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Fintech engagement to boost UAE banks' competitiveness Filed on August 21, 2020
Ketaki Sharma, Founder of Algorithm Research. - Supplied photo

Analysts predict a further possible bank consolidations in an already overcrowded market.

The UAE banking sector has made great strides in the adoption of new technologies and Covid-19 outbreak has hastened digitalisation which will give a boost to competitiveness of UAE banks, said Ketaki Sharma, founder of Algorithm Research.

The recently released research report 'UAE: Digitalisation in the banking sector' indicates that on a micro level, branch network has been on a decline since 2014 due to digitisation and mergers. The total number of branches have decreased from 892 to 650, indicating a 27.1 per cent fall.

"Looking ahead, we expect improvements in competitiveness of UAE banks on collaborative engagement with fintech startups, as the UAE emerges as a fintech hub, supported by young and savvy domestic consumers on one hand and solid infrastructure and government thrust to innovation and efficiency on the other,"  said Sharma.

As of May 2020, 21 local and 27 foreign banks operate in the seven emirates, with local bank branches accounting for 86.1 per cent of the branch network. From October 2014 to May 2020, 242 local bank branches have closed whilst the number of national banks declined. Only 68 of these bank closures can be linked to the bank mergers.

"This considerable reduction in the number of bank branches can be explained partly by the bank mergers but mainly due to the changing perceptions of customers towards digital banking," said Sharma. "Analysts predict a further possible bank consolidations in an already overcrowded market." -



Sandhya D'Mello

Journalist. Period. My interests are Economics, Finance and Information Technology. Prior to joining Khaleej Times, I have worked with some leading publications in India, including the Economic Times.

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