Can any country in the world match the potential for growth that Iran possesses? The second-largest Middle Eastern country in economic and geographic size, with a population of nearly 80 million individuals has, over the past year or so, took tentative steps back into the international fold, aided by the reformist principles of President Hassan Rouhani (recently re-elected) and the Obama administration’s commitment to sealing a nuclear deal, reached in 2015.
As a consequence of Iran’s gradual re-emergence into the international trading sphere, global standards in regulation are being introduced or updated. It’s much needed — last year, the head of Iran’s central bank Veliollah Saif conceded that the procedures of the country’s banks were outdated, and proposed two solutions to bring about change: the reintegration of Iranian banks with those around the world and the bringing into line of compliance and regulation with international standards.
As part of this second proposed solution, ICT, in conjunction with OSACO, visited Iran to conduct training for employees at Saman Bank in compliance and financial crime prevention. ICT’s presence in the country indicates the push toward increased regulation in the country, as it seeks to assert itself globally following the easing of sanctions.
Iranian reengagement with the global banking system was a significant aspect of the nuclear deal; President Rouhani explicitly referenced the lack of access to the global banking system as one of the negative effects of the former sanctions following the deal.
Returning to the global stage posed many problems for Iran, none more pressing than the regulation of the financial services industry, which, being an industry directly concerned with the imposed sanctions, is central to the country’s ambition to make up for what some consider lost time.
Access to the Society for Worldwide Interbank Financial Telecommunication (SWIFT) network means that no further time will be lost. Iranian banks can operate in the global financial networks only with access to SWIFT. In 2012, following pressure from groups hostile to the Iranian nuclear programme, the US Senate Banking Committee issued sanctions against SWIFT.
The Committee alleged that SWIFT was contravening US and EU financial sanctions against Iran. In response, SWIFT disconnected Iranian banks from the network in March 2012. The lifting of sanctions in January 2016 saw Iranian financial institutions reconnected to the SWIFT network.
Iran’s widely-documented start-up scene has in the meantime relied on its own wits to fill the void left by economic sanctions. This energetic and resourceful tech-led culture is flourishing in the country, and its future development and growth is reliant upon the financial services industry.
Nobody would be naïve enough to suggest that there is not a great deal more work to be done concerning the regulation of financial services in Iran, or that the stability achieved via the nuclear deal is not capable of being upset. What is certain is that if Iran has the appropriate infrastructure in place to aid growth, then Iran will be a step closer to reaching its potential.