A statutory body acting as the country’s central bank, Autoriti Monetari Brunei Darussalam (AMBD) was formed after the Autoriti Monetari Brunei Darussalam Order, 2010 commenced in January 2011. AMBD was established to maintain a sustainable financial ecosystem made up of competitive and innovative financial institutions and services.
AMBD undertakes several core functions including the formulation and implementation of monetary policies, regulation and supervision of financial institutions as well as currency management. In an effort to develop a progressive financial services sector towards a smart nation, AMBD launched the Digital Payment Roadmap for Brunei Darussalam 2019-2025 on January 21, 2019.
The roadmap outlines AMBD’s strategies to transform Brunei Darussalam into a “Digital Payment Nation” by 2025 that serves to drive digital transformation in payment services leading to the creation of a safe, sustainable, and efficient digital payment ecosystem, which is fundamental to a digital economy.
One of the key initiatives for this roadmap is to develop a National Payment Hub that promotes interoperability and easy access to consumers and businesses in Brunei. Three key areas have been identified by AMBD to achieve this development.
The first key area requires the evolvement of existing payment regulations to maintain stability in the financial sector and promote collaboration among market players. This will also allow existing financial institutions and prospective payment service providers to improve their financial services in the country.
Secondly, the roadmap aims to involve a greater adoption of digital payment solutions to promote market interoperability and encourage fair market competition. New and innovative technology can lower barriers to adoption and will offer secure and cost-effective payment mechanisms for acceptance of digital payments by merchants.
The last key area of the roadmap involves a collective effort between AMBD and the industry in enhancing public awareness and education, geared towards building digital trust and market confidence towards the acceptance of digital payments. The roadmap represents the third pillar of Brunei’s sustainable financial ecosystem under its Financial Sector Blueprint 2016-2025.
In it, the roadmap serves to help provide a focal point for financial services activity that will support the Government’s efforts to catalyse a cluster process of various services and facilitate business activity.
One of the highlighted topics in the Financial Sector Blueprint 2016-2025 is Information Communications Technology (ICT). According to statistics from the Authority for Infocommunications Technology Industry (AITI), Bruneians are becoming progressively more connected with increasing subscriptions for fixed broadband and mobile Internet.
To further develop the ICT industry, AITI has implemented various initiatives encompassing areas such as accreditation, financial assistance, promoting innovation and creativity through local and international competitions. These initiatives, combined with having tech-savvy citizens, will help achieve AITI’s vision of producing a vibrant and sustainable ICT industry.
ICT also plays an important role in the customeroriented financial services industry. As the ICT industry grows, financial institutions can operate more efficiently and effectively, providing customers with greater convenience. The ease and benefits of ICT far outweigh those of the conventional paper-based processes.
Following the digital growth in Brunei over the years, paper ledgers have been replaced with electronic records, and payments are increasingly being made through online platforms. Rather than visiting financial institutions’ branch premises or even ATMs, customers manage their finance on the Internet with their smartphones.
As such, AMBD has implemented policies to help lay the foundation for modernising payment arrangements in Brunei. In November 2014, AMBD implemented the Real-Time Gross Settlement System (RTGS), an inter-bank funds transfer system for large and urgent payments.
The system allows banks to transfer funds for themselves and on behalf of customers in real time. Meanwhile, the linked Automatic Clearing House (ACH) which went live in May 2016 enables electronic clearing of cheques to replace the manual cheque processing system and enables other electronic payments.
These policies’ direction serves to complete the automated clearing house and thereafter an interbank retail payments infrastructure.
This helps in providing Brunei Darussalam with a modern payment system, enabling reduction in the use of paper-based payment instruments, notably cheques. AMBD and the Brunei government can then provide a lead in transitioning their own payments from paperbased to electronic payments, which is one of the directions outlined in the Financial Sector Blueprint 2016-2025.
With increased focus on ICT, there is a necessity for risk management. Among the priorities taken includes enhancing cyber-security.
In December 2015, AMBD issued ICT Risk Management Guidelines to banks and finance companies. The guidelines provide a comprehensive guidance to financial institutions on managing the risks associated with technology-based systems and practices, and on the relevant internationally recognised standards.
Copyright 2019 Borneo Bulletin Yearbook 2019 All rights reserved.