Digital banking trends that will influence the Future of Banking Industry in UAE

Technology has been playing an ever-expanding role in the development of banking industry. Digitization in the banking sector is achieving considerable and tangible advantages in customer service, product development, and in other areas. Today, we see that banks are progressively utilizing advanced innovations to enhance their risk assessment and drive income.

Customers are progressively open to banking innovations driven by technology, private players are making significant ventures and government regulations are leading the charge. This is foremost to more financial incorporation everybody accesses propelled managing banking services and an extensive variety of financial offerings. In the Middle East region, most of banking customers consider smartphone as the most preferred mode for digital banking. Banks in the UAE are reacting to consumer preference by increasing their investment in digital innovation, concentrating particularly on enhancing their mobile banking security and user experience.

The following are some of the trends that could become major game changers in 2018. These trends are certain to play a key role in this transition.

Open Banking:

Open banking is a connected ecosystem of financial services, wherein third party developers use open APIs to build applications or services for financial institutions that allow banks to rapidly and securely enhance their digital offerings. With more APIs disclose by banks, the way toward completing payments and other banking transactions would be significantly quickened as well as simplified. The UAE Banks Federation has been driving activities in building an open banking platform that will interface the member banks with governmental department and ecosystems, for example, the Emirates Identity Authority.

Advanced Mobile Banking

A few banks are currently providing a downloadable customer solution that mobile subscribers can use to get to bank services. For customer convenience, most of the banks have developed their own banking app with the help of mobile app development companies Dubai to offer a reliable channel and enable customers to execute transactions like funds transfer, bill payments, track latest transactions, receiving notifications from bank, etc. Saudi Arabia and the UAE leads the way with a mobile banking adoption rate of 60 per cent and 52 per cent, respectively.

Banks ensure that their applications for mobile banking meets consistent ease of use and security tests to pick up an aggressive edge over others. Personalization, Biometric checks, exhaustive functionalities are some of the mobile banking trends that are being taken after.

Blockchain

Blockchain is a distributed database, wherein a list of records continuously widens up, in the form of blocks and is secured via cryptography. It has the capacity to record anything of value and ensure an unrivalled degree of transaction security.

A few major players have just started trail projects to measure the attainability of adopting blockchain into their ecosystems. It is Dubai who is driving the blockchain charge. The emirate has sketched out its intend to become a first blockchain-powered government in the world by 2020 as part of a move to make government services more effective and empower a huge number of business openings in the private sector. 

Cryptocurrency Wallet:

Cryptocurrency wallet is a safe digital wallet with different blockchain to enable users to monitor their digital currency balance, send, receive, and conduct other operations. Cryptocurrencies will soon be a part of the international trading system. Considering this, the UAE set to get its own mobile wallet soon with the take-off of the Emirates Digital Wallet, the pace and degree of digitisation in the country is ready to quicken further.

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Why does UAE want to use Blockchain technology?

Dubai itself has looked to position itself at the edge of innovation through recent initiatives. It has announced its future plans to use blockchain technology to move all of the government's transactions online by the year 2020. In fact, ‘The Smart Dubai Office’ has won an award for its Dubai Blockchain Strategy activity.

Blockchain technology, initially designed as an appropriated database list system behind Bitcoin, has the potential to genuinely disrupt various industries and make processes peer-to-peer, transparent, secure, and proficient. It can be used by several conspicuous elements in the Emirates including healthcare providers, Dubai International Financial Centre and Dubai Multi Commodities Centre.

There are many Bitcoin mobile wallets designed by mobile apps development companies with loads of security features. They work just like an app and enable you to pay effortlessly using your smartphone. The main function of cryptocurrency wallets is to store your digital currency and provide you with a medium to exchange and transfer cryptocurrencies.

Due to Bitcoin’s flow, the total value of its currency has grown at triple-digit rates every year. It is not controlled by any central authority such as banks or governments. Whatever the genuine worth of Bitcoin, as of late it has been blockchain technology that has seen the greater part of investment from banks, governments, and large organizations, because it reduces the risk of fraud. Without a doubt, the future of Blockchain looks bright, and dynamic in a volatile way.

The blockchain technology can be used as a platform to build helpful applications, which can be mended with solutions in the field of retail payments, infrastructure, trade finance and syndicated loans, settlements, capital markets, and consistence activities.

According to a report from Financial Times, six of the largest banks in the world partnered to create a new form of digital cash that would assist in clearing and settling financial transactions over blockchain-based platforms. The Global Blockchain Council includes 32 individuals including government entities and international organizations such as Cisco, SAP, IBM, and Microsoft, and blockchain start-ups, which are aggressively moving on towards a world powered by blockchain technology. In fact, Emirates Islamic Bank has already integrated with Blockchain technology to detect frauds in online transactions. 

The UAE government recently announced that central bank of the UAE was working with Saudi Arabia to issue a digital currency based on blockchain that would be accepted in government transactions between the two countries. This appears to be the first time two countries have consented to cooperate on such a system, which Sfeir-Tait said was “unique, and an excellent initiative for distributed leger technology”.

"Both Saudi Arabia and the UAE have made open commitments leverage blockchain technology as a major aspect of their strategy for the future. So, it is true that they are adopting a proactive strategy to explore the use of cryptocurrencies," Lobrano said.

In 2016, an innovation centre, Dubai’s Museum of the Future announced the formation of research group focused on blockchain technology. UAE is working to set up the nation as a major financial technology player and has just begun to try different things with the potential uses of blockchain in public and private sectors.

International companies, financial specialists foundations, billionaires and even a few governments have influenced it to clear that they will support and begin using blockchain technology as a whole— it gives investors and cryptocurrency holders a huge confidence boost.

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