Embracing digitization will help UAE banks

To sustain the competitive edge, the banking sector in the UAE has to digitize to keep pace with international standards, and retain customer base as well as reach out to young customers through the social media networking.
Corporate banks that will lag behind the digitization process could risk drop of profits, and hence lose qualified staff compared to other competitors which have already embraced the digitization.
The recent survey of corporate banking customers worldwide by the Boston Consulting Group (BCG) sounds an alarm that the Middle East’s banking
sector has been slow to adopt and transform to the digitization than other
international players.
Corporate bank management needs to set a clear digital strategy and move decisively to build critical skills and capabilities. Many youth customers have been adapting quickly to the digitization well ahead of the banking sector.
The digitization is one of instrumental tools that would help the banking
sector broaden and retain customers, as well as communicate easily with other
regional and international banks effectively.
2016 is set to be riddled with challenges for banks in the UAE, region and the world. This prospect of slowdown comes
after three years of robust growth of 8-10 per cent across the sector. Yet, this year is
expected to see both a slowdown in
borrowing, and drop in profits.
To handle the slowdown, some banks have laid off staff to cut expenses and cost. This step will be definitely followed by others to consolidate the customer base. Banks have to develop different strategies to
retain customers based on their actual needs.
The banks should promote efficiency and give incentives to qualified staff that make a difference and devise new policies to keep them afloat in the face of any risk. Indeed, experienced banks that had weathered the storm of the
financial crisis in 2008 would be more prepared to absorb any shock.
“The UAE banking sector witnessed tremendous growth, particularly in the aftermath of the global financial crisis. It is still the largest banking sector in the region with total assets exceeding AED2.4 trillion,” said the Governor of UAE Banks Federation, Mubarak Rashid Al Mansouri, at the opening speech of the third UAE Banks Federation (UBF) Middle East Banking Forum in Dubai on Monday.
Volatility of equity markets and low oil prices would create some problems to the UAE banks, yet the diversified economy and digitising of the banking
sector would provide instrumental clues that would help banks retain customer base and increase its profits.