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Bahrain’s financial sector took another big stride towards its digitization goals earlier this week. On Mar 26, 2019, the Central Bank of Bahrain (CBB) issued the directives on “Digital Financial Advice” after a series of extensive discussion with industry stakeholders.

Also called the “Robo-advice”, the new directives will pave the way for the Kingdom’s financial sector to harness the power of intelligent automation of financial advice using sophisticated algorithms.

These algorithms are delivered via automated tools that rely on approach, logic, and methodology deployed by conventional financial advisors.

Explaining the impact of the Robo-advice on the ground, Khalid Hamad, Executive Director of Banking Supervision at CBB, said: “The new rules will enable specialized FinTech firms planning to offer digital financial advice obtain a license to offer such services to investors. In addition, banks and investment firms will now be able to introduce such services with approval from the CBB.”

“The new rules focus on providing safeguards and controls governing the use of algorithms or AI which are embedded in the software programs used in the digital advisory tools,” he added.

The rules will soon be duly specified on CBB’s official website. Meanwhile, the apex bank stated that it is committed to spearheading the ongoing efforts to expand the scope of digital financial services for the benefit of consumers, as well as the businesses in the financial/FinTech industry.