Finastra research reveals that nearly nine out of ten (88%) financial institutions in the UAE plan to enable Open Banking in the next 12 months. The demand from UAE banks for further collaboration is driven by innovation in customer service and the customer experience. However, the main factors challenging greater industry collaboration in the region, according to those surveyed, include potential reduced control indecision-making (48%), complex regulation (47%) and legacy systems (46%).
The findings are revealed in Finastra’s ‘Open Banking and Collaboration: State of the nation survey 2020’, which was conducted before the Coronavirus outbreak amongst 774 financial institutions across the United States, United Kingdom, Singapore, France, Germany, Hong Kong and the UAE. More than 100 responses were gathered from financial institutions in the UAE.
Key UAE findings include:
- Banks believe a way in which future collaboration can be fostered is by ‘standardizing best practices’ across the industry, via regulators (69%) and by technology (53%)
- Respondents are overwhelmingly favorable towards the principle of collaboration: 94% agree or strongly agree it has been a driver for success in their organization, while 91% agree or strongly agree it has helped make their business more efficient
- Open Banking will have the greatest impact on corporate banking (57%) followed by retail banking and payments (both 51%)
- Just under half (48%) of UAE financial institutions find ‘reduced control in decision making’ a barrier to collaboration, the most out of every country surveyed
Wissam Khoury, SVP and General Manager MEA and APAC at Finastra said, “It is encouraging to find strong levels of support for the principles of industry collaboration and Open Banking within the UAE banking community. The biggest benefit for the masses is that Open Banking changes how banks handle customers’ financial information, putting control back in the hands of the customer. We believe that it will be the first step towards Open Finance which will see the next wave of innovation in financial services being created on open platforms, using open APIs and open software solutions. And we foresee a future where fintechs, systems integrators and academic institutions will work with banks to create new applications across all areas of financial services, incorporating the latest technologies such as machine learning, AI and blockchain.”