DIGITAL TRANSFORMATION IN BANKING
Banking in the future Digitalization in the banking sector is swiftly changing the field of play where incumbents are facing increasing competition from nontraditional entrants who are billing on customer experience as their point of sale
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hough digitalization was already apparent across the Middle East financial services sector, the outbreak of COVID-19 in 2020 accelerated the rate of digital transformation to record highs as the pandemic had a monumental impact on consumer behavior. McKinsey & Co. said that the coronavirus crisis has reshaped the global economy and society as banks face an urgent imperative to reimagine their business models amid a shift in the operating environment which is having an unprecedented impact on their bottom line. Digital transformation has been a key battleground for banks in the Middle East region – a competition
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that was intensified by the outbreak of the pandemic. Although 2020 was a challenging year for all industries, it presented an opportunity for the global financial service sector to accelerate and strengthen the digitalization of complex processes and end-to-end customer journeys across the front, middle and back offices, a trend that was already in full throttle across the region. “The next three to five years will also see an exponential increase in the volume of data generated through a more digitally native demographic and which will require advanced data science capabilities, powered by artificial intelligence, to generate
Banking and Finance news in the MEA market
customer insights and interactions, such as the use of bots to provide basic banking services,” said Dan Robinson, Head of Wealth & Personal Banking at HSBC UAE. Banks in the GCC region are exploring technological innovations and new business models that include digital banking, open banking, predictive banking, and modernization of payment systems as they seek to enhance user experience (UX) and personalization of products while they keep an eye on increasing cybersecurity concerns. Following the outbreak of the coronavirus, the Middle East region’s digital payments volumes skyrocketed, reportedly generating as much as 10 years’ worth of growth across B2C, B2B, and P2P spaces in just over 12 months. PwC said that digital payments, once a convenience, have become a necessity in these times. Similarly, aside from being a powerful enabler of transformation in how banks handle their customers’ financial information while putting control back in their hands, open banking is driving competitiveness in the financial service industry across the GCC region. “Open
