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The Central Bank of Bahrain (CBB) has issued directives on ‘Digital Financial Advice’ – also known as Robo-advice – following an industry consultation process.
For the Bahraini financial services sector, this is ‘yet another important step towards digitalisation’ by harnessing the power of intelligent automation of ‘financial advice’ by the use of algorithms in automated tools that use the logic, approach and methodology applied by traditional financial advisors.
Khalid Hamad, pictured above, executive director of banking supervision, said: “The new rules will enable specialised FinTech firms planning to offer digital financial advice obtain a license to offer such services to investors.
“In addition, banks and investment firms will now be able to introduce such services with approvals from the CBB. The new rules focus on providing safeguards and controls governing the use of algorithms or AI which are embedded in the software programs used in the digital advisory tools.”
“The CBB continues to make steady progress in expanding the scope of role of digital financial services with a view to ensuring customers have access to smart services from banks and financial institutions. These rules are in line with regulatory standards in leading financial centres and will help Bahrain maintain its position as a leading financial hub in the region.”
The rules will be available on the CBB website (www.cbb.gov.bh) in due course.