

The center has been founded to help provide secure and modern services in banking and finance.

With support from the government of President Hassan Rouhani, fintechs and knowledge-based companies have been improving and expanding and are gradually making their presence known in a variety of socioeconomic realms.

Legal Framework

The Central Bank of Iran in October 2017 published a document on rules related to the work of fintechs. The CBI has made clear that it will neither establish a new institution for supervising fintechs nor issue licenses for the operation of financial services providers. Instead, it would “delegate the responsibility to authorized financial institutions.”

In the new model, the CBI defined roles and regulatory frameworks without getting directly involved in the process of authorizing innovative financial services.

“Fintechs will be linked to the financial system through authorized financial institutions … Risks will be included in the institutions’ total risks based on a partnership agreement … In return, financial institutions will benefit from [fintechs’] high potential in developing innovative services, attract new customers and boost sales,” the document published on the CBI website states.

Banks and financial institutions can outsource their operations to innovative companies. However, they alone are responsible for customer data and will be held accountable if and when there are complaints about fraud, abuse or data leak.