UAE digital banking sector eyes higher penetration level

The UAE banking sector, one of the world’s biggest adopters of fintech, is pressing ahead with its digital transformation drive to enable the nation make further strides in digital banking penetration level.

The UAE Banks Federation, which has been stepping efforts to promote and accelerate the digital transformation, said it remains committed to adopting the latest technologies and innovations to accelerate digital transformation and enhance the experience for consumers in the UAE, who are among the most eager in the world to embrace digital banking.

Today, the UAE ranks sixth in digital banking penetration. By the end of 2027, digital banking penetration in the UAE is projected to increase by 22 percentage points to reach 41 per cent, according to a study by Australian financial comparison website Finder. Of the UAE consumers surveyed, 19 per cent indicated having a digital bank account and an additional 15 per cent sharing intent to open one in the next year. This takes adoption to a forecasted 34 per cent in 2023.

Finder, which conducted a worldwide survey of 1,015 respondents in April 2022, found that UAE consumers to be among the most eager to embrace digital banking. The figure puts the UAE at the sixth position in terms of digital banking penetration, ahead of Mexico, Germany, the Philippines and the US.

Jamal Saleh, director-general of the UAE Banks Federation, said the federation is committed to creating conditions for this great digital transformation under the direct supervision of the Central Bank of the UAE. “As an industry, we welcome innovation and recognise that this progress requires keeping up with the latest trends in the financial sector to create solutions that meet customers' needs, which is why we are organising and launching more events and initiatives that contribute to the exchange of knowledge, expertise and skills,” Saleh said at a webinar, themed “Accelerating digital banking and fintech in UAE 2022.”

“Digitisation is currently one of the most important pillars of the global economy and organising a workshop on digital banking and technology is part of our continuous efforts to ensure the consolidation of the banking and finance sector's leadership through a proactive approach of studying and analysing global market trends. Thus, we provide platforms for discussion and sharing of opinions, knowledge and experiences to find the best solutions and processes to provide the best services to customers in a secure and seamless environment,” he added.

The UAE has several digital banks, including Mashreq Neo by Mashreqbank, Liv by Emirates NBD, Amwali by Abu Dhabi Islamic Bank, and Yap, which is reportedly the first independent digital banking platform in the Emirates. Zand is another bank that aims to launch personal banking solutions later this year.

The Finder survey findings align with other research on digital financial services adoption. Mastercard’s New Payments Index 2022 has found that 29 per cent of consumers in the UAE have used less cash in 2021.

Attended by a number of member bank representatives, the webinar provided a comprehensive overview of global trends in digitalisation and financial technology, the preferred channels for customers and ways to get the best return on investment in digital transformation, as well as improving the customer experience and digital payments.

issacjohn@khaleejtimes.com