Dubai: Dubai International Financial Centre (DIFC), the leading international financial hub in the Middle East, Africa, and South Asia (MEASA) region, has organised the second Dubai FinTech Summit (DFS) Dialogues, powered by the Innovation Hub. The event was attended by the heads of 10 leading regional banks and FinTechs, who discussed the challenges facing the financial sector and deliberated on how the industry can de-risk and build resilient, sustainable financial institutions.
Based on recent analysis by Report Ocean, the global FinTech Lending Market was valued at approximately $573.05 billion in 2021 and is expected to grow at a rate of more than 27.4 percent over the forecast period of 2022–2029.
As an industry predicated on confidence and trust, we are currently seeing the banking sector experience a time of disruption. Given global headwinds, we have an opportunity to build more resilient institutions through collaboration between banks and FinTechs. 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 should move forward.
Mr. Mohammad AlBlooshi, Head of DIFC Innovation Hub and FinTech Hive, commented.
Banks vs. FinTechs
According to the DIFC FinTech Hive’s 2022 FinTech Report, the FinTech sector, widely recognised as a major competitor to banks, is expected to double in size from $135.9 billion in 2021 to $266.9 billion in 2027. In addition, FinTechs have been playing a crucial role in promoting inclusive economic growth in the region, with approximately 50 percent of the MENA region currently unbanked or underbanked.
Mr. Sanjay Sethi, Senior Managing Director and Head of Global Transaction Banking at First Abu Dhabi Bank, observed that “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.”
Technology: Disrupting and enhancing trust
Mr. Raman Thiagarajan, CEO and Founder, Zenda, noted that “as a FinTech services provider, the core, as with any tech player, is to build an emotional connection with the end consumer.”
According to Mr. Anand Krishnan, Head of Technology at Emirates Investment Bank, it is increasingly important that banks continue to invest more in technology that not only builds but also maintains trust with customers across their entire journey.
Google predicts that the financial services and banking industries will emerge as the primary users of AI technology in the MENA region. The industry holds nearly 25 percent of all AI investments in the region, with banking technology alone expected to contribute 13.6 percent to the region’s gross domestic product by 2030.
Mr. Mehdi Tazi, Chief Operating Officer, Lean Technologies, commented that “I believe customers still trust banks more than FinTechs since they are larger, more established institutions. However, something FinTechs do very well is streamline 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.”
According to Mr. 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.”
Mr. Nilay Singh, Chief Executive Officer, State Bank of India, DIFC, pointed out that “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.”
Through having a unified goal to enhance inclusive, stable banking solutions for the region, traditional financial establishments are highly optimistic about their partnerships with promising FinTechs in order to bridge gaps and strategically stay ahead of the curve.