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The heads of 10 leading banks and fintech companies dissected the challenges facing the financial industry in a dialogue at the Dubai Fintech Summit (DFS), and explored how the industry can reduce risk and build resilient, sustainable financial institutions.
According to a recent study by Report Ocean, the global fintech lending market is valued at approximately USD 573.05 billion in 2021 and is projected to grow at a healthy growth rate of over 27.4% during the forecast period 2022-2029.
Mohammad AlBlooshi, Head of DIFC Innovation Center and FinTech Hive, who moderated the roundtable, said: “As an industry built on confidence and trust, we are currently seeing a period of disruption in banking. Collaboration between banks and fintechs builds more resilient institutions.”
Commenting on the meeting, he added: “Through events such as this roundtable and the inaugural Dubai Fintech Summit in May, we are facilitating avenues of dialogue and collaboration between long-standing financial institutions, regulators and up-and-coming entrepreneurs, to collectively plan how the industry can – and should – move forward.”
The age of banking and fintech is over
The fintech industry, widely regarded as a major competitor to banks, is expected to grow from $135.9 billion in 2021 to $266.9 billion in 2027, according to DIFC FinTech Hive’s 2022 FinTech Report. Furthermore, as around 50% of the MENA region is currently unbanked or underserved, fintech companies have been playing a vital role in promoting inclusive economic growth in the region.
However, what all banks have come to the same conclusion in the DFS dialogue is how symbiotic these two entities actually are.
Sanjay Sethi, Senior Managing Director and Head of Global Transaction Banking at First Abu Dhabi Bank, said: “This is an era of collaboration and co-creation where leading financial institutions and pioneering fintech companies can embark on a journey of innovative discovery together. This is especially true as we look for opportunities to expand into new geographies, enhance product capabilities, increase revenue, or expand or optimize our business faster and more efficiently.
influential progress
“Beyond this, fintech solutions in transaction banking are becoming more flexible every day. Going forward, FAB will continue to partner with leading fintech companies to bring impactful advancements to the entire financial industry .”
Earlier this year, the UAE Central Bank announced the implementation of its digital dirham digital currency strategy, which is expected to be a key step for the country’s payments industry, which will have a profound impact on banks, fintech companies, businesses and customers. “Therefore, as the industry moves towards a cashless economy, synergies between banks and fintechs are proving to be inevitable,” AlBlooshi added.
Technology: Destroying and Enhancing Trust
Raman Thiagarajan, CEO and founder of Zenda, said: “As a fintech service provider, like any technology company, at its core, it is about creating an emotional connection with the end consumer.”
As customers shift to technology, banks are being forced to adapt traditional trust building to complement the digitization of banking. Anand Krishnan, Head of Technology, UAE Investment Bank, said: “It is increasingly important for banks to continue investing in technology to not only build but maintain trust with customers throughout their journey.”
Google predicts that financial services and banking will be the main spenders of AI technology in the Middle East and North Africa. The industry will account for nearly 25% of all AI investments in the region, and banking technology alone is expected to contribute 13.6% to the region’s GDP by 2030.
reliable bank
Mehdi Tazi, Chief Operating Officer of Lean Technologies, said: “I believe customers still trust banks more than fintechs – they are bigger, more established institutions. However, what fintechs do well is helping customers access these Big banks are simplifying processes. So we see a marriage between fintech and banking that can improve the customer journey and ultimately build trust.”
The advent of Web 3.0 has brought about a transformative moment for the financial services, capital markets, and banking industries, changing customer expectations and revolutionizing the industry. The total transaction value of embedded finance is said to be $7 trillion by 2026: a key industry disruptor, according to Cloud4u CEO Rakesh Reddy. “
Nilay Singh, CEO, State Bank of India, DIFC, noted: “We cannot ignore AI. It has to be adopted smartly and effectively, and this is where we need to understand what to outsource and when to partner.”
Dubai is gearing up for continued growth and innovation, so how can policy makers, entrepreneurs and investors come together to grow further during these turbulent times? With a unified goal of strengthening inclusive, stable banking solutions in the region, traditional financial institutions are increasingly optimistic about developing partnerships with promising fintech companies to help close the gap and stay strategically ahead. — trade arab news agency
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