UAE Shows Strong Potential For Digital Banking

A young population, high smartphone penetration rates and a growing e-commerce segment will accelerate digital banking practices in the UAE, according to an A.T. Kearney report.

The UAE, ranked 17 in the digital banking readiness index featured in the report, does not offer an attractive environment for digital banking currently but has strong potential to be one in the future.

The need for improved customer services and high internet usage will fast track the UAE’s transition to a digital banking economy, the report said.

According to experts, a digital banking economy will see customers benefiting from fair prices and increased transparency and comparability while banks meet their needs with secure transactions.

“As expressed by Sheikh Mohammed bin Rashid Al Maktoum, countries like the UAE are moving towards ‘Mobile Government’, with government services reaching the people rather than the people reaching out for the government,” said Anshu Vats, partner at A.T. Kearney.

“The government of the future will function 24/7 and 365 days a year – this principal is absolutely relevant to the banking sector, as residents embrace connecting with government this way, they will be ready to do that in other parts of their lives such as their finance.”

The report also said that banks should dismantle old structures and include flexible processes, new revenue models and cultural changes to facilitate the growth of digital banking.

“Traditional banks carry a lot of heritage, so it’s crucial they overcome the internal hurdles to be able to deploy quick decision making and an agile, high performance IT infrastructure enabling a customer-centric channel based in the digital environment,” said Cyril Garbois, partner, A.T. Kearney.

“The main thing is – banking will become more digital, it’s only a matter of time.”