The revenue of UAE banks is expected to surge by 52 per cent to about $25 billion by 2030, with digital transformation playing a key role in boosting operations and customer services, the chairman of the institutions' professional representative body said.
The Emirates' “robust” banking sector will remain healthy and stable in the long term, and the effect of financial technology is evident in the changing trends over the past years, Abdulaziz Al Ghurair, chairman of the UAE Banks Federation, said in a keynote at the inaugural Abu Dhabi Finance Week on Tuesday.
The share of cash in payments declined to 20 per cent in 2021 from 69 per cent, while the number of digital accounts jumped. They comprised 51 per cent of all bank accounts in 2021 from 7 per cent in 2018, Mr Al Ghurair said, quoting figures from the Central Bank of the UAE.
Among the UAE's largest and leading banks, about 95 per cent of banking transactions are now done digitally, with mobile banking comprising “well over” 90 per cent of activity, he said.
The UAE is already the “undisputed” top financial hub in the Middle East and one of the top seven globally, he said, and the industry has invested heavily in technology to boost customer bases and bottom line to keep in step with an economy undergoing a rapid digital transformation.
“Changing customer needs have triggered a significant digital transformation across banks. This has resulted in a significant upgrade across ... banks' end-to-end and digital channels to deliver superior customer experience,” Mr Al Ghurair said.
“As a result of all these changes, we have seen digital adaptation increase ... this positive momentum and investments in technology [means UAE banks are] well positioned for the future.”
The UAE has long championed the critical role digital transformation plays in its economy and society as the country positions itself as a global hub for innovation.
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The banking and financial sector is poised to be one of the main benefactors of this shift, given the critical role it plays in the economy and the opportunities it brings to entrepreneurship.
GCC banks have been projected to recover almost to pre-pandemic levels in 2022 starting in 2023, S&P Global Ratings said in its latest report last week.
FinTech, meanwhile, remained the highest funded sector across emerging venture markets — which includes the Middle East — in the first half of 2022, more than tripling to almost $1.68bn in the first half of 2022 from a year ago, start-up data platform Magnitt said in a recent study.
Banks in the UAE have also gone beyond their boundaries to create a more inclusive FinTech environment. As a result, funding for FinTech companies leapt more than threefold to $310 million in 2021 from $92m in 2017, Mr Al Ghurair said.
“Strong digital and financial capabilities will give banks opportunities to expand their model,” he said.
Digital trends are set to continue and grow further in the financial sector, and this means more customer data that needs to be processed and protected.
Banks are addressing this by ramping up their talent pool, hiring designers, engineers and data scientists, Mr Al Ghurair said.
“Managing and using data effectively will become a competitive advantage for banks,” he said.
Changing customer needs have triggered a significant digital transformation across banks. This has resulted in a significant upgrade across ... banks' end-to-end and digital channels to deliver superior customer experience
Abdulaziz Al Ghurair,
chairman of the UAE Banks Federation
The changing landscape will require the financial system and its players to constantly adapt, requiring “continued adjustment of their operating models”.
“Digitisation is now mainstream across all products and segments ... it will continue to be on the rise, and data will be essential for banks to raise their capabilities,” Mr Al Ghurair said.
As a consequence, the number of physical bank branches have declined, down about a third to 581 in 2022 from 823 in 2018.
However, this is a necessary step, as “we need to fundamentally restructure our operating model and reducing our branch network is only the first step”, Mr Al Ghurair said.
Mr Al Ghurair credited the UAE financial system's strength to the efforts of the Abu Dhabi Global Market and the Dubai International Financial Centres, which regulate the industry in their respective emirates and who have a positive effect throughout the country.
Combined, there are more than 7,100 businesses that have licences and about 44,000 employees at the two hubs, with more than 22,000 working in the banking sector alone.
“Collaboration with various stakeholders in the ecosystem will unlock greater value for the industry and unleash innovative solutions for UAE customers,” Mr Al Ghurair said.
Roll of honour: Who won what in 2018/19?
West Asia Premiership: Winners – Bahrain; Runners-up – Dubai Exiles
UAE Premiership: Winners – Abu Dhabi Harlequins; Runners-up – Jebel Ali Dragons
Dubai Rugby Sevens: Winners – Dubai Hurricanes; Runners-up – Abu Dhabi Harlequins
UAE Conference: Winners – Dubai Tigers; Runners-up – Al Ain Amblers
What sanctions would be reimposed?
