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The banking sector faces a major technological challenge as Iran prepares to eliminate four zeros from its national currency. This transition involves far more than an economic policy change; it is a large-scale IT project impacting banking systems, payment networks, physical devices, databases, and even staff and customer education. Mehdi Taleb, Deputy IT Manager at Melal Credit Institution, told Digiato that the transition requires meticulous planning and phased implementation to avoid disruptions in daily operations.
The plan to simplify financial transactions and enhance national accounting systems has been discussed for years. While often analyzed from an economic perspective, its technical and operational dimensions have received less attention.
Taleb emphasized that this change cannot happen overnight. Software updates alone, including analysis, design, implementation, testing, and deployment, could take one to two years. However, old banknotes may remain in circulation for up to five years as they are gradually replaced by new ones. During this transitional period, financial systems must support both currency units simultaneously.
One key challenge is creating compatibility between transactions recorded in both currencies. This dual-system requirement extends beyond software to hardware like ATMs, which may need separate cash slots for old and new banknotes.
Taleb highlighted the human factor as another critical issue. Customers and banking staff accustomed to current figures may make errors during transactions. Extensive training programs for users and employees, such as workshops, app-based tutorials, and consistent media outreach, are essential to minimize mistakes.
Data management poses another challenge: should historical transaction data be converted entirely into the new currency unit or handled incrementally? Taleb suggested adding a new column in databases for the updated unit while retaining old data intact. This dual-record approach allows seamless reporting without altering original records.
Rigorous testing of banking systems is crucial before full implementation. Taleb stressed comprehensive simulations across all platforms, from core banking systems to customer-facing apps, to prevent system errors that could disrupt payments or financial reconciliations.
Ultimately, eliminating four zeros from Iran’s currency is more than an economic reform; it is a digital transformation project requiring precise execution across technical infrastructures. With proper planning and collaboration among the Central Bank, financial institutions, and fintech companies, this initiative could modernize Iran’s banking systems while improving customer experiences.
