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EghtesadOnline: The Central Bank of Iran is expected to announce its regulatory framework for fintechs in the coming months and according to the regulator's deputy for innovative technologies, European standards are being eyed as the ideal benchmark.

"Implementing European regulations such as PSD2 will require legal support [from CBI] and our ideal standard is to match the European Union framework and notify this as a regulation to the banks," Nasser Hakimi also told IBENA.

PSD2 (payment services directive) is an EU directive administered by the European Commission, EU's executive Cabinet, to regulate payment services and payment service providers throughout the EU and European Economic Area for boosting competition and increasing participation in the payment industry by non-banks.

Hakimi noted that banks will be prohibited from limiting consumers' access in any way as per the envisioned regulations and will be more customer-oriented by tailoring their services to actual needs, according to Financial Tribune. 

"This is being followed up at CBI but making it stick in Iran will be difficult, in view of the current culture," he added.

As to the future of fintechs in Iran, the official believes that if the market is allowed to take its natural course, "fintechs will overcome banks in connecting with customers" as they will be able to offer a variety of solutions that will undercut customers' direct contact with the banks.

But CBI also sees several scenarios that could go off the natural course. For instance, if banks feel seriously threatened and create hurdles for free access to resources such as APIs, or try to create a sort of monopoly for their affiliated fintechs, it would limit access for the average consumer and help create a multilateral monopoly.

"The third thing that is significant in my opinion is if a security problem emerges in one or several fintech startups. As regulators are risk averse to a certain extent, which is of course natural in monetary and fiscal systems, the whole issue could face denial and resistance," he said.

Mohammad Gorkaninejad, CBI's senior advisor on information technology, also believes that fintechs will increase pressure on banks to upgrade their services and will force them to overhaul their revenue stream to survive.

"Each senior executive in the banking and payment industry needs to come up with serious answers for a variety of issues that will change their business models during the current year because if they don't have a clear plan this year, their current business model will fail next year," he said. 

CBI's fourth regulatory framework dealing with personal finance management and electronic wallet fintechs, also due in the coming months, is part of a six-part overarching vision to be completed by the end of the current fiscal year in March 2019.


Central Bank of Iran Iran Fintechs European Fintech Standards Iran Fintech Standards