According to a recent report by Finastra, a tech solutions company that caters to the financial and banking sector, a large majority of financial institutions in the UAE plan to enable open banking in the next 12 months. The findings in Finastra’s ‘Open Banking and Collaboration: State of the nation survey 2020’ showed that 88 per cent of banks in the UAE expect to enable open banking in the next 12 months, and that the demand for further collaboration is driven by innovation in customer service and the customer experience. However, the main factors challenging greater industry collaboration in the region, according to those surveyed, include potential reduced control indecision-making, complex regulation, and legacy systems.
The findings also showed that banks believe a way in which future collaboration can be fostered is by ‘standardizing best practices’ across the industry, via regulators and by technology. Over 90 per cent of respondents say that the principle of collaboration has been a driver for success in their organisation, while 91 per cent agree or strongly agree that it has helped make their business more efficient. In addition, 57 per cent of respondents said that open banking will have the greatest impact on corporate banking, followed by retail banking and payments.
Wissam Khoury, SVP and general manager at Finastra, said: “It is encouraging to find strong levels of support for the principles of industry collaboration and open banking within the UAE banking community.” He added: “The biggest benefit for the masses is that open banking changes how banks handle customers’ financial information, putting control back in the hands of the customer. We believe that it will be the first step towards open finance which will see the next wave of innovation in financial services being created on open platforms, using open APIs and open software solutions. And we foresee a future where fintechs, systems integrators and academic institutions will work with banks to create new applications across all areas of financial services, incorporating the latest technologies such as machine learning, AI and blockchain.”