The significant rise in data volume and frequency, accompanied by the emergence of sophisticated technologies like artificial intelligence and machine learning for data analysis, has sparked a notable transformation across multiple sectors, particularly within the domain of central banking. Globally, many central banks are increasingly inclined towards harnessing the potential of big data to streamline their functions and strengthen decision-making processes.
This study aims to spotlight the potential uses of big data within the operations of central banks, emphasizing both the opportunities and obstacles linked to its implementation.
Additionally, it aims to assess the actual situation and hurdles in applying big data within Arab central banks by utilizing a questionnaire directed specifically to these institutions. The questionnaire sought to elicit the perspectives of Arab central banks on big data, shedding light on the most significant opportunities and challenges in this domain. Responses were gathered from eleven central banks situated in Jordan, the Emirates, Bahrain, Saudi Arabia, Sudan, Iraq, Qatar, Lebanon, Libya, Morocco, and Yemen.
The study's results indicate that the majority of Arab central banks lack a clear comprehension and strategy for employing big data, showcasing diverse levels of consideration and application. These banks, however, foresee substantial benefits from embracing big data, especially in fraud detection, early warning system structuring, extensive regulatory supervision, utilizing Regulatory Technology (RegTech), and combating money laundering and terrorism financing. Yet, these banks face notable hurdles, including a scarcity of skilled professionals, managing vast data volumes, ensuring legal compliance, and prioritizing privacy protection, which remains paramount. Addressing these challenges requires a focused approach, including skill development, refining data management
protocols, and bolstering cybersecurity measures within the organizational setup.
Furthermore, fostering cooperation at local, regional, and global levels emerges as crucial for knowledge. The study emphasizes that while Arab central banks acknowledge big data's potential, significant impediments hinder its practical application. Therefore, overcoming
these implements is essential to effectively leverage the potential of big data.
To address these challenges, the study recommends increased investment in big data infrastructure and talent development, the establishment of robust governance frameworks for
big data, and promoting cooperation to exchange knowledge and good practices.
Implementing these measures is poised to empower Arab central banks, enhancing their operational efficiency and enabling them to execute their tasks in a more effective manner.
Keywords: big data, central banks, monetary policy, financial stability, regulatory oversight, data privacy, cybersecurity, artificial intelligence, machine learning.