The Governor of the Central Bank of Iraq, Ali Al-Allaq, has announced the launch of a comprehensive plan to reform private banks in partnership with local and international institutions, Al-Iqtisad News reported on April 7.

"Iraqi banks have taken significant steps in developing their banking services, but they are required to be more open to modern technology," Al-Allaq said during the Iraqi Banking Sector Reform Conference, emphasising that artificial intelligence should be at the core of future investments in the banking sector.

The next phase will witness a qualitative shift in the nature of banking services, based on innovation and digital transformation, according to the governor.

"The world is witnessing a broad transformation in financial infrastructure and banking systems, which requires traditional banks to keep pace with this radical change by providing innovative services that meet customer expectations in light of the tremendous technological acceleration," he added.

The Central Bank Governor pointed out that electronic currencies will play a vital role in accelerating payment processes and financial transfers, making it imperative for banks to develop their digital infrastructure.

He also noted that central bank digital currencies (CBDCs) may reshape the global banking system map, adding: "Successful future banks are those that adopt digital transformation tools and integrate artificial intelligence into their daily operations."

The reform plan comes as part of Iraq's efforts to modernise its financial sector and align with global banking standards while addressing longstanding issues in the country's private banking system.