The UAE banking sector has embraced the digital revolution with enthusiasm and purpose. Where other markets’ neo banks and digital offerings tend to be disrupters, many such businesses in the UAE are affiliated with incumbent institutions. ADCB offers a transformative digital banking experience via uBank, Mashreq launched Mashreq Neo, and FAB launched a digital wallet application called Payit, that enables UAE residents to go cashless.
The country’s central bank has made strides in digitalisation. Its instant payment platform, Aani, launched in October 2023. In February 2024, it conducted its first central bank digital currency (CBDC) transaction on the mBridge platform—a collaborative effort involving central banks in Thailand, Hong Kong, and China, as well as the Bank for International Settlements (BIS).
In the 2020s, the UAE FSI industry must balance consumers’ demands for seamless banking experiences with a range of externalities, including a rampant cyberthreat landscape and constantly changing strict regulatory frameworks. In the cloud lies a rich menu of digital tools that can help banks deliver on customer expectations but also present entry points for digital thieves and expose institutions to regulatory penalties.
Digital vs business
A global report by ServiceNow (The State of AI-Powered Transformation in Banking) shows that banking executives have been somewhat disappointed by the ROI of digital transformation despite evidence that it has unlocked value. Many respondents distinguished between simple digital transformation and business transformation driven by AI. Almost three-quarters (74%) now see end-to-end technology platforms as a prerequisite of competitiveness, and more than half (51%) believe AI will play a major role in this transformation.
The UAE has taken to AI not impulsively but steadily and with governmental forethought. It was the first nation to install an AI ministry, which promptly launched the National Strategy for Artificial Intelligence 2031. For the nation’s digitally mature banks, strategic adoption will likely reflect the international findings of ServiceNow’s study – a broad leveraging of AI and cloud technology as part of a business-focused program that accounts for regulatory issues and a long-term relationship with the banking public.
UAE consumers across many industries, from retail to utilities, require frictionless experiences. Easy-to-use interfaces, navigable pages, relevant recommendations, support when needed, troubleshooting on request, and individualisation. Banks must make it easy to become a new customer. They must make opening new accounts easy and getting loans and credit cards. They must make it easy to conduct transactions. And they must guarantee security.
A time to lead
Technology, particularly AI, has the potential to deliver on all fronts, empowering finance brands to provide convenient and personalised experiences that are also secure. If we consider that instead of catching up with neo banks, UAE institutions have partnered with them (or, in some cases, become them), then we can conclude that the country’s FSI is in a better position than many others to understand and respond to consumers’ digital needs. For example, to deliver the digital offerings available in the market today, UAE banks have already gone through the cultural changes that still lie ahead for many of their regional and international peers. UAE institutions are used to digital workflows and automation and have, in many cases, broken down the information silos that normally stand in the way of continuity and individualisation of service.
It is time for UAE banks to accelerate their transformation and lead the way in a global, sector-wide transformation that unites business and technology leaders and their strategies into a coherent digital-first vision. End-to-end platforms will be required. Indeed, ServiceNow’s global research showed 97% of respondents were already implementing such platforms, with 23% reporting they were at an advanced stage of development.
The cloud and software-as-a-service (SaaS) solutions allow businesses to scale more effectively. UAE banks that still have not fully implemented AI will find they can connect their services on a single, AI-powered, end-to-end platform further to enhance the customer experience and the employee experience.
AI is adept at managing workflows and automating routine tasks, giving employees more real-time information as they engage with customers and ensuring that those customers are always treated with the individualised care they demand. Because AI can provide relevant information without the human agent having to search for it, employees can spend their time with customers differently. Instead of rushing a voice or chat session, an agent can build rapport, ask deeper questions, and identify upselling or cross-selling opportunities.
Beyond the customer
With AI capable of transcribing and summarising customer-contact sessions, banking staff can focus on more complex problems or strategic issues that add long-term value to the business. But beyond front-end customer contact, AI has many more bank operational applications. Risk management, fraud detection, and compliance are notoriously complex areas that AI can effortlessly break down and simplify for senior executives. It can also more easily and quickly comply with regulators’ rigorous reporting standards, leading to greater transparency and smoother audits.
In all the use cases discussed here, generative AI can further enhance outcomes. As far back as mid-2023, Emirates NBD partnered with Microsoft to “transform operations” with GenAI, so we can see that UAE brands are exploring the new tech’s potential. GenAI engines are improving all the time and banks around the world are exploring the possibility of GenAI’s use in large-scale data analysis for fraud prevention and risk mitigation. Equally, the technology could be applied to compliance or IT management.
From the executives’ boardroom to the employees’ breakroom to the customer’s living room, AI has a starring role in the UAE banking story. It could be central to operations as part of an end-to-end IT platform that reinvents not only one bank but the entire UAE banking industry. This is a natural transition for UAE banks that have already spawned neo banks and digital arms of business. They can lead, and they can prosper.
