The banking sector has probably seen the biggest leap in its service basket, thanks to the rise of tech-driven solutions. But like it or not, digitisation has only led to a rise in the need for hyper-personalization among customers.
The value of physical touchpoints has risen sharply, largely due to the complex scope of financial services. And as financial institutions are coming to discover, attending to customer needs is paramount and cannot be ignored in the larger journey to disrupt the space.
Can ‘open banking’ bridge this gap?
UAE’s exchange houses have for long filled the need for personalized support in the remittances sector, plying their trade by prioritizing customer service. The advent of the Wage Protection System and its rollout as a transactional service through exchange houses enabled greater financial inclusion among the country’s under-banked population.
Much more than remit
Now, with the move to transform exchange houses into banking service platforms, the country is set to usher in a new era in ‘phygital’ customer experiences. By allowing neo-banks such as Wio to collaborate with exchange houses to provide basic services such as cash deposit and withdrawal, the UAE is live testing the possibilities of merging open banking applications with the wide grassroots level reach of exchange houses.
Fundamentally, this is a very progressive decision. The exchange houses that are members of the UAE’s Foreign Exchange and Remittance Group (FERG) are truly technology driven entities using hybrid operating models to seamlessly bridge the gap between digital and physical users.
Fintechs as ‘balancing force’
With such a regulated and robust infrastructure already in place, they are well positioned to optimize operating costs for traditional financial institutions and pass on the benefit to customers. Without doubt, fintechs have a continuing role to play in nurturing this ecosystem and accelerating the role of technology. If a decade ago, the talk centered on fintechs usurping the role of banks, today, fintechs are seen more as a balancing force, driving the way people interact with financial products and services.
Bespoke APIs remain crucial to create easier customer journeys and ensure backend processes are embedded seamlessly between various institutions. For now though, what’s most exciting is the UAE’s intent to drive value in the financial services sector through its exchange houses which can drive greater financial inclusion, while keeping the nation’s Digital Economy at its heart.