Dubai FinTech Summit Dialogues examine financial sector challenges

AMMAN — Dubai International Financial Centre (DIFC), the leading international financial hub in the Middle East, Africa and South Asia (MEASA) region, hosted the second Dubai FinTech Summit (DFS) Dialogues last week.

Heads of 10 leading regional banks and FinTechs were invited to unpack the challenges facing the financial sector and deliberate on how the industry can de-risk and build resilient, sustainable financial institutions, said a statement from the organisers.

According to recent research by Report Ocean, the global fintech lending market was valued at approximately $573.05 billion in 2021 and is anticipated to grow with a healthy growth rate of more than 27.4 per cent over the forecast period 2022-2029.

Hosting the roundtable, Mohammad Al Blooshi, Head of DIFC Innovation Hub and FinTech Hive, said: “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 can — and should — move forward,” he added.

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, according to DIFC FinTech Hive's 2022 FinTech Report.

Additionally, with approximately 50 per cent of the MENA region currently unbanked or underbanked, fintechs have been playing a crucial role in promoting inclusive economic growth in the region.

However, a unanimous takeaway from all banks at the DFS Dialogue captured how both entities are in fact symbiotic.

Sanjay Sethi, Senior Managing Director, Head of Global Transaction Banking at First 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 Digital Dirham 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 asthe industry inches towards a cashless economy,” added Blooshi. 

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 digitisation of banking. Anand Krishnan, Head of Technology, 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 forAI technology in the MENA. The industry will make up nearly 25 per cent of all AI investments in the region, with banking tech alone expected to contribute 13.6 per cent to 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 $7 trillion 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,” he said.

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.”