Has the digital boom affected the banking and finance industry in the gulf?

The prominence of fintech along with a shift in consumer preferences have disrupted the banking and finance industry across the Middle East and North Africa (MENA) region. This was further reinforced by the government pushing for digital transformation in the financial services industry in order to remain competitive globally whilst keeping pace with evolving customer preferences.

According to the International Data Corporation, the Middle East, Turkey and Africa (META) region is expected to spend $20 billion on digital transformation initiatives this year and up to $40 billion by 2022.

The United Arab Emirates (UAE) government has allocated substantial spending to digital innovation and raised a number of private investments to ensure that the UAE establishes itself as the financial hub in region. To-date, approximately 30% of MENA’s fintech firms are based in the UAE.

Likewise, Saudi Arabia is also investing heavily in digital banking and has led new and innovative banking models in line with its Saudi Vision 2030 goals. Saudi Arabia actually holds the highest user rate when it comes to regional banking customers with 76% of Saudi banking customers using digital platforms and 60% using online and mobile apps.

What are the key digital projects that banks have launched recently?

In the UAE, banks have been quick to embrace opportunities that came along with digital innovation. According to Abdul Aziz Al Ghurair, CEO of Mashreq Bank and Chairman of the UAE Banks Federation:

“The UAE banking sector has joined the global trend of technology transformation, digitisation and innovation that is sweeping financial services sectors around the world. Customers in the UAE are fast in adopting digital banking services”.

Banks in the UAE have launched a number of key digital initiatives over the year, namely:

• Liv. – a digital lifestyle banking app that integrates the user’s lifestyle preferences with banking, thereby helping them keep track of their daily life and their finances on one app. The app is launched by Emirates NBD and targeted at millennials. Since February 2019, Liv. has also partnered with RSA UAE to offer smartphone insurance;
• Moneysmart.ae – the region’s first digital community platform launched by Abu Dhabi Islamic Bank in partnership with Fido Solutions;
• CBD NOW – a mobile proposition by Commercial Bank of Dubai and targeted at millennials and tech savvy people;
• Mashreq Neo – a digital bank launched by Mashhreq Bank. This neobank has contributed almost 40% to Mashhreq Bank’s new customer base.

In other parts of the gulf, Saudi Arabia’s Alinma Bank has also launched a network of self-service digital branches, thereby enabling its customers to be issued ATM cards, open new current accounts and receive account statements. Last week, Bahrain’s Bank ABC released Fatema – the region's first-ever emotionally-intelligent digital employee powered by digital neurology and artificial intelligence.

This follows the Emirates Blockchain Strategy 2021 – another major digital project that was launched last year. Through this project, the UAE government aimed to leverage their blockchain technology and achieve 50% of its transactions on blockchain platforms by 2021.

Has this digitalisation affected the job market in the UAE?

According to the 2018-2019 Salary Survey and Review by Gulf recruiter and training institute Nadia Global, the job market is set to be extensively impacted by digital transformation with the average age of the UAE employee currently below 30. Along with packages becoming all-inclusive, younger employee expectations are also shifting and prioritising opportunities ahead of a higher salary. Common in-demand roles in the UAE in 2019 are financial planning analysts and finance managers – due to revenue forecasting being a key component of planning in the digital age; and developers – due to the increase in the number of fintech companies setting up in the UAE.

Relevantly, Abdul Aziz Al-Ghurair, Chairman of UAE Banks Federation stated that “trends like automation, new payment systems and branchless banking have hugely changed the way customers bank. This has led to structural re-organisation within banks, with fewer brick and mortar outlets, and employees being re-trained and re-deployed. Ultimately, there is an improved and more efficient customer experience”.

As more customers transition to digital services, banks have started re-structuring and digitally transforming their departments. This has led banks to hire niche talent and thereby adding further pressure on the current shortage of skilled employees in the market. In the hopes of accessing a bigger pool of highly skilled candidates, the UAE has started bringing in overseas talent through its long-term visas providing up to 10 years of residency in the country.

What new digital projects will be launched in the MENA region this year?

Along with the emergence of new technology, the UAE is planning to adopt cashless payments through the use of mobile phones to reduce the use of credit cards and paper. This is in line with the Telecommunications Regulatory Authority which reported that the UAE has one of the highest mobile phone penetration in the world. Global information company Nielsen also reported that for every 100 UAE residents, about 78 of them own a smartphone. As such, it is anticipated that the move to cashless payments will be a smooth transition given the tech savvy population and the high number of mobile phones in circulation.

Further to the above, we note the following digital projects currently in the pipeline:

•  Emirates NBD has announced that it will partner with Amazon Web Services (AWS) to use its machine learning, data analytics and Internet of Things technologies to build a personalised retail banking experience for its customers.
•  Dubai-based neobank Xpence has also revealed that it is planning to introduce a digital-only business current account for freelancers, entrepreneurs and start-ups.
•  The world’s largest Islamic bank Al Rajhi Bank has announced that it will partner with banking software company Temenos to drive its digital transformation strategy.
•  Bahrain’s Bank ABC is planning to launch a fully digital and mobile bank called Illa in late 2019.
• In a move to enable banks to develop connected digital open banking payment and information services across the MENA region, Almoayed Technologies has partnered with Moven Enterprise to launch digital banking services.

Has digitalisation impacted your career?

At Huxley, we are very passionate about finding candidates a job that will not only be a great fit with their personality – but one that they love doing too. If you would like to find out what the latest opportunity in the market is, please feel free to contact us on +971 4 436 0400 or visit our LinkedIn.

Huxley is part of the larger SThree Group and was awarded Best Fintech Recruitment Company and Best IT & Fintech Contract Recruitment Company at theGlobal Banking & Finance Review in 2018.