Regulatory Frameworks: Balancing Security and Innovation in Electronic Finance Across Gulf Cooperation Council Markets

The purpose of this chapter is to examine the electronic finance (e-finance) regulatory framework implemented by the regulators in Gulf Cooperation Council (GCC) countries. In particular, the focus of current chapter is on the frameworks that govern the e-finance sector and the challenges of congruent innovation with security. The countries of GCC regions have witnessed unprecedented improvements in operational efficiencies, increase in financial inclusion, and overall economic growth due to rapid advancement in digital financial services. The existing digital financial services cover digital payments, online banking, and Fintech solutions to financial problems in GCC countries. However, these advancements in the form of electronic finances (e-finances) have also introduced the economies of GCC with the complex regulator challenges including but not limited to cybersecurity issues, data privacy concerns, and hurdles in getting licensing for e-finance providers. Hence, in addition, the current chapter also sheds light on the regulators’ responses to these challenges in the form of applying blend domestic regulations, regional initiatives, and international standards in GCC regions. From the existing studies, we identified that proportionate regulations, dynamic supervisions, and collaborative governance are the significant regulatory approaches adopted by the regulators in these countries. These approaches aim to nurture innovations along with ensuring the stability and integrity of e-finance systems that highlight the efforts of regulators in GCC regions to create a balanced regulatory environment that supports both growth and security.