Staying ahead of the curve with cashless payment
Residents carry less cash and use plastic to pay their bills, purchase air tickets, for dining out or to make hotel bookings.
With the UAE prioritising cashless payment in its Vision 2021, experts believe that the country is moving towards its goal
The UAE has made giant strides in various fields in recent years. The country was ranked 11th in the World Bank's Doing Business report and 7th in the IMD World Competitiveness Yearbook in 2018.
"Looking at the pace of progress in competitiveness indicators in the past 10 years, I can say with great confidence that we are on the right track towards achieving our vision to be among the top 10 countries in the world," said Younis Haji Al Khoori, Undersecretary of UAE Ministry of Finance.
He added: "Being flexible and diversified, we trust that the UAE economy will maintain its growth in 2019 despite the challenges and the global economic conditions.
"Several developments have taken place last year especially on the soft infrastructure front, where new federal laws were introduced to enforce integration of our economy in the global economy by adopting international standards and best practices, to improve the business climate, reduce cost and increase efficiency. These measures helped achieve the 2018 economic goals and framed the positive outlook for 2019 and 2020."
The UAE is fast moving towards a cashless future. The use of credit cards for transactions is on the rise. Residents carry less cash and use plastic to pay their bills, purchase air tickets, for dining out or to make hotel bookings.
It is imperative to note that the emergence of new technology shows no signs of slowing. So, the UAE banking sector is transforming to be up-to-date. In the last decade, the industry has witnessed an abundance of benefits as a result of significant digital developments, such as online banking and more recently, blockchain. This has further fuelled the appetite of banks to maintain and foster the momentum of the technology revolution.
AbdulAziz Al-Ghurair, Chairman of UAE Banks Federation (UBF) said: "As the UAE has very advanced digital technology infrastructure, it is able to seamlessly cater to the digital shift in consumer preferences.
"As a result, technology has been a major driver of the rapid transformation of the UAE's banking sector. The adoption of digitalisation, in particular, has had a largely positive effect on several areas of banking, customer service being among the most impacted.
"Trends like automation, new payment systems and branchless banking have hugely changed the way customers bank. This has led to structural re-organisation within banks, with fewer brick and mortar outlets, and employees being re-trained and re-deployed. Ultimately, there is an improved and more efficient customer experience."
The UAE is well-equipped to keep pace with the rapid emergence of new technologies. Al-Ghurair added: "We are fortunate to have forward-thinking leaders who recognise the benefits these technologies bring to the table.
In April 2018, the UAE Government launched the Emirates Blockchain Strategy 2021. It aims at capitalising on blockchain technology to transform 50 per cent of government transactions in blockchain platforms by 2021.
"UAE banks are taking cues from this initiative, and are rapidly adopting new cutting-edge technology to enhance customer experience and improve operational efficiencies. UBF is a huge advocate of this digital disruption, and is taking an active role in ensuring that such change takes place across the whole banking sector."
To ensure that banks stay ahead of the curve when it comes to technology, UBF holds workshops, seminars, and meetings, for member banks to exchange knowledge and expertise, and identify new trends and best practices.
Most recently, it proposed the adoption of blockchain to enhance KYC (know-your-customer) processes across different participating banks.
At banks such as National Bank of Fujairah, evolving consumer demands are central to the bank's growth strategy - its mantra is to offer customers services and product innovation that exceed their expectations.
Frederic de Melker, Managing Director - Personal Banking, RAKBANK, noted: "RAKBANK is a market leader in the digital transformation of banking services. From contactless payments to instant remittances; innovation is aligned with our strategy for diversification and cost-optimisation. For us, digital banking solutions are among the most obvious focus areas, allowing busy customers to save time when banking."
Samsung pay, Apple Pay, G Pay, fitbit pay and Garmin Pay are easier, safer and contactless ways of payment offered by the bank.
Paolo Gagliardi, Chief Executive Officer, Trriple Payments LLC, explained the importance of security in digital payments: "Security is, first of all, a state of mind, and it starts from us. Today, technology offers multiple ways to secure peoples' data, but we need to educate everyone around us to apply those means to stay safe.
"The biggest challenge a digital payment provider faces today is ensuring secure transactions for their customers, for which they heavily invest in cybersecurity to avoid fraudulent payments for themselves and their customers."
Explaining his views on a cashless future, Gagliardi adds: "There is potential for the UAE to truly become a cashless society soon. According to the Telecommunications Regulatory Authority, the UAE has one of the highest mobile phone penetrations in the world. The Global insights company, Nielsen, reported that for every 100 UAE residents, about 78 of them own a smartphone.
"The adoption of digital technology is even more extensive in the UAE, with its tech-savvy young and affluent population. Also, one must acknowledge that the embracing of new technologies is known to be higher in emerging markets than in developed countries.
"The country is prioritising cashless payments within the UAE Vision 2021. We believe we can achieve our goal of a 'Cashless Society' supported by new applications. Our objective is to reach out to the large segment of the population that still relies on cash as a main means of transaction, and provide them with a secure, fast and convenient, mobile-based solution."
Elaborating on the retail aspect of a cashless future, Colm McLoughlin, Executive Vice Chairman and CEO, Dubai Duty Free explains: "Technology impacts the customer experience, and in terms of payment methods, so many areas have changed.
"Up to recent times, cash was the important payment method, now it is over 60 per cent cards, and in more recent times we are increasingly looking at contactless payments along with the introduction of Alipay and WeChat Pay. E-commerce has been a game changer and one that we embraced several years ago.
"It was introduced mainly as a convenience for our customers who can order online and pick up their purchase before they travel. Now we are investing a good deal in redefining the online offer and introducing many digital marketing initiatives, whereby we can interact with customers."