DUBAI — Seventy percent of the participants in a FinTech survey conducted by EY showed that the GCC banking sector is open to integrating FinTech innovations that could help enhance consumer experience and streamline their operations. More than 60% of the participants thought that FinTech innovations could help them enhance consumer-centricity and reduce cost.
The EY survey looked the views of conventional and Islamic banks in the GCC towards FinTech related matters and their perception on the impact that FinTech could have on the GCC banking sector.
Two-thirds of the survey respondents suggest that the GCC banking sector is highly likely to collaborate with or invest in FinTech companies to work together with them to meet end consumers’ needs.
Gordon Bennie, MENA Financial Services Leader, EY, said: “The pace of FinTech innovation in the GCC has been extremely rapid over the past few years but still requires more work on-ground to truly revolutionize the banking industry. The variety of ways in which FinTech innovations are being adopted by the banking sector is increasing and we may even see banks collaborating to build ‘shared-cost FinTech solutions’ in the future.”
Participants indicated that the leadership teams in the GCC banking sector generally support digital transformation innovation; 57% of participants stated that they agree with the statement “digital transformation through FinTech innovations is a strategic initiative that is championed by the board of directors and the senior management team.” However, the implementation of new technologies to diversify offerings does not seem to have moved as quickly; 79% of the survey participants seemed to be in doubt if FinTech players could cause any noticeable disruption in the GCC banking sector in the next one to two years.
Ashar Nazim, Partner, Global Islamic Banking Center, EY, said: “The drive towards incorporating FinTech into everyday banking is promising, but there is still work to be done in generating more awareness around FinTech innovations and implementation.”
This is not surprising given that FinTech is a rather recent phenomenon. Two-thirds of the survey participant banks had either not had any substantive discussions within the organization or had just begun addressing the issue of digital transformation to prepare an actionable work plan to address the challenges and opportunities posed by FinTech innovations.”
With the increase of mobile penetration in the region and a young population, there is a clear preference among millennials for conducting their financial services on an end-to-end digital platform. 68% of participants felt that the banking sector might need to evolve toward a digital ecosystem to remain at the forefront in a rapidly changing business environment because of FinTech innovations.
“Bankers are noticing that a new generation of customers, one that has an increased trust in online platforms, are keen for real-time and off-site solutions. In fact, between 60% and 75% of the survey participants believe that FinTech innovations offer end customers a noticeably better value proposition, in terms of ease of use, cost, speed of service and integration with social media. This shifts the concept of FinTech from a possible option for financial institutions to implement, to a necessity if they want to continue to gain market share,” Ashar noted. — SG