How Iraq’s first digital bank is reshaping its cash-driven economy

Kawa Junad, founder of First Iraqi Bank (FIB), states that the primary challenge in establishing Iraq's first digital bank was convincing the public of the value of formal banking. Licensed by the Central Bank of Iraq since 2020, the bank has moved beyond traditional models to serve over 1.3 million customers, 90 percent of whom previously lacked bank accounts. By utilizing QR codes and a mobile application, the bank has integrated 30,000 small and medium-sized enterprises into its digital payment network.

According to the report, digital transactions through FIB grew by more than 85 percent between 2024 and 2025, with a further 70 percent increase in the first half of 2026. Junad notes that many businesses have significantly reduced their reliance on cash transactions. Beyond payments, approximately 30 percent of the bank's customer base now utilizes services such as savings and salary accounts.

This digital shift is particularly evident among younger Iraqis aged 18 to 35. The Central Bank of Iraq supported this transition by issuing new digital banking regulations in 2024 to provide a framework for the growing marketplace. Junad believes the next phase for the bank is the introduction of digital lending and credit services, which could facilitate financial access for small businesses.

Despite its digital-only model, the bank has established physical branches in major cities including Baghdad, Basra, Najaf, and Nineveh to build customer trust. The founder emphasizes that these changes represent a tangible, near-term transformation for an economy that remains heavily reliant on informal cash transactions.