In the seventh edition of our annual publication, UAE Banking perspectives, our authors explore a spectrum of topics critical to the UAE’s banking sector in the post-pandemic period.

In the hope that the Covid-19 pandemic will be contained, and economies will overcome challenges, the UAE’s financial services sector is evolving to adopt new business resilience mechanisms. Local banks’ CEOs are focusing on a number of vital areas including digitalization, addressing regulatory issues, corporate governance, and risk management.

In particular, four key themes have emerged that appear likely to influence the sector in the coming decades. We believe that the future of the local banking industry will be : 

  • Shaped by a progressive economic and fiscal environment
  • Driven by innovative, responsible and disruptive trends
  • Reinforced by evolving infrastructure capabilities
  • Supported by connected control and risk frameworks

By leveraging digital transformation techniques, such as blockchain, Artificial Intelligence (AI) and Machine Learning (ML), banks are rapidly automating processes to offer seamless customer service within a virtual environment. A significant proportion have embraced predictive analytical models to evaluate large data sets for identifying quicker and more efficient credit, investment, and business-related decision-making methodologies.

Stakeholders also expect banks to play a part in working towards a more equitable and sustainable future. Global regulators are hence increasingly placing emphasis on evaluating organizations’ environmental, social and governance (ESG) policies.

A rise in the risk of misconduct and compliance failure over the past few years has led to enhanced focus on corporate values and governance, and organization culture. To mitigate this risk, the Central Bank of the UAE issued new Consumer Protection Regulation and Standards, aimed at contributing to the overall stability of the financial services industry.

Throughout this report, our subject matter experts highlight opportunities and share opinions on emerging trends, challenges, and growth areas in the UAE banking industry. In addition, for the second consecutive year, KPMG has partnered with social media analytics company, DataEQ to analyze the key drivers of consumer satisfaction amongst major UAE retail banks, and ascertain whether they are meeting expectations of conduct and service.

We are pleased to feature articles by two guest authors—leaders in the industry. This edition marks the first time we have obtained an economist’s viewpoint: Khatija Haque, Chief Economist and Head of Research of ENBD, offers valuable insight on the impact of Covid-19 on global markets. We are also immensely excited to have the CEO of a digital bank, Olivier Crespin of Zand, share what the future of banking looks like, and comment on the sector’s readiness for the challenges to come. On behalf of KPMG Lower Gulf’s financial services professionals, we would like to extend our warm thanks to them for contributing their experiences. 

We believe banks have emerged stronger than ever after the economic slump brought about by the pandemic. To best serve the interests of all their stakeholders, financial institutions will do well to constantly adapt their operations and compliance functions to keep pace with the maturing regulatory landscape, become early adopters of nascent technologies, and embed environmental, social and governance (ESG) into all that they do.

Performance highlights

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Highlights of the UAE Banking Sentiment

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Key banking indicators

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