Company Profile: Buna (The Arab Regional Payments Clearing and Settlement Organization)

Background

Buna, officially known as the Arab Regional Payments Clearing and Settlement Organization (ARPCSO), is a cross-border, multi-currency payment system established by the Arab Monetary Fund (AMF) in 2018. Its primary mission is to enhance economic and financial integration among Arab countries and to expand trade and investment activities with global partners. By providing a centralized, secure, and efficient platform, Buna enables commercial banks, central banks, and other financial institutions in the Arab region and beyond to send and receive payments in both Arab and key international currencies.

Key Strategic Focus

Buna's strategic objectives include:

Enhancing Cross-Border Payment Efficiency: By offering real-time settlement services, Buna aims to streamline cross-border transactions, reducing reliance on traditional, slower systems.

Empowering Arab Economies: Facilitating seamless payments supports economic growth and integration within the Arab region.

Promoting the Use of Regional Currencies: Buna encourages the utilization of Arab currencies in international trade, thereby strengthening regional financial autonomy.

Streamlining Trade Relationships with Global Partners: By providing a robust payment infrastructure, Buna fosters stronger economic ties between Arab countries and the global market.

Financials and Funding

As a subsidiary of the Arab Monetary Fund, Buna operates under the financial auspices of the AMF. The AMF, established in 1976, is a regional Arab organization aimed at fostering monetary cooperation and financial stability among its member states.

Pipeline Development

Buna has achieved significant milestones since its inception:

Currency Integration: The platform currently supports six currencies: the Emirati Dirham (AED), Egyptian Pound (EGP), Saudi Riyal (SAR), Jordanian Dinar (JOD), US Dollar (USD), and Euro (EUR).

Participant Expansion: Over 110 financial institutions have joined Buna, processing approximately 15,000 transactions per month, with a growth rate of 15% month-on-month.

Technological Enhancements: Buna has implemented a Payment versus Payment (PvP) service to ensure safer settlement of foreign exchange transactions.

Technological Platform and Innovation

Buna's technological infrastructure is designed to meet the highest international standards:

Real-Time Gross Settlement (RTGS) System: Facilitates immediate settlement of transactions, enhancing efficiency and reducing settlement risk.

Microservices-Based Architecture: Provides flexibility and scalability, allowing for seamless integration with participating financial institutions.

Robust Compliance Mechanisms: Incorporates stringent anti-money laundering (AML) and combating the financing of terrorism (CFT) protocols to ensure secure transactions.

Leadership Team

H.E. Fahad M. Alturki, Ph.D.: Chairman of the Board. Dr. Alturki joined the Arab Monetary Fund as Director General Chairman of the Board of Executive Directors in November 2023. He has held several leadership positions, including Vice-President of the King Abdullah Petroleum Studies and Research Center (KAPSARC).

Mr. Abdulaziz AlOnaizan: Board Member. CEO and member of the Board of Directors and Executive Committee of Bank Albilad. He also serves as Chairman of the Board of Enjaz Payment Services Company and Vice-Chairman of the Board of Albilad Capital.

Mr. Bilal Sabah Hussain: Board Member. General Manager and Chairman of the Industrial Bank and the Trade Bank of Iraq. He has extensive experience in banking, particularly in trade finance and retail banking.

Mr. Chong-Tee Ong: Independent Board Member. Former Deputy Managing Director at the Monetary Authority of Singapore (MAS), with 35 years of experience in central banking roles.

Mr. Jean-Michel Godeffroy: Independent Board Member. Senior international consultant with expertise in payments and market infrastructure from a central bank perspective. Former Director General at the European Central Bank.

Leadership Changes

In November 2023, Dr. Fahad M. Alturki was appointed as the Director General Chairman of the Board of Executive Directors of the Arab Monetary Fund, thereby assuming the role of Chairman of Buna's Board of Directors.

Competitor Profile

Market Insights and Dynamics

The cross-border payment landscape in the Middle East is evolving rapidly, driven by increased trade, investment, and mobility of workers. The region's economies are diversifying, necessitating efficient and cost-effective payment solutions.

Competitor Analysis

AFAQ: Managed by the Gulf Payments Company, AFAQ is a regional payment system that enables real-time, low-cost financial transfers between Gulf Cooperation Council (GCC) countries, using local currencies and key international currencies.

EBA Clearing: A provider of pan-European payment infrastructure, operating major payment systems like EURO1 and STEP2-T.

Asian Clearing Union (ACU): Established to facilitate multilateral payments among member countries, promoting the use of participants' currencies and monetary cooperation.

Strategic Collaborations and Partnerships

Buna has engaged in several strategic partnerships to enhance its services:

Standard Chartered: Collaborated to activate euro cross-border payments, enabling real-time settlement of euro transactions.

Emirates NBD: Partnered to facilitate payments and transfers within the Arab region, providing clients with rapid, efficient, and secure cross-border transactions.

Egyptian Banks Company (EBC): Signed a Memorandum of Understanding to interlink payment services, aiming to achieve reachability across multiple instant payment services and provide innovative cross-border payment solutions.

Operational Insights

Buna's operational strategy focuses on:

Real-Time Settlement: Offering immediate transaction processing to enhance efficiency.

Multi-Currency Support: Facilitating payments in multiple Arab and international currencies to cater to diverse market needs.

Compliance and Security: Implementing robust AML and CFT measures to ensure secure and compliant transactions.

Strategic Opportunities and Future Directions

Buna is poised to expand its reach and capabilities:

Geographical Expansion: Exploring partnerships with markets in Africa, India, Pakistan, and Europe to extend its cross-border payment services.

Technological Advancements: Preparing to support central bank digital currencies (CBDCs) and exploring the integration of blockchain technology to enhance payment solutions.

Enhanced Service Offerings: Continuously developing innovative payment solutions to meet the evolving needs of financial institutions and their clients.