Dubai: The UAE is one of the countries that is leading digital banking initiatives in the region and is seen as reaching global standards quickly, according to a study from A. T. Kearney and European Financial Management Association (EFMA).
The study finds that the GCC has solid foundations for a move towards adopting digital banking as a way of improving customer service as the region. Despite the GCC currently having less than 20 per cent online penetration, and the Middle East seen as being low in digital banking readiness, the study says the region is well equipped to begin moving toward online banking.
Currently, the UAE is ranked 17th in the digital banking index and rated as not yet an attractive environment for digital banking.
However, the report says many other factors are setting the scene for change. The UAE has a young population with a median age of 30 years old, more than 60 per cent smartphone penetration, high internet usage and access, socially networked customers, a strongly growing e-commerce segment, and a need for improved customer service.
New smart banking initiatives
Some of the UAE banks such as Emirates NBD and Mashreq have invested in new smart banking initiatives. Mashreq expects smart banking technologies to play a big role in its future expansion and asset growth. The bank recently rolled out its smart banking initiative which offers banking products and services across various devices such as smart phones, tablets, computers and interactive touch screens installed across its new smart branches.
“To start with we are rolling out the smart banking concepts across 12 branches. In all, eight smart branches will be operational by the end of this year. Eventually, the concept will be launched across all our main branches,” said Farhad Irani, Mashreq’s head of retail banking.
Emirates END is also planning to roll out new smart banking initiatives that will deliver banking services 24/7 across a number of technology driven delivery channels.
“Countries like the UAE are moving towards ‘Mobile Government’, with government services reaching the people rather than the people reaching out for the government. This principal is absolutely relevant to the banking sector,” said Anshu Vats, Partner at A.T. Kearney.
The study says, behind the scenes, banks must clean up legacy processes, and dismantle old structures to enable a new digital-centric environment to flourish.
“Traditional banks carry a lot of heritage, so it’s crucial they overcome the internal hurdles to be able to deploy quick decision making and processing and an agile, high performance IT infrastructure,” said Cyril Garbois, Partner, A.T. Kearney.
