Financial technologies (financial technologies) are disrupting financial markets around the world and have become the driving force to have a direct impact on the activities of banks or the financial results of their clients.
Fintech are start-ups that offer original ideas and use the Internet and mobile technologies to create new or superior banking products at a faster rate and at significantly lower cost.
Are UAE banks prepared for the emergence and proliferation of fintechs?
Miguel Rio Tinto, information director of Emirates NBD, told LaComparacion Middle East that Emirates NBD is aware of the growth of fintechs in the world and sees that many companies come from abroad, since the country has a strategy to attract new companies and talents.
The Dubai International Financial Center and the Abu Dhabi Global Market play a key role in the growth of fintech in the UAE.
(Image credit: Emirates NBD)
"Fintech is willing to work with banks because we have a strong customer base, strong balance sheet, and access to resources and funds. Bank offerings in the UAE are quite sophisticated compared to other regions." Miguel Rio Tinto, Director Information at Emirates NBD
Threaten settlements
"The UAE is a very good infrastructure hub for technology. We have a lot of fintechs coming in, locally and abroad," Tinto said.
In addition, he said that small companies, which are more agile than large banks, implement technologies and become a threat to banks established in specific business areas.
After seeing what has happened in the last four years around the world, he said that Emirates NBD had started the digital transformation to compete with fintechs.
"These fintechs are very positive for consumers and the market. They intervene to solve a type of problem posed by the consumer in order to win customers by offering them better prices and at a lower cost. There are a number of areas of activity in which banks are well established such as currency exchange, loans, cards and payments, but fintechs bring very valuable propositions to consumers. " he stated.
However, he said banks must react and focus more on the consumer. While this puts some pressure on banks, he adds that it is good for consumers.
Emirates NBD has launched Liv, the first UAE-based app bank, with millennia in mind and how best to serve them as traditional methods.
Liv has around 200,000 clients and plans to launch the service outside of the UAE.
"We open 10,000 new accounts every month, more than the main branch. The rewards program associated with the Liv card is not developed by Emirates NBD, it is in partnership with Verrency, an Australian-based fintech company," he said.
Looking for opportunities in the future
Emirates NBD has established links with some 20 fintechs across many services and is also exploring opportunities in the future.
While these fintechs solve problems, he said that he prefers to become a partner with banks and vice versa, and that there is a kind of cooperation here, not only in retail, but also in companies.
"Fintech is willing to work with banks because we have a strong customer base, a strong balance sheet, and access to resources and funds. Banks' offerings in the UAE are quite sophisticated compared to other regions," he said.
However, he acknowledged that banks are currently facing competition from fintech companies in specific areas such as payments and currencies.
"Profit and customer bases are threatened and financial technologies may disrupt it. We believe that Fintech complements rather than threatens the banking institution and diversifies the existing financial system. This is the way forward for banks," Tinto said.
Big banks and fintech startups have a lot to offer, he added, adding that there will always be room for cooperation with fintechs to better serve clients.
The smart and privileged banks will try to cooperate, not keep profits and assets and do nothing that could be interrupted in the future, "he said.
Despite the growth of fintech, he said Emirates NBD had no intention of acquiring fintech because "we are not a private equity company". Until now, we have not seen the need to buy a business to access its technology or processes. But, it may not be the future for us to access a specific technology. "