Junad: trust in tech will fuel Iraq’s mobile banking future

• 85% payments still made in cash
• Digital growth expected of 24% p.a
• First Iraqi Bank founder on test ahead

Iraq can leapfrog from cash to mobile-first banking if it builds the trust and infrastructure needed to make digital finance part of daily life, a fintech executive has told AGBI.

First Iraqi Bank founder Kawa Junad says the challenge is to build a digital banking network that made it easy to open accounts, improve financial literacy and give people confidence that their data was secure.

Around 85 percent of daily transactions in Iraq are still conducted in cash, according to data published by Swedish comparison platform Forex.se. But the German Agency for International Cooperation expects digital payment values to grow by about 24 percent annually between 2025 and 2029.

“A large part of the population is still moving from cash into formal financial services,” Junad tells AGBI. “That means the market has to build trust, financial literacy, infrastructure and adoption at the same time.”

Much of the work is “more foundational” than in the GCC, he says. “The lesson from more mature markets is that digital finance works best when the full ecosystem develops together.”

Iraq’s population stands at around 45 million, with about 60 percent under 25, according to the latest census. Yet decades of conflict, sanctions and political instability have left the economy reliant on cash, while the fallout from the Iran war has added to economic uncertainty.

Local fintech ZainCash recently said it expects digital payments to accelerate as younger Iraqis adopt mobile financial services, although uptake remains at an early stage.

Junad says First Iraqi Bank was built around removing the barriers that discourage people from using formal banking through simpler onboarding, digital identity and payment tools. The bank now has more than 1.3 million active customers, with transaction volumes growing by more than 5 percent month on month this year, he says.

About 90 percent of customers had not previously used the banking system, he says, underlining that much of Iraq’s digital banking growth is being driven by first-time users. There has also been a significant surge in women using digital banking since the Covid-19 pandemic.

“Customers need to see where they can use it, and merchants need to see why accepting it helps their business,” Junad says.

“Cash is familiar. People know how it works. Digital payments have to earn that same confidence. But people do not adopt digital banking because the technology sounds advanced. They adopt it when it solves a real daily problem.”

QR payments, which let customers scan a code to pay, and software point of sale (SoftPOS), which turns a smartphone into a payment terminal, are helping smaller businesses accept digital payments.

“For many small businesses, the barrier to accepting digital payments is operational as much as cultural,” Junad says. “They may not want to buy additional hardware or go through a complicated set-up process.”

Digital customer numbers have grown by 15 percent over the past year, he says, reflecting wider adoption of digital payments.

Public trust depends on making digital banking simple and reliable, he adds. “If the app is difficult, if a payment fails or if support is slow, trust is damaged quickly.”

Facial recognition, digital identity and automated onboarding could remove friction while maintaining compliance and fraud controls.

The Central Bank of Iraq has stepped up efforts to build the foundations for digital finance through new regulations and a National ID system designed to simplify customer verification and digital onboarding.

“Our ability to sign up new account holders in roughly five minutes depends on this,” Junad says.

“If opening an account requires too much paperwork, too many branch visits or too much uncertainty around documentation, many people will simply not do it.”

Further reading:

• Iraq’s central bank governor cannot fight crime on his own
• ZainCash CEO: Iraq is 5 years behind in digital payments
• Iraq posts $5bn budget gap as oil revenue slumps during Iran war

Junad says his experience rebuilding Iraq’s telecommunications infrastructure has shaped his approach to banking. He founded Fastlink, helping rebuild Iraq’s telecoms network after the 2003 war before introducing 4G services in his home Kurdistan region.

“In telecoms, you learn very quickly that a service is only as strong as the infrastructure behind it,” he says. “I brought that same mindset into banking.”

Junad says Iraq’s digital banking future will be driven by cooperation between banks and fintechs.

“While we’re clearly a bank, we retain the DNA – and speed – of a fintech,” he says. “If digital finance becomes part of everyday life for consumers and businesses, Iraq can become one of the region’s most interesting fintech markets.”