After years of enduring bleak isolation attributable to armed conflict and international sanctions, Syrian banks are faced with the process of rebuilding lost connections with international finances. With an improvement on economic sanctions and restrictions, banks within the Syrian territory have had to come up with ways of modernizing their frameworks, rebuilding confidence and ensuring interoperability with other banks within the international community.
Reconnecting with Global Finance
With Syria now embracing changes due to sanctions being lifted, their banking systems have seen some changes. Syrian banks are rebuilding correspondent banking relations and accessing cross-border payments, trade exchanges, and currency services. The first trade payments ability will restore some liquidity and offer international currency relations and the opportunity to trade.
Digital Transformation Efforts
Investment in automated payments, electronic accounts, and Syrian bank mobile applications will help ease payments. Digital transformation in Syria’s banking economy will facilitate international trading.
Syria’s Strategic Partnership with Mastercard
The Syrian government and Mastercard have signed a Memorandum of Understanding (MoU) regarding the first phase of modernization of the payment systems. Thus, Mastercard will start introducing advanced e-payment systems, including development of payment-infrastructure, issuance of local and international payment cards, and the connection of Syrian banks to international payment systems.
Implications for Financial Inclusion and Integration
The partnership with Mastercard is a turning point after a decade of financial isolation for the country. The partnership has the potential to offer citizens advanced payment systems and to transform local banks to modern, real-time payment systems. Mastercard will accelerate the digital infrastructure of the country and improve the financial and economic connectivity of the Syrian economy to the world.
Challenges and Timing
Implementation of such a scheme will mean that Syrian banks will have to adapt to global card-option standards, manage risks, and strategize on data safeguarding. Complications such as slow full-scale implementation, legacy systems, and remaining external limitations have been and will continue to be the norm, even if the potential is enticing.
Cybersecurity Challenges
Each new digital banking service will create the need for new protective measures. Syrian banks will need to strengthen partnerships with advanced regional IT companies to protect and address system gaps from cyber risks. This is an area where Syrian institutions are far behind.
Future Plans
The Mastercard agreement, while still in need of refinement, demonstrates that there is a real opportunity to replace the recently lifted sanctions with enhanced trade relations. This, along with other contemporary payment innovations, promises to integrate virtual payments infrastructure, modern payments technology, and other commercially available digital services. However, governance, technology, and the political will to modernize will be the key determinants of systemic geopolitical and economic changes. These, along with digital reform, will extend the Mastercard agreement to other trade relations, thus enabling the financial sector in Syria to directly contribute to the sustainable economic recovery of the country.
