The Central Bank of Cyprus has rolled out a tender for a state-of-the-art digital platform dedicated to customer compliance, as confirmed by CBC Governor, Constantinos Herodotou, during a function spearheaded by the Association of Cyprus Electronic Money and Payment Institutions.

Herodotou outlined the Bank's commitment to digital transformation in the financial sector, emphasizing the aim to foster an efficient financial ecosystem and bolster the economy. The results of the tender will be disclosed shortly.

The Governor illustrated the platform's phased implementation:

Phase one: Develop a system enabling financial institutions to register customers and update their data remotely, enhancing user experience and eliminating the need for in-person visits.

Phase two: Focuses on interconnectivity, streamlining the KYC process by connecting with utilities and government services for accurate data verification.

Phase three: Aims at seamless data sharing among institutions for customer updates or Anti-Money Laundering (AML) considerations, potentially minimizing customer involvement.

Discussing the evolving financial technology landscape, Herodotou emphasized the symbiotic relationship between traditional banks and FinTech enterprises. The combination of established networks and regulatory acumen of traditional banking with FinTech's agility is reshaping the industry. While the CBC encourages digital innovation, it remains vigilant to ensure emerging risks are managed effectively.

Highlighting the impacts of digital transformation, Herodotou acknowledged the Eurosystem's proactive stance on promoting instant payments and contemplating the rollout of a digital euro.

He further elucidated the advancements in instant payment solutions in the EU, with statistics indicating its rapid uptake, accounting for nearly 15% of total credit transfer volume. Although mainstream Cyprus banks haven't yet incorporated instant payments, several CBC-regulated Electronic Money Institutions (EMIs) and Payment Institutions (PIs) offer such services.

On the topic of the digital euro, he foresaw its role as a supplementary tool alongside physical currency. Both banks and alternative service providers anticipate active participation in the distribution of this novel currency format.

Shedding light on the Cyprus market, the Governor pointed to the exponential rise in Payment and Electronic Money Institutions. Despite the robust presence of these institutions, there's an apparent surge in license applications, with the CBC currently examining 33 potential licenses.

Patrick Papsdorf from the European Central Bank presented compelling data, underscoring the evolving payment landscape in the EU. Non-cash transactions have surged to 114.2 billion, amounting to €197 trillion. Interestingly, card payments at POS in Cyprus are dominantly contactless, reaching a staggering 84%.

Ioannis Georgoulas, Chairman of the Association of Cyprus Electronic Money and Payment Institutions, accentuated the transformative potential of digital payments. He recognized them as more than a mere technological advancement, emphasizing their role in shaping a future that is inclusive, efficient, and sustainable.