The Changing Landscape of Banking in the UAE

foreign [Music] ladies and gentlemen good morning I think we had two fun sessions we have one more serious session I've been asked to speak about the future of banking in the UAE so let's look back on the banking history of the UAE our banking sector today is solid and robust banks are well capitalized and profitable a prerequisite for having a healthy and stable financial sector in the long run we have come a long way in the past 20 years if we look back the total asset of UAE Bank sector has grown 12 times from 75 from 75 billion dollar to today 900 billion dollar the share of asset of our normal GDP has also risen from only 70 percent in 2000 to almost 250 000 in 2020 this is in line with the leading economy in the world the U has emerged as Undisputed financial center for the region and among the top seven globally will you allow me to manage my slide please now the second phase is the UAE Bank transformation what happened to the EU banking in the last few years well of course changing customer needs has triggered a significant digital transformation for our local banks banks have invested over one billion dollar in the last five years this has resulted significant upgrade across multiple dimensions on technology banks have modernized their technology stack towards microservices API and Cloud on a digital front banks have also digitized key customer Journey end to end and enhance the the digital channel to deliver a superior customer experience on digital Bank we have seen two pure digital Banks launched here in the UEFA last two years and three local banks have also launched their own digital Banks as well so I have almost five digital banks are working here on in the UAE or the talent front Bank have started recruiting New Age Talent including designer engineer and data science scientists Etc this we have never done in the past but now to be digitally Savvy this kind of talent is prerequisite in the banking agile banks have implemented tech-like agile we have now etisalat sitting with us and he knows what that means we copy them you know adapting to our operation model which really give us a faster delivery cycle and a greater empowerment to our teams as a result of all these changes we have seen digital adaptation increased 95 percent of the banking transaction now happens digitally for most of the leading bank here in the UAE these figures are among the top quartile in the world so we are proud of our digital transformation here in the UAE mobile banking for the large leading bank is well over 90 percent are done most of our transaction on the mobile now we come back to digital sale have also increased significantly from 50 percent to almost over 50 percent acquiring all our customer acquiring income now through digital channels now this has influenced the role of the physical branch in the UAE over 200 branches in the last few years have been shut down and that's represent a 30 drop in the number of branches here in the UAE and one of the leading Bank in the UAE have also closed 80 percent of their uh branches because of their digital transformation enabling the financial ecosystem you know we need also our surrounding system which is you know really uh have helped by our adgm and the IFC have played a significant role in developing our financial sector and putting it on the global map today the IFC and adgm combined have more than 70 000 business license through them with more than 44 000 employees serving these these these uh businesses on top of that we have over 20 000 employees in the banking in the banking sector on the mainland fintech have change has also emerged across all segment and product the UAE is Undisputed hub for the fintech here in the Middle East region with a cumulative investment of more than one billion dollar over the past few years now coming on regulation has come a long way in the past Banks were pushing our regulator for Innovation and today we have our regulator be it at adgm or difc or UAE Central Bank they are now pushing us for more Innovation so we are happy to see our regulator is encouraging us and and pushing us and here's some of these um you know because of this uh fintech have started here and investment in fintech has also increased from a 92 million to a 310 million dollars in 2021. so I think we are moving in the right direction now if we look ahead for the UAE banking industry the banking industry is expected to grow a double digit we will grow today we are revenue for banking is at 16.5 billion dollar by 2030 we expect that to go by 52 percent to a 25 billion dollar uh in in Revenue this is I think this is also after risk so it's a as a growth more than the countries GDP growth over this next eight years so that's banking is growing faster than even the economy which is which is you know a good a good sign now given the mo the positive momentum and the recent investment in technology digital and talent I I believe banks in the year are well positioned for the future now let me look forward and see where we're going to be and what are the trends um and in the UAE I think that digitization of financial service will accelerate in the future digitization is now mainstream across all product and across all segment Banks technology budget and couple and capability will have to continue beyond the rise second managing and using data effectively will become Competitive Edge and the world of data it will be essential for Bank to raise their capability in Analytics digitization will continue adjustment of the operating model we cannot continue to add cost competition from fintech and others will make it impossible for us to survive we need to fundamentally restructure our operating model reducing our Branch network is only first step and we need to take more of that in cutting and trimming Banks will expand their role to in the customer life we've heard it this morning that we need to offer a lot more than banking so strong digital and analytical capabilities give the banks the opportunity to expand their role in tapping and non-banking Revenue the structure of our sector will change the number of players is unlikely to decline despite a wave of consolidation that the attractiveness of the sector is likely to attract new entrant including International Players and non-banking we will see a greater range of business model where players will focus on a specific segment product Originals competition think competition with fintech will move increasingly increasingly to more cooperation collaboration between various stakeholders in the ecosystem Banks feedback or big Tech which will unlock a greater value for the industry and unleash Innovation Innovative solution for the UAE customer in summary the UAE is well positioned to further strengthen its position as a leading a region and a financial center primarily financial center and to bridge between each I remained incredibly optimistic about the future of banking and the UAE ladies and gentlemen thank you very much [Applause]