Interview: Ahmad Abu Eideh
What has been the banking sector’s response to recent shifts in the global economic landscape?
AHMAD ABU EIDEH: The banking sector has witnessed a multifaceted response to the current global economic landscape. Lenders have been navigating a high-interest rate environment, which is challenging for legacy institutions that have historically offered premium rates in order to attract deposits. To adapt, banks have been conducting repricing exercises, balancing the need to attract depositors with efforts to manage the expenditure of their loan portfolios.
Furthermore, Sharjah’s banks have shown resilience during post-Covid-19 pandemic operational shifts. They have resumed business as usual, successfully adapting to the new normal. Even as some firms faced difficulties due to structural issues exacerbated by the pandemic, the supportive policies of the Central Bank of the UAE (CBUAE) have facilitated a strong recovery in the sector.
Lenders have also had to contend with global disruptions, such as various supply chain-related challenges. Local banks have managed these effectively, leveraging the UAE’s strategic position as a regional centre for trade. This adaptability is a testament to banks’ strategic planning and responsiveness.
In what ways is the banking sector adapting its services and operations to remain competitive in light of ongoing technological advancements?
ABU EIDEH: Banks are embracing a comprehensive digital transformation that involves a fundamental shift by transitioning to cloud-based platforms. This paves the way for increased operational efficiency, and ensures greater agility in product and service delivery. By moving operations to the cloud, banks can scale their services up or down based on the level of demand, thereby managing resources effectively and ensuring they can respond to market changes faster.
Integrating artificial intelligence (AI) into banking operations is another component of this digital shift. AI is being used to enhance customer interactions, personalise financial advice, and improve risk management through more sophisticated and predictive analytics. It also plays a crucial role in combatting fraud and strengthening cybersecurity.
Furthermore, banks are keenly aware of the importance of serving digital-savvy younger generations and are redesigning the user experience to be more intuitive and engaging, as well as accessible through mobile devices. This includes developing apps that offer a broad range of services, from conducting basic account management to complex financial transactions, all with a few taps on a smartphone.
How do you assess the relationship between banks and financial technology (fintech) companies?
ABU EIDEH: The banking sector considers fintech companies to be essential partners that drive innovation. This collaborative stance is anchored in the recognition that fintechs bring agility and creativity that can enhance banks’ capabilities to provide advanced financial services. The connection between the traditional banking sector’s experience and the innovative drive of fintech companies is thus able to create a dynamic and responsive financial ecosystem.
This partnership is particularly relevant as banks look to serve new generations entering the workforce, who expect seamless, digital-first banking experiences. In Sharjah, where there is a confluence of culture, education and technology, banks are tapping into fintechs’ expertise to develop financial products that resonate with customers’ digital-native preferences.
The CBUAE’s supportive stance towards this collaborative environment suggests a regulatory framework that understands the necessity for banks to incorporate emerging technologies in their work to stay competitive. By fostering this relationship, the CBUAE helps lenders harness fintech innovation, while also ensuring financial stability and consumer protection.
Read More from OBG
