Digital banking in UAE is now open to anyone from 8 years and over

Anyone thinking that digital banking will take time to build up mass in the UAE is clearly behind the times. Upcoming weeks will see more brand new entities enter this space, offering the promise of all-digital transactions and where physical cash becomes a memory.

Yes, the bigger agenda is get the country’s residents – right from the very young – to get schooled in new-age banking ways. While more banking customers are getting used to transferring funds or paying bills instantly, that is not all digital banking can deliver. Each facet of traditional banking will get transported to a digital interface, leading to a visit to the nearest branch or ATM as obsolete. Or nearly obsolete.

On August 23, Abu Dhabi Islamic Bank (ADIB) launched ‘Amwali’ as the world’s first Islamic digital bank targeting anyone and everyone between the ages eight to 18. Amwali will bring together a suite of early-used banking services in ways that makes first-generation users comfortable with the medium.

The move also focuses on encouraging smart saving among the target generation. Exposure to banking at an even younger age than is considered the norm in “traditional” banking can help them streamline spending habits and help them understand better the need for budgeting.

One of the biggest fears a parent has is leaving behind a child ill-equipped to be a responsible adult. This includes dealing in matters of financial planning; managing savings and creating a nest egg for those days that you hope will never come but might show up as unexpectedly as the pandemic did last year.

“There are many ways to encourage a child to be financially sound, one of them is ledger method,” said Karishma Nandkeolyar, Parenting Editor at Gulf News. “You teach them about credits and debits, and through numbers they learn what a good balance is and what a negative one is. The key here is to ensure cost-checking becomes a way of life and the best way to do that is by explaining it as you go. Digital banking then becomes a useful tool in helping parents track – explain and change - the good, the bad and the ugly spending patterns of their children easily.”

While millennials have always been the core target user base for digital banking ventures, Amwali and ADIB want to take it one generation younger. “Millennials and Gen Zs are looking for a dedicated digital channel that truly delivers their banking needs and financial goals,” said Raweya Al Qader, Head of Youth Banking, ADIB. “They have grown accustomed to fast-paced and digital interactions that offer convenience and mobility, especially as we progress towards a cashless society. Likewise, parents in the UAE are looking for ways to help their children manage their money as they take charge of their financial future.

"Seamless online transactions at my fingertips, and the knowledge that my earnings will be safely saved for my future education and other necessities – these reasons are why I am looking to open a digital banking account, here in UAE. I first learnt to save during university years abroad, where my account housed my funds for accommodation and living expenses," said Sraddha Sabu, features intern at Gulf News. "Visiting banks were a hassle due to short workdays, but the freedom afforded by quick online and mobile banking, whether for shopping, fees or rent made my transition to using financial services much easier."

This is the year that digital banking forced its way into the wider spotlight in the UAE. Earlier this year, the UAE Central Bank granted the first license for an all-digital bank to Al Maryah Community Bank. It is the “first specialized digital bank to serve the UAE community” where customers can “seamlessly” open accounts and “experience smart banking services built on AI powered technology integrated with UAE Government’s Smart Services”. The bank focuses on supporting the funding needs of individuals and small businesses.

In 2017, Emirates NBD had launched Liv, the UAE’s first digital bank and targeted at millennials. Liv was introduced with an aim to provide a differentiated digital experience for a new generation of customers, and adapting to their individual preferences by providing a banking platform that is intuitive and simple to use. The take up rates for legacy banks’ digital-only versions have been quite brisk.

What is digital-only banking? It is banking simplified and with your smartphone as interface. It’s integrating digital technology into all areas of the money chain. More importantly, it also means an overhaul of the culture and behaviour in managing value — how it’s stored, shared and regulated.

A new full-scale digital bank - 'Zand' - is set to open in the UAE and becoming the "first in the world" to offer both retail and corporate banking services. Zand will be "unique in focusing on ecosystems and communities of businesses and individuals, enabling it to introduce unique products and services not traditionally available," a recent statement issued by it added.

Zand is awaiting regulatory clearance to go live. Its website asks visitors to register their interest for updates.

Digital’s time has arrived – and most definitely so in the UAE banking space.