It’s the Start of a New Normal for Banking in the Middle East

Paper is almost passé. Banking in the Middle East is quickly turning all touch, swipe, branchless and seamless now! And surprisingly, the change is being accelerated by the new normal brought upon by the global healthcare crisis. The pandemic has set the wheels in motion for the already rampant changes that were taking place in the banking industry

Consider the following statistics:

  • 44% of UAE businesses adopt contactless payments for the first time during the pandemic.[1]
  • 70% of consumers in the Middle East region are now using some form of contactless payment methods, according to a Mastercard report.[2]
  • The National Bank of Oman encouraged users to make contactless payments while PayBy and First Abu Dhabi Bank (FAB) joined hands to launch a secure mobile payment app in the UAE. [3]
  • The Dubai office of the 220-years-old Swiss private bank Lombard Odier, known for its tech savviness, added digital onboarding for 3000 of its customers during the pandemic. [4]
  • The Saudi Arabian Monetary Authority (SAMA), as part of the Kingdom’s 2030 Financial Sector Development Program, welcomed nine new FinTechs into its regulatory sandbox in April 2020 taking the number to 30.[5]

All of the above illustrate a clear shift to a stronger digital ecosystem. And driving this quickly changing landscape are several innovations and changes, such as Open Banking/API Banking, PFM, e-KYC/Digital Onboarding, Social Banking, and Account Aggregation, to name a few.

Take Open Banking which is a shining example of digital change in the banking and financial services industry. It has been steadily trending all over the world. In the Middle East it brings immense promise due to the high smartphone penetration rate. More than 92% of the people in

UAE use smartphones![1] The practice which provides a secure way for consumers to give providers access to their financial information, true to its name, opens the way for a multitude of new products and services.

In the Middle East region, the open banking revolution is just taking off. The Kingdom of Bahrain set up the first Open Banking regulatory framework in the Middle East. The resultant national electronic wallet BenefitPay reported a 1257% rise in the number of remittances through its Fawri+ service during March 2020—worth BHD103 million ($273 million).[2]

eKYC and Digital Onboarding is another huge area of opportunity in the Middle East. Your customer is tech-savvy and spoilt with the user-friendliness that popular social media apps provide. 70% of online banking customers in the GCC are under 40 years of age and fall under the category called Generation Facebook, according to research by Kearney.[3] They want a similar simplified onboarding solution when it comes to banking and financial services—something as easy as using their smartphone to book a ride or order a meal. You on the other hand require faster, smoother and secure processes that meet all regulatory compliance guidelines.

So why not employ digital to the job? Observing the trends in the Middle East region which saw online payments penetration increase to 76%[4] and smart phone penetration rise 133%[5], governments are starting to take action. With governments across the GCC relooking their privacy and banking guidelines, banks and financial organizations have to start now before the digital train leaves the station.

The financial landscape in the Middle East is changing and doing so at unprecedented speed. The potential for you to rethink the way you connect with your customer—whether through a multibank PFM tool that enables end-to-end financial management or through Family Banking that breaks down silos in spending and saving—is vast. The question is: Are you ready to provide your customer with the banking and financial experience they want?

Partner with Clayfin and stay ahead!

Yes! It’s clear that the ongoing healthcare crisis has accelerated incentives for economic transformation and adoption of digital business models, including increased use of digital

financial services (DFS). Deloitte’s 2020 Middle East Fintech Study [1] confirms this. A majority—82%—of banking customers Middle East are open to start using FinTech solutions, however the present number of users is only 22% of Middle East. It’s easy to see the significant growth potential to address this gap. Are you ready to get a head-start?

Clayfin, a prominent banking and financial services provider in the Middle East is partnering with banks to fast-track the evolution of their digital service offering and their internal digitalization programs, to provide the experience that customers want.

[1] https://www2.deloitte.com/om/en/pages/financial-services/articles/fintech-solutions.html

[1] https://www.thenationalnews.com/business/technology/abu-dhabi-based-payby-launches-mobile-payment-services-in-uae-1.999323

[2] https://www.bahrainedb.com/latest-news/gcc-set-for-fintech-surge-during-global-covid-19-outbreak/

[3] https://www.co.kearney.com/nl/web/guest/financial-services/article/?/a/online-banking-in-the-gcc

[4] https://www.broad-group.com/data/news/documents/b1ml462ngstyfc

[5] https://www.menabytes.com/fintech-report-global-ventures-mena/

[1] https://www.pymnts.com/bank-regulation/2020/report-helping-online-merchants-comply-with-the-middle-easts-new-payments-regs/

[2] https://www.businesschief.eu/corporate-finance/mastercard-consumer-move-contactless-payments-mea

[3] https://www.arabnews.com/node/1695861/middle-east

[4] https://gulfnews.com/business/banking/covid-19-accelerates-digital-transformation-at-private-banks-1.1593942420612

[5] https://www.fintechfutures.com/2020/04/saudi-arabias-fintech-sandbox-welcomes-nine-more-start-ups/#:~:text=The%20Saudi%20Arabian%20Monetary%20Authority,fintechs%20into%20is%20regulatory%20sandbox.&text=The%20sandbox%20is%20home%20to,2030%20Financial%20Sector%20Development%20Program.

Jishith Gangadharan

Jishith GangadharanJishith is a marketing strategist with more than 16 years experience in IT industry. He has extensive experience across various facets of marketing in the industry. Jishith spearheads marketing and communications for Clayfin. Outside office, he enjoys travelling, reading and aquascaping.