Dubai: Banks in the Middle East and around the world have been racing to catch up with the ever-evolving technological trends and the COVID-19 has accelerated the trend according to a recent study by Deloitte.
The report finds that prior to COVID-19, the Middle East financial services industry was evolving at a measured pace, driven by changing customer expectations, heightened competition from incumbents and new entrants, evolving regulations, and advancements in technology.
“In a matter of weeks, COVID-19 upended those conventions. As the threat and uncertainty from COVID-19 will remain for the foreseeable future, banks have no choice but to remain hyper vigilant and rewrite their business continuity playbooks as circumstances change,” said Khaled Hilmi, Consulting Partner, ME Financial Services industry leader, Deloitte Middle East.
The financial services industry is moving towards digitization at a rapid pace and adopting the latest technologies such as cloud, artificial intelligence (AI), to meet rising customer expectations to remain competitive in today’s challenging business environment.
“While it is reassuring to see some aggressive fiscal and monetary policy responses around the world already, clarity on how these actions will stabilize markets and accelerate the path to normalcy is slowly emerging, and in some cases yet to emerge”, said Hilmi.
The study said banks need to actively consider the immediate needs of their customers and simultaneously the multiple near, short and medium-term operational, financial, and regulatory risk and compliance implications.
“Banks that have embraced today’s technologies may be better placed to weather this crisis and facilitate a quick return to recovery. Now more than ever, the accelerated adoption of these technologies can enable the industry to recover and thrive from the impact of COVID-19,” concludes Hilmi.
• AI and cognitive technologies: Artificial Intelligence (A) is now becoming a part of the business environment and is reinventing the entire ecosystem of the banking sector. By increasing the level of automation and using dynamic systems, AI supports decision-making, enhances the customer experience, and improves operational efficiency. AI also provides a strategic oversight for getting value out of data, which is now needed more than ever due to the data influx from a wide range of sources.
• Fintech: In just a few short years, FinTech companies have defined the direction, shape, and pace of change across almost every banking subsector. Customers now expect seamless digital onboarding, rapid loan approvals, and free person-to-person payments, all innovations that FinTech made popular.
• Blockchain and Distributed Ledger Technology (DLT): Blockchain technology and its associated distributed ledgers were devised as a simple yet smart solution to keep track of the Bitcoin cryptocurrency in circulation. The solution leveraged a ‘distributed ledger’ architecture under which all users who participated as ‘nodes’ in the network had a copy of the entire ledger.