Abu Dhabi
IT research and advisory firm Gartner advised banks and financial institutions to overcome political or regulatory framework to create a successful business model based on digital technology.
According to the firm, political or regulatory frameworks, current organisation culture and inadequate IT infrastructure are the top three challenges being faced by banking and financial services industry in developing and implementing innovation projects in the digital technology.
The firm said 43 per cent of the respondents outlined political or regulatory framework as one of the main challenges in developing and implementing innovation projects where as 42 per cent cited current organisation structure which doesn’t accept failure or ideas from outside as another main challenge.
There are also other issues facing the industry including lack of strong leadership linking innovation to enterprise strategy, lack of funding and lack of good ideas, Arnold C. Gutmann, senior executive partner of Gartner said in a presentation at a financial technological conference (Meftech 2017) in Abu Dhabi on Monday.
But he said these factors can be overcome to create a successful business model and gave the examples of successful digital companies like Apple, Facebook, Alibaba on how they lobbied to create a strong enterprise despite strict regulatory framework.
“Pioneers in the digital environment like Apple, Facebook, Alibaba, they all started with an illegal business model and whatever they did was not according to the norm or the policies at that time but they lobbied and created a successful business model.”
He also said that current organisation culture should not be a hindrance for the banks to go digital.
“In the Middle East, we use culture as an excuse but it should not be a problem. I advise banks not to use regulatory policy as an excuse and not hide behind culture. The problem exists everywhere and is not restricted to the region alone.”
He, however said some of the banks in the UAE including Emirates NBD, Abu Dhabi Commercial Bank are doing innovative stuff way beyond what the banks in the US are doing currently.
“We see a big chance for the region to establish themselves as one of the FinTech hubs. Abu Dhabi Global Market has come up with Regulatory Laboratory, an incubator for FinTech. DIFC (Dubai International Financial City), Bahrain and Qatar are also doing the same thing.”
The firm also predicted that 100 million people will be shopping with augmented reality by 2020, there will be $10 billion(Dh36.7 billion) blockchain business by 2022 and 30 per cent will be browsing without screen by 2020.
Twenty per cent of companies will abandon mobile apps by 2019 and 20 per cent of activities involve digital giants like Alibaba, Amazon, facebook and Apple by 2021.
Meanwhile, Seclore, a California based company announced the opening of its regional office in Dubai to meet the rising demand for its data centric security solutions in banking, financial services and insurance sector.
“There is growing interest in information-centric security methods that can function as the last line of defence when firewalls, anti-malware tools and other traditional defences fail,” said Sanjay Raina, managing director of Ascent, Seclore’s vendor representative for the Middle East.
