Heading toward positive outcomes

During the unexpected epochal events of 2020, the financial sector was found to be reasonably well prepared with existing digitisation helping to absorb the blows landed by Covid-19. Nevertheless, outcomes are still underway and Bryan Stirewalt, Chief Executive of the DFSA talks with MEA Finance about the lessons learned and the changes now heading in our direction

Bryan Stirewalt, Chief Executive, Dubai Financial Services Authority (DFSA)

By Adrian Murdoch

What are the positive changes that have emerged from the COVID-19 impact in the financial services sector?

It has been fantastic to see the resilience, agility and collaboration demonstrated by the financial services industry in response to the Covid-19 pandemic. Years of investment in technology and digitalisation paid off this year. The roles of Big Tech, particularly in cloud solutions, and FinTech in the financial sector are bringing new and unexpected opportunities and challenges to the traditional market participants. Investment in technology has led the way for seamless service delivery in a remote working environment this has permanently altered the way we do business, work, and from where we work.

How essential is operational resilience in terms of crisis preparation?

Operational resilience is absolutely essential in terms of crisis preparation. Prior to the Covid-19 pandemic, the DFSA ran regular stress test activities to ensure that systems, programs and teams could function effectively in a remote working environment. We were able to move from to a fully remote working arrangement in a seamless fashion.

During 2020 and continuing on into 2021, our number one priority – and the reason for our resilience – has been our most valuable resource, our people. As the pandemic started to worsen in March, we focused our immediate attention on the health and safety of our team, implementing remote working and split team protocols to ensure the wellbeing of DFSA staff and their families. We also fully implemented an Employee governments around the world mandated social distancing and work from home policies, the financial services sector has demonstrated incredible resilience and agility. They swiftly adapted their services to ensure business continuity by investing in remote capabilities, cloud-based infrastructures and video conferencing. This shift in resource allocation further stressed the importance of stakeholder partnerships for efficient and effective regulatory oversight. Enhanced control and supervision of the financial ecosystem are only possible

with knowledge and expertise exchange between the two. Similar to the successes of public / private partnerships in fighting financial crime, these partnerships will be critical in dealing with cyber risks issues as well.

Wellness Programme, which was already in discussion before the pandemic began. Thanks to the commitment of our staff and the capability of our IT systems, the DFSA has functioned as normal, with little disruption to our everyday activity. In our discussions with stakeholders over the course of this year, we know that the firms have followed a similar strategy of protecting people first.

The wider DIFC community has also demonstrated remarkable resilience over the past year. Throughout the pandemic, communication has been key. The DFSA

has been engaging with firms in the Dubai International Financial Centre (DIFC) to ascertain the impact of the COVID19 pandemic on their operations and support them. We held outreach sessions with key stakeholders and reached out to every authorised firm – more than 500 of them – to assess their financial and operational resilience and need for any assistance over the course of the year. The DFSA believes strongly in fostering the wellbeing of the DIFC, as a community.

WE WERE ABLE TO MOVE FROM TO A FULLY REMOTE WORKING ARRANGEMENT IN A SEAMLESS FASHION

How important are stakeholder partnerships in financial services? Will we see more of these this year?

Public-private partnerships will continue to play an important role in the industry as we move into a more digital society. We have seen that over the last year as

The financial services industry saw acceleration in digital adoption last year, how will this continue in the year ahead?

For the past 10 years, since the previous crisis, the financial services industry has been investing significantly in technology. This has paid off tremendously in terms of financial and operational resilience in dealing with the pandemic. It is quite clear that the future of finance is based on technology. Over the past year, we have seen a clear acceleration to more digitalised platforms for almost every

industry. The financial services industry has to adapt to the fact that people want instant access and excellent customer service 24/7, as that is the future of the industry. This will continue in 2021.

With digital acceleration comes cyber threats and attacks, how can the industry stay protected against this?

As financial institutions continue to advance in their digital transformation and increase the sophistication of their cybersecurity, cyber criminals will also increase their efforts and sophistication. No matter how strong a company’s cyber defences are it will still have

vulnerabilities. Firms must remember that cyber resilience goes well beyond purchasing the right software and hardware through the IT department. The Human Resources department also plays a significant role in cyber resilience through training, development and awareness. This must also play a larger role in overall governance of every company, not just financial institutions.

Public-private partnerships, particularly with regards to information-sharing are a valuable tool in cyber resilience. The DFSA’s Cyber Threat Intelligence Platform (TIP), the region’s first regulator-hosted threat intelligence platform, was created with this in mind. Cyber insurers are also raising cyber awareness, assisting companies in reviewing their cyber environments, and to reduce control gaps in order to reduce claims costs and cyber insurance premiums.

FIRMS MUST REMEMBER THAT CYBER RESILIENCE GOES WELL BEYOND PURCHASING THE RIGHT SOFTWARE AND HARDWARE THROUGH THE IT DEPARTMENT

Over the past year we have seen a rise in the consolidation of financial institutions, are we expected to see more of this in the years ahead?

The last few years have seen greater consolidation in the banking and investment business sectors in the region. More mergers are a possibility. Firms may decide that joining with others is the best way to deal with the multiple challenges of the economic consequences of the pandemic, whether this is in terms of tackling the uncertainties around the development of the global economy or addressing cyber risks or the need for increased investment in technology and upskilling.

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