Banks need to rethink about changes and challenges, says KPMG

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Banks need to rethink about changes and challenges, says KPMG

Dubai - Dubai The report is based on an examination of 10 leading listed local banks and offers insights on the key trends that are set to accelerate or disrupt the industry in the near future.

By Rohma Sadaqat

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Published: Mon 9 May 2016, 5:16 PM

Last updated: Mon 9 May 2016, 11:25 PM

Banks need to rethink their approach when it comes to changes and challenges in their customer and business strategies, KPMG's first UAE Banking Perspectives report has claimed.
The report is based on an examination of 10 leading listed local banks and offers insights on the key trends that are set to accelerate or disrupt the industry in the near future. In the wake of market volatility and tightening global liquidity, it makes sense for banks to focus more on their digital and talent strategies in 2016, to stay ahead in the long run.
Following international and local regulatory drives, various reforms have been, and are expected to be, rolled out in the UAE which will provide banks with growth opportunities if handled efficiently and effectively.
"We are delighted to highlight the trends that will shape the banking sector in the UAE in 2016," said Vikas Papriwal, head of markets at KPMG Lower Gulf. "As the UAE continues to invest in a diversified economy, we are confident that UAE banks will find our thought leadership a useful sounding board as they devise strategies to grow their business in 2016 while maintaining liquidity in domestic markets and supporting local businesses."
"2015 was a challenging year for the banking sector in the UAE, with a prolonged period of low oil prices and economic volatility. But we are confident that the impact of greater scrutiny and regulatory reform will pave the way for a more stable banking and financial services sector in the future. This will be driven by other factors like improved efficiency, a more enhanced customer journey, digitisation and tougher cyber security processes," Papriwal noted.
The report highlights that banks need to identify critical functions and roles where investment is required to find and retain the right people. To capture the right talent, talent risk has to be incorporated into wider risk management governance and reporting frameworks. The report also states that financial organisations across the region should significantly improve emergency response and contingency plans so that they can effectively respond to, and recover from, cyber breaches.
Luke Ellyard, financial services partner at KPMG, said: "KPMG's UAE Banking Perspectives 2016 underlines that, while the focus must remain on operational transformation and cost optimisation, banks should look at the rapidly changing landscape as an opportunity to drive improvement, rather than just complying with what is required. The banks that do so will be the ones that have a competitive edge in the long run."
The publication highlights the need for banks to focus on three leading practices to realise the full potential of a digital transformation, including defining what digital means to them; developing a dual-speed operating model; and ensuring that all stakeholders understand that digital is everyone's responsibility.
"The UAE is an important trade and logistics hub and continues to invest in a diversified economy. A competitive financial services sector that is rooted in sound business practices that adopt, adapt and learn from leading practice will help the UAE attain its long term goals," Ellyard revealed. - rohma@khaleejtimes.com



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