Aiming to enhance the banking environment in the country in line with the ongoing development of payment systems, the Central Bank of Kuwait (CBK) has launched the Kuwait Automated Settlement System for Inter-participant Payments (KASSIP), the CBK Governor Dr. Mohammad Y. Al-Hashel stated.
This was one of a series of projects geared to entrench financial stability in the country through an integrated network of electronic payment systems at par with international standards and criteria in the field of payments and settlement, Al-Hashel added.
The Governor noted that all stages of implementing the system, conducting final assessments and tests, and training of concerned CBK and local banks’ staff had been completed as part of the ongoing development of the payments systems’ infrastructure in the State of Kuwait. Such projects fall within continuous CBK efforts to provide a safe and secure technical environment.
In terms of specific enhancements, Dr. Al-Hashel said the new system is at par with a new generation of auto-settlement systems and complies with international standards such as the ISO20022 related to Financial and Payment Messages, and the Bank of International Settlements’ Principles for Financial Market Infrastructures (PFMIs). It also employs the best practices in payment systems.
The new KASSIP system offers several advantages related to ensuring the security and smoothness of payment and settlement transactions and to liquidity management. It also allows banks to issue reports on and monitor payment settlements through a designated electronic platform. Furthermore, the new system enables all local payment and transfer transactions among banks operating in Kuwait and to customers’ accounts to go through within seconds, and also enables instantaneous settlement of banks’ daily balances. The update lays the ground for future expansions geared to integration with other payment systems at a greater and more flexible level.
The Governor stressed that the new system comes with high-security standards, creating a technical environment that allows the exchange of payment messages using the latest encryption technology and standards. It also comes with doubled efficiency in terms of the number of transactions and speed of transaction execution. Additionally, it uses CBK’s secure Virtual Private Networks (VPN) as the main communications tool, thus increasing the safety and security of payments while dramatically reducing the overall cost of exchange of payment messages, as opposed to the previous system of using the SWIFT network.
In conclusion, Dr. Al-Hashel reiterated CBK’s keenness on continuously developing and updating the infrastructure of payment systems and developing an environment conducive to the growth of the digital economy while keeping to the highest standards of efficiency and security.