On April 11, 2023, in Dubai, United Arab Emirates: The second Dubai FinTech Summit (DFS) Dialogues were held at the Dubai International Financial Centre (DIFC), the top global financial hub in the Middle East, Africa, and South Asia (MEASA) region. The event was sponsored by the Innovation Hub. The heads of 10 top regional banks and FinTechs were invited to discuss how the financial sector might reduce risk and create resilient, sustainable financial institutions while also examining the problems it faces.
The global FinTech Lending Market was estimated to be worth USD573.05 billion in 2021, and Report Ocean's most recent research predicts that it would expand at a healthy rate of over 27.4% from 2022 to 2029.Mohammad AlBlooshi, the roundtable's moderator and the head of DIFC Innovation Hub and FinTech Hive, said, "As an industry built on trust and confidence, the banking sector is currently going through a period of change. By working together, banks and FinTechs may create institutions that are more resilient in the face of global challenges.
Commenting on the session he added, “Through conveners such as this roundtable and the first-ever Dubai FinTech Summit in May, we are facilitating dialogue and avenues of collaboration for long-standing financial institutions, regulators, and promising entrepreneurs to together map out how the sector can - and should - move forward.”
The age of Banks vs. FinTechs is behind us
According to the 2022 FinTech Report from DIFC FinTech Hive, the FinTech sector, which is widely acknowledged as a significant rival to banks, is projected to double in size from USD135.9 billion in 2021 to USD266.9 billion in 2027. Additionally, FinTechs have been instrumental in fostering inclusive economic growth in the MENA region, where 50% of the population is currently unbanked or underbanked.However, a common insight shared by all banks at the DFS Dialogue demonstrated how mutually beneficial both organisations are.
Sanjay Sethi, Senior Managing Director, Head of Global Transaction Banking atFirst Abu Dhabi Bank, said, “This is an age of collaboration and co-creation where leading financial institutions and pioneering FinTechs can embark on a journey of innovative discovery together. This is especially true when we look at opportunities to expand into new geographies, improve product capabilities, grow revenues, or scale or optimise our business faster and more efficiently. Alongside this, FinTech solutions in transaction banking are growing in agility every day. As we look to the future, FAB will continue collaborating with pioneering FinTechs to deliver impactful advances across the financial industry.”Earlier this year, the UAE Central Bank announced the implementation of its DigitalDirham digital currency strategy, which promises to be a critical step in the country’s payments industry, something that will deeply impact banks, FinTechs, businesses, and customers. “As such, the synergy between banks and FinTechs proves to be unavoidable as the industry inches towards a cashless economy,” added AlBlooshi.
Technology: Disrupting and enhancing trust“As a FinTech services provider, the core, as with any tech player is to build an emotional connection with the end consumer,” said Raman Thiagarajan, CEO and Founder, Zenda.As customers turn to technology, banks have been forced to adapt traditional trust-building to complement the digitization of banking.
Anand Krishnan, Head ofTechnology, Emirates Investment Bank, said, “It is increasingly important banks continue to invest more in technology that not only builds but maintains trust in customers across their entire journey.”Google predicts that the financial services and banking industry will emerge as the primary spender for AI technology in the MENA. The industry will make up nearly 25 per cent of allAI investments in the region, with banking tech alone expected to contribute 13.6 per centto the region’s gross domestic product by 2030.Mehdi Tazi, Chief Operating Officer, Lean Technologies, stated, “I believe customers still trust banks more than FinTechs – they are larger more established institutions.However, something FinTechs do very well is streamlining processes when helping onboard customers into these larger banks.
As a result, we are seeing a marriage between FinTech and banking that enhances the customer’s journey, ultimately building trust.”The onset of Web 3.0 ushers in a transformative moment for financial services, capital markets and banking, shifting customer expectations and revolutionising the sector. The total transaction value of embedded finance is said to reach USD7 tn in 2026, as per Rakesh Reddy, CEO, Cloud4u, “This is particularly useful for Platform as a Service(PaaS) providers who will strongly benefit from this growth, undeniably becoming a key industry disruptor.”Nilay Singh, Chief Executive Officer, State Bank of India, DIFC, pointed out, “We cannot ignore AI. It has to be adopted but cleverly and effectively, and this is where we need to understand what to outsource and when to collaborate.”
Dubai is gearing up for continued growth and innovation, so how can policymakers, entrepreneurs and investors come together to further advance during these volatile times?With a unified goal to enhance inclusive, stable banking solutions for the region, traditional financial establishments are increasingly optimistic in growing their partnerships with promising FinTechs to help bridge gaps and strategically stay ahead of the curve. Join the dialogue at the Dubai FinTech Summit at Madinat Jumeirah in Dubai. Visitors can now purchase tickets with early bird prices available until 15 April 2023.
About Dubai International Financial CentreDubai International Financial Centre (DIFC) is one of the world’s most advanced financial centres , and the leading financial hub for the Middle East, Africa and South Asia (MEASA), which comprises 72 countries with an approximate population of 3 billion and an estimated GDP of USD 8 trillion. With a close to 20-year track record of facilitating trade and investment flows across the MEASA region, the Centre connects these fast-growing markets with the economies of Asia, Europe and the Americas through Dubai. DIFC is home to an internationally recognised, independent regulator and a proven judicial system with an English common law framework, as well as the region’s largest financial ecosystem of over 36,000 professionals working across over 4,300 active registered companies – making up the largest and most diverse pool of industry talent in the region. The Centre’s vision is to drive the future of finance through cutting-edge technology, innovation, and partnerships. Today, it is the global future of finance and innovation hub offering one of the region’s most comprehensive FinTech and venture capital environments, including cost-effective licensing solutions, fit-for-purpose regulation, innovative accelerator programmes, and funding for growth-stage start-ups. Comprising a variety of world-renowned retail and dining venues, a dynamic art and culture scene, residential apartments, hotels and public spaces, DIFC continues to be one of Dubai’s most sought-after business and lifestyle destinations.
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Editor- Sarah Fathima Ahmed
April 2023, CryptoniteUae