These are the technologies reshaping payments, banking in the UAE

Aligned with the UAE’s Artificial Intelligence Strategy 2031 and the Economic Agenda D33, the UAE is poised for rapid advancements in financial technology innovations, artificial intelligence, and blockchain technology.

Read on to learn more about the five key technologies that are reshaping payments and banking in the UAE.

Artificial intelligence (AI): From streamlining operations to managing risk and bolstering customer service, AI and machine learning are transforming financial institutions at a rapid pace. These technologies improve decision-making processes using large-scale data analysis to provide insights. Traditional customer service has also shifted to AI-powered chatbots developed to manage accounts, answer customer queries, and even provide financial advice. Not only does this automation improve overall service quality but enables human agents to focus on more complicated processes.

Blockchain technology: Created initially to support Bitcoin, blockchain technology is being increasingly explored by financial institutions to improve transparency in transactions and boost security. This is useful for financial institutions that offer digital assets directly to their customers enabling traditional financial firms’ accessibility to new revenue streams. For cross-border payments that set a regional benchmark for innovation, some UAE banking leaders have already integrated blockchain which has enabled more secure and faster transactions.

Digital payments: Moving from traditional processes to a fully digital, tech-forward ecosystem, the UAE Central Bank has outlined a plan under the National Payments Systems Strategy to strengthen the existing system. Previously reliant on paper processes, digital payments are streamlining payments in the UAE with systems in place for e-commerce including a 24/7 Immediate Payment System, Direct Debit, cheque truncation (digital cheque processing), and the Wage Protection payroll system. Backed by robust Fintech growth, the UAE’s payment system is rapidly transforming with its integration of an enhanced infrastructure for regional and local transactions and banks’ digital initiatives.

Neobanks (digital-only banks): Neobanks leverage technology to offer streamlined banking services and operate without physical branches. According to a report from the British fintech software company Finastra, an estimated 25 per cent of consumers considering switching to a digital bank in the next few years. Neobank’s transparency and robust customer service make it a game-changer for customers seeking to enhance their digital banking experience.

Crowdfunding & peer-to-peer lending:  Disrupting the way that start-ups access capital, crowdfunding platforms enable entrepreneurs the opportunity to directly sell their ideas to the public. This reduces costs and eliminates intermediaries by providing quicker alternatives to traditional venture capital. The rise of peer-to-peer (P2P) lending platforms directly connects borrowers with investors. P2P companies allow businesses and individuals the opportunity to obtain loans with higher returns for investors and reduced interest rates for borrowers.