What We Learned from This Year’s Banking Technology Summit
Date: 3 November 2016 Share on Twitter Share on Facebook
The Middle East has been one of the banking world’s best kept secrets for a few years now. While the region is well known for its oil wealth and favorable tax regimes, it is also rapidly becoming a fintech hub, pioneering some of the most interesting new funding techniques on the market.
This was particularly evident at the Middle East Banking Innovation Summit which took place on the 5th and 6th of September in Dubai. Featuring major regional players such as Abu Dhabi Islamic Bank (ADIB), Banque Saudi Fransi, and Dubai Commercial Bank, it was always going to be an interesting event, as legacy brands mingled with fintech start-ups to shape the future of banking technology in the Middle East and beyond. Here are four things that we learned…
- Cyber security is a top priority
Good news for those using virtual data rooms – stay calm, you have got nothing to worry about. One of the most eagerly anticipated talks of the summit was by Sagheer Mufti, COO at ADIB. Mufti spoke on the topic of backup and recovery provisioning, a clear reference to the recent spate of cyber-attacks on banks in the UAE. Earlier this year, the UAE was identified as the target of more than 5 per cent of the world’s cyber-attacks , and just last month the cyber security firm Kaspersky warned that the Emirati banking system was particularly vulnerable to a new type of malware. These concerns were then echoed by Banque Saudi Fransi’s Roshdi Osman, who highlighted the significance of online security in his presentation on the conference’s final day. With trillions of dollars being held in accounts across the Middle East, no bank can afford the cost of a cyber-scandal, so expect to see a lot of investment in online protection in the near future.
2. Islamic banking is entering the digital age
Traditionally, Islamic banking follows a very simple structure – money is deposited in a shariah-complaint bank, overseen by a scholar of Islamic finance, and it is invested or loaned in accordance with Islamic values. This means that investors can’t make a profit on a borrower’s debt, and money cannot be invested in anti-Islamic products such as alcohol or pork, or activities such as pornography or gambling.
This structure has been in place for hundreds of years, delivering steady (if not exactly ground-breaking) returns. However, the rise of digital banking has led to a demand for an internet-friendly version of shariah-compliant banking, where customers can lend and borrow money safely and securely from anywhere in the world. This has been a lot of discussion on how to digitise the Islamic banking sector without diluting the structure, and technology has a huge role to play when it comes to keeping these investments on track.
3. Everybody is talking about blockchain
Just one year ago, few people had even heard of it. But now, it’s the toast of the banking world. Blockchain is a unique system of coding whereby information is stored in ‘blocks’ of data, which are instantly secured in the cloud so that the data cannot be changed. This is particularly appealing to banks who want to store account information securely, improve their record keeping and prove that they are committed to stamping out fraud.
However, while this technology has the potential to be a major game-changer, it is still in its infancy and a lot of testing will be required before blockchain can be rolled out.
4. Analytics can tell an interesting story
Mobile payments, e-banking, and cognitive technology were key topics in a number of presentations, and one core message kept on coming through – digital analysis of customer behaviors can reshape the industry.
Most Middle Eastern banks already track customer behavior patterns as part of their compliance or security measures, but this data could also be used to improve the end-user experience and even attract new customers.
IBM – a leading partner at the summit – has a strong history in analytics, and Naveed Minhas, IBM’s Banking Industry Leader in MEA and Turkey, gave an opening speech which demonstrated how the company had used its latest analytical tools at Wimbledon this year in order to enhance the consumer experience. He argued that the same tools could be used by the banking world to ensure that customers were getting everything they need out of their online banking experience. This means regularly upgrading software, enabling multi-channel accessibility, and making customers feel valued, whether they are visiting a branch or using a mobile app.