Digital Transformation In Banking And Financial Services in UAE

There has been a very focused shift in the global banking scene towards increased digitization with a minimized branch interface. Retail banks in the region are fiercely competitive on offering their consumers a superior banking experience. But they seem to be missing out on digitization wave that has taken over the world and those ripples are yet to fully reach the banking sector. Three out of four GCC customers would be ready to switch banks for a better digital experience an EY report reported. This points towards the digital transformation we are undergoing over the past few years.
Why do UAE consumers look for in the omni-channel banking experience?
Consumers in the UAE increasingly want to be able to resolve their basic banking issues without having to speak to a bank adviser by phone, according to a new survey from Avaya, a global communications company noted a report published by Gulf News. There are moves to develop services via other online platforms and apps, including social media networks like Facebook and Twitter as well. CBD’s branch on Twitter or Emirates NBD’s balance enquiries via Twitter are just some examples.
Consumers in the UAE prefer using mobile applications as opposed to using the bank’s website The Customer Experience in Banking Survey found. While applications are the preferred platform for transactions, internet banking is the preferred choice for new products and information requests. The bank in a palm is the vision for a digital bank that is smart phone enabled. Not all banks in the country have launched a smartphone app but the number is growing all the time.
Brick and mortar branch based services, no longer a viable banking solution!
There would be very limited branch expansion for branches in the years to come and would mostly be limited to dealing with more complex services such as investment advice. Through the longer term, the need for brick and mortar branches could be even further eroded with a leaner size and more technologically enabled ones being preferred. It is forecasted that full function ATMs will be on the rise in contrast to branches as millennials and technically connected consumers demand digitized and personalized services.
Regional banks target millennial consumer through the introduction of digitized services
In the GCC, digital banking is still in it’s infancy with traditional banks beginning to experiment by opening a digitized window. Commercial Bank of Dubai’s CBD Now, Abu Dhabi Islamic Bank’s partnership with Fidor Bank to open a community based digital bank, Mashreq bank’s newly announced digital bank are just some initiatives towards banks targeting millennials. There are fully established digital banks such as DBS based in Singapore that has been crowned the world’s best digital bank by the Euromoney Awards for Excellence, thanks to its simultaneous embrace of biometrics, artificial intelligence and intuitive tech implying the future of banking. Similarly, there is Fidor Bank, Atom Bank, National Australia Bank and CAIXA Bank who have embarked on the digital journey and are miles ahead.
The future of banking, an opportunity for new banking players to gain market share
Though there are structural obstacles, the shift is likely to only intensify towards what is going to be the new norm. Gaining a competitive edge means serving customers in innovative ways and at economic costs. Those who fail to adapt shall be left irrelevant and without a significant market share in the next 5 years.
The views expressed in this article are the personal views of Andreea Danila, the Founder & Managing Director of Millennial Capital Limited.