Financial Crime World

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Cyber-Risk Threat Looms Over Oman’s Financial Sector as Digital Transformation Gains Momentum

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The Central Bank of Oman (CBO) has issued a warning that the country’s financial sector, while having avoided any major cyber-attacks in recent years, remains vulnerable to such risks. This comes as Oman continues to adopt fintech and electronic payment systems as part of its digital transformation drive.

The Growing Risk of Cyber-Attacks

According to the CBO’s Financial Stability Report 2023, there was a staggering 46 percent spike in cyber-attacks targeting financial institutions globally in 2022 compared to the previous year. This surge highlights the banking and financial industry’s appeal to international cyber gangs seeking huge rewards from successful attacks.

Impact on Customer Trust

The renewed surge in cyber-attacks could negatively impact customer trust in digital financial services and the financial sector as a whole, warns the CBO.

Oman’s Financial Sector Remains Vulnerable

While Oman has not experienced any significant disruptions from cyber risks in recent times, the CBO stressed that like any other jurisdiction, the Omani financial sector is vulnerable to such risks. Therefore, cyber-security remains a top strategic priority for the apex bank.

Digital Transformation Drive

The growth in e-payment options has been driven by the trend that first gained major traction during the Covid-19 pandemic. To meet soaring demand for e-payment solutions, the Central Bank announced the launch of a new Real Time Gross Settlement System (RTGS) which enables seamless and around-the-clock processing and settlement of high-value payments exchanged between market participants.

Key Statistics

  • The volume of transactions processed by the CBO’s Payment and Settlement Systems (PSS) climbed 37.6 percent to 275.1 million transactions in 2022.
  • The aggregate value of these transactions jumped 15.6 percent to RO 206.6 billion in 2022.
  • Retail payments made via digital channels also ballooned 37.8 percent to 274.4 million in 2022.

Conclusion

In concluding, the Central Bank pledged to stay vigilant in the face of cyber-attack risks even as it weighs the roll-out of new digital products, notably Central Bank Digital Currencies (CBDCs). A task force has been commissioned to study the introduction of CBDCs, while separate groups are focused on other digital innovations.

Commitment to Cyber-Security

The CBO’s proactive approach allows the bank to equip itself with the expertise required to navigate the evolving landscape of digital finance and stay prepared to take appropriate action when necessary.