A ‘global leader’ in financial services innovation in the UAE


A ‘global leader’ in financial services innovation in the UAE

Finastra research shows that open banking is seen as very important in the UAE, with four out of five financial institutions (80%) considering it a “must have”, up from 68% last year.

In the context of data sharing, 71% of respondents see their expansion of Open Finance as a “must have”, a significant increase from 50% last year. Both figures are significantly higher than any other market surveyed.

Some 94% of respondents noted that it is already driving collaboration and having a positive impact in the UAE, demonstrating the industry’s growing interest in adopting an ecosystem model.

The Financial Services: State of the Country Survey 2022 also found that environmental, social and governance (ESG) initiatives are on the board-level agenda in the UAE. 96% of respondents said ESG is important, and almost all (99%) agreed that financial institutions have a responsibility to support the communities they serve, up from 88% last year.

inclusive industry

Both figures are higher than other markets surveyed, underscoring the region’s commitment to creating a sustainable and inclusive industry. Relatedly, the UAE also has the highest demand for green loans, with 94% seeing it as an opportunity for growth and income generation.

The study was conducted among 758 professionals at financial institutions and banks in France, Germany, Hong Kong, Singapore, UAE, UK and US from August 2022 to September 2022. It explores the opening up of banking and finance, the technologies and initiatives that will impact financial services over the next year, and the growing importance of ESG.

Additional insights include:

• UAE leads in Banking as a Service (BaaS) and Embedded Finance – 95% of UAE institutions agree that BaaS and Embedded Finance have become customer expectations or needs, higher than any other region surveyed. 41% have improved or deployed BaaS in the past year, while 40% have embedded finance. The discrepancy between expectations and adoption suggests that bringing solutions to market will continue to be a key focus for institutions.

• Outdated thinking remains a major barrier – almost two-thirds (63%) of UAE institutions say outdated thinking and/or practices are the biggest barrier to innovation. Furthermore, it is the only region to see culture as a major barrier to collaboration, with ‘cultural change’ (46%) and ‘internal culture’ (43%) being the top two barriers.

• Institutions are continuing to invest in technology:

*The UAE is leading the way in their journey to the cloud, with nearly two-thirds (63%) putting all or most of their software stack on cloud-based solutions, and another 23% in the cloud And evenly split between native solutions.

*The main drivers of technology spending in the UAE are seen as increased risk visibility and agility to adapt to market changes.

• The region is feeling the economic pressure more than any other market – 91% of UAE respondents indicated that the current economic situation is limiting their technology investments. However, the region is also the most optimistic, with more than two-thirds (67%) of institutions expecting investment to recover by the end of 2022.

open finance

“Finastra has long advocated for open finance as the key to unlocking the potential of individuals, businesses and communities everywhere,” said Simon Paris, Finastra CEO. “In the years we have conducted this survey, we have seen By the time open finance grew from an emerging idea to a clear priority for institutions around the world, as it did, enabling business model shifts, such as embedded banking, and financial inclusion and equality.

“This year this year is particularly evident in the UAE, where our survey shows a marked increase in the region’s interest in openness and collaboration, as well as the willingness to move the ESG agenda forward, compared to last year.” — trade arab news agency

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