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Abdulaziz Al-Ghurair, chairman of the UAE Banking Federation, said that the assets of the UAE’s banking industry have grown 12-fold from US$75 billion in 2000 to more than US$900 billion in 2022, jumping from 70% of nominal GDP in 2000 to 100 million in 2022. More than 250% (UBF).
This puts the growth rate of the UAE banking sector on par with that of major global markets, he said at Abu Dhabi Financial Week on November 15, 2022. The event was organized by Abu Dhabi Global Market (ADGM) in partnership with the Ministry of Economic Development – Abu Dhabi, with the UAE Banks Federation participating as a strategic partner.
Speaking at the event to more than 500 prominent investors and financial sector experts from 30 countries, he said: “Emirati banks are well-capitalized and profitable, which is a prerequisite for long-term strengthening of the stability of the sector under UAE regulation. Central Bank of the United Arab Emirates.”
Essential platform
Al-Ghurair commended the strategic partnership between the Federation of UAE Banks and ADGM, which constitutes an important platform for exchanging expertise and experience to strengthen the UAE banking and financial sector through various initiatives and events.
Today, the UAE is one of the world’s seven financial centers, he said, noting that specialized financial centers, especially Abu Dhabi Global Market and DIFC, have played an important role in developing the financial sector and positioning it as a global financial center role map. At the same time, they have more than 7,000 companies employing more than 44,000 people from different countries.
Al-Ghurair highlighted the great progress the banking industry has made in developing digital solutions to provide customers with the best possible services while building a reliable and safe financial environment, explaining that local banks have invested more than US$1 billion in the past five years to Realize technology modernization infrastructure.
They now offer enhanced professional services while improving APIs, cloud computing and digital channels.
digital transformation
He added: “Digital transformation has helped to increase reliance on digital services, as more than 95% of all transactions of leading banks have been digitized, which is one of the highest in the world. Services are increasing, with leading banks now providing 90% of services via smartphones, and more than 50% of new bank accounts are opened through digital channels.”
More than 200 bank branches in the country closed, a 30% reduction, reflecting a growing reliance on digital banking. The UAE has two digital-only banks, while three operational banks have launched their own digital banks.
He commended local banks for their contribution in talent development to keep up with the needs of this growing industry, while developing appropriate solutions and innovative use of technology. As such, Emirates Bank has attracted and trained professionals including designers, systems engineers and data specialists to meet the service demands of the digital age. He further added that the sector employs more than 20,000 professionals.
Banking revenues to reach $25 billion by 2030
Al-Ghurair predicts positive and strong growth in the UAE banking sector, predicting that the banking sector will grow faster than the macroeconomic growth rate and that bank revenues, after risk provisioning, will reach over US$25 billion by 2030, a 50% increase from current revenues % to establish a sound financial position.
“The digitization of financial services will further accelerate, technology development budgets will increase to keep pace with this growth, and efficient data management and use will become a competitive advantage. Digitization requires a restructuring of the operating model; therefore, reducing branch networks is the first step .Moreover, the UAE banking sector is expected to attract many international players due to its huge growth opportunities.”
The UAE has established itself as a fintech hub in the Middle East and Africa due to significant investments in the sector.
He emphasized that the UAE has all the components needed to strengthen its position as a regional and global financial hub, with the country’s regulations and legislation characterized by innovation and in line with global changes in the sector. He noted that the UAE Central Bank recently completed the world’s most comprehensive digital currency transaction prototype. — trade arab news agency
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