Under ‘snapback’, measures imposed on Iran by the UN Security Council in six resolutions would be restored, including:
- An arms embargo
- A ban on uranium enrichment and reprocessing
- A ban on launches and other activities with ballistic missiles capable of delivering nuclear weapons, as well as ballistic missile technology transfer and technical assistance
- A targeted global asset freeze and travel ban on Iranian individuals and entities
- Authorisation for countries to inspect Iran Air Cargo and Islamic Republic of Iran Shipping Lines cargoes for banned goods
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BMW M5 specs
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Fuel consumption: 10.6L/100km
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Key findings of Jenkins report
- Founder of the Muslim Brotherhood, Hassan al Banna, "accepted the political utility of violence"
- Views of key Muslim Brotherhood ideologue, Sayyid Qutb, have “consistently been understood” as permitting “the use of extreme violence in the pursuit of the perfect Islamic society” and “never been institutionally disowned” by the movement.
- Muslim Brotherhood at all levels has repeatedly defended Hamas attacks against Israel, including the use of suicide bombers and the killing of civilians.
- Laying out the report in the House of Commons, David Cameron told MPs: "The main findings of the review support the conclusion that membership of, association with, or influence by the Muslim Brotherhood should be considered as a possible indicator of extremism."
UAE currency: the story behind the money in your pockets
Why seagrass matters
- Carbon sink: Seagrass sequesters carbon up to 35X faster than tropical rainforests
- Marine nursery: Crucial habitat for juvenile fish, crustations, and invertebrates
- Biodiversity: Support species like sea turtles, dugongs, and seabirds
- Coastal protection: Reduce erosion and improve water quality
How Apple's credit card works
The Apple Card looks different from a traditional credit card — there's no number on the front and the users' name is etched in metal. The card expands the company's digital Apple Pay services, marrying the physical card to a virtual one and integrating both with the iPhone. Its attributes include quick sign-up, elimination of most fees, strong security protections and cash back.
What does it cost?
Apple says there are no fees associated with the card. That means no late fee, no annual fee, no international fee and no over-the-limit fees. It also said it aims to have among the lowest interest rates in the industry. Users must have an iPhone to use the card, which comes at a cost. But they will earn cash back on their purchases — 3 per cent on Apple purchases, 2 per cent on those with the virtual card and 1 per cent with the physical card. Apple says it is the only card to provide those rewards in real time, so that cash earned can be used immediately.
What will the interest rate be?
The card doesn't come out until summer but Apple has said that as of March, the variable annual percentage rate on the card could be anywhere from 13.24 per cent to 24.24 per cent based on creditworthiness. That's in line with the rest of the market, according to analysts
What about security?
The physical card has no numbers so purchases are made with the embedded chip and the digital version lives in your Apple Wallet on your phone, where it's protected by fingerprints or facial recognition. That means that even if someone steals your phone, they won't be able to use the card to buy things.
Is it easy to use?
Apple says users will be able to sign up for the card in the Wallet app on their iPhone and begin using it almost immediately. It also tracks spending on the phone in a more user-friendly format, eliminating some of the gibberish that fills a traditional credit card statement. Plus it includes some budgeting tools, such as tracking spending and providing estimates of how much interest could be charged on a purchase to help people make an informed decision.
* Associated Press
About Proto21
Date started: May 2018
Founder: Pir Arkam
Based: Dubai
Sector: Additive manufacturing (aka, 3D printing)
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MATCH INFO
Uefa Champions League semi-final, first leg
Bayern Munich v Real Madrid
When: April 25, 10.45pm kick-off (UAE)
Where: Allianz Arena, Munich
Live: BeIN Sports HD
Second leg: May 1, Santiago Bernabeu, Madrid
The years Ramadan fell in May
Engine: 5.6-litre V8
Transmission: seven-speed automatic
Power: 400hp
Torque: 560Nm
Price: Dh234,000 - Dh329,000
On sale: now
Our legal columnist
Name: Yousef Al Bahar
Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994
Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers
Honeymoonish
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Mina Cup winners
Under 12 – Minerva Academy
Under 14 – Unam Pumas
Under 16 – Fursan Hispania
Under 18 – Madenat
Moonfall
Director: Rolan Emmerich
Stars: Patrick Wilson, Halle Berry
Rating: 3/5
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