Kuwait Finance House (KFH), one of the largest Islamic banks in the world, has introduced a Shariah compliant digital bank, said to be the first in the State.
The new initiative, known as Tam Digital Bank, is part of KFH’s strategy to capture Kuwait’s growing youth population. The youth is a segment that commands more than half of the country’s 4.25 million population: data from the Public Authority for Civil Information puts individuals aged 24 years and under at about 51.8% as at the end of June 2022.
“Tam Digital Bank has been set up as a result of various factors, including KFH’s unprecedented digital transformation strategy and its cutting-edge infrastructure. These factors are particularly important as digitization has become deeply ingrained in Kuwaiti youth and society as a whole,” explained KFH Acting Group CEO Abdulwahab Iesa Al Rushood.
Currently Tam’s services include account opening, remittance, expenses tracker and a prepaid card. The banking app is only open to Kuwaiti citizens of at least 15 years of age.
Like many of its peers, KFH, which held KWD37.07 billion (US$119.75 billion) in assets as at the 30th September 2023, has been making a stronger digital play, identifying fintech innovation as one of its three strategic growth priorities. Apart from digitalizing existing products, services and processes, it is also in the process of converting the Kuwaiti subsidiary of Ahli United Bank (AUB) – a Bahraini conventional lender it acquired for about US$11.6 billion in October last year – into a digital bank, as requested by the Central Bank of Kuwait (CBK).
CBK’s instructions also reflect Kuwait’s digital ambitions to place itself as a regional hub for finance. The regulator in February last year published its digital banking framework which outlines three types of digital bank models: a unit within a traditional bank; a standalone digital bank; or as a partnership between a traditional bank and a digital institution.