UAE Bank revenues to hit $25bn by 2030 amid digital transformation

The financial sector in the Middle East has been affected by the pandemic’s spillover effects, fluctuating oil prices, and growing multidimensional disruptions. But despite these strains, it has managed to recover quickly. It has adopted the worldwide trend of digital transformation, digitization, and innovation and is still making noticeable strategic progress to support growth. We think the financial scene will continue to change in the years to come as a result of newer ideas, rules, and technology.
Regional banks with strong balance sheets are making significant investments in digitization to protect and expand their market shares. In fact, a few regional banks are already recognised around the world as exemplary instances of digital transformation. A few cutting-edge banks in the Middle East have excelled in the field of digital banking and demonstrated their mettle. Four of the eight Middle Eastern banks on the Top 100 Digital Bank Ranking list are from the United Arab Emirates. These banks were honoured for their extremely cutting-edge digital platforms, significantly differentiating consumer value offerings, scalability, and cost effectiveness.
The Middle eastern banking sector is undergoing a significant digital transformation, driven by tech-savvy consumers and rapidly growing technology hubs. As there is a significant association between banking growth, GDP per capita, and digital strength, the region, which is currently mostly powered by crude oil, may contribute billions of dollars to economic growth by increasing digitalization.
Around 160 million people are anticipated to utilise digital services in the Middle East by 2025, which could contribute up to 3.8% of its GDP annually1. With this, the Middle East’s banking revenue might exceed USD359 billion by 2025, growing at a CAGR of roughly 8% per year starting in 2020.
The rapid movement in consumer preference toward digital banking products will primarily benefit the retail banking industry. The need for frontline services and new digital platforms appears to be increasing, which could drive retail banking revenue to USD135 billion by 2025 at a CAGR of 9%.
In the Middle East, corporate banking accounts for 44% of the banking sector’s revenue and 55% of its assets. In order to address the complicated needs of corporate banking clients, regional corporate lenders have experienced a digital revolution and taken risky and aggressive actions throughout the years. As a result, at a CAGR of about 7%, corporate banking income is anticipated to rapidly increase to USD169 billion by 2025.
Bank Revenues to hit $25bn by 2030
According to a senior official of the UAE Banks Federation, banks in the UAE can expect their revenue to increase by 52 percent by 2030, reaching $25 billion, as the financial sector adopts extensive digital transformation methods.
Abdulaziz Al-Ghurair, chairman of the UAE Banks Federation, stated earlier at the Abu Dhabi Finance Week that the change has led to the region’s top banks registering over 95% of digital transactions, out of which more than 90% were completed on mobile devices.
Al-Ghurair indicated that in 2021, using statistics from the Central Bank of the UAE, the proportion of cash payments in all transactions fell from 69 to 20 percent while the proportion of digital accounts increased from 7 to 51 percent.
He added that the banking industry had made major technology investments and updates in response to shifting customer needs, which will result in future improvements to the customer experience.
According to the chairman, UBF has played a significant role in fostering digital transformation and solidifying the industry’s leadership in creating digital solutions, further boosting regional economic growth.
The federation underscored the Central Bank of the UAE’s tenacious role in embracing the most recent technology to enable greater financial inclusion and grow the country’s digital economy in a webinar.
“Under the direct supervision of the Central Bank of the UAE, the federation is committed to creating the conditions for this development. This progress requires keeping up with the latest trends in the financial sector to create solutions that meet customers’ needs,” said Jamal Saleh, director-general of the UBF, in a statement.
“Digitalization is currently one of the most important pillars of the global economy. It is part of our continuous efforts to ensure the consolidation of the banking and finance sector’s leadership through a proactive approach of studying and analyzing global market trends.” He added.
A conference between the CBUAE and the CEOs of UAE-based banks was conducted in June to discuss the ongoing recovery of the banking industry in the UAE, the growing significance of financial sector digitization, and financial sector emiratization projects.
The immediate payments platform and accelerated upgrading of the financial infrastructure and data centres for the payment system were among the components of the central bank’s National Payment System Strategy, which was reviewed during the conference.
Additionally, it provided a comprehensive overview of numerous projects to further Emiratize the financial industry, including plans to add 5,000 new positions to the banking and insurance sectors by the end of 2026.
The first IPO subscription app in the Middle East is launched by Dubai Bank amid a $18 billion boom
Customers of the digital bank Liv., owned by Emirates NBD, can now subscribe to an IPO immediately from an app.
The Liv. App makes investing and money management simpler than ever before by providing access to everything a banking customer needs to subscribe to an IPO.
Inside the app, users will be able to subscribe, follow listing dates, express interest in prospective IPOs, and even make IPO payments.
Innovation in IPO banking
A single interface makes it simple and quick to implement 100% paperless subscription with only a few clicks.
The app was released in response to Emirates NBD’s end-to-end IPO subscription website being launched earlier this year for individual investors.
According to figures collated by Bloomberg, IPO money raised in Europe, the Middle East, and Africa this year totaled $18 billion, roughly half of which came from listings in the Middle East, particularly in Riyadh, Abu Dhabi, and Dubai.
When the app first starts, CEO of Retail Banking & Wealth Management at Emirates NBD, Pedro Sousa Cardoso, said “IPOs are growing in popularity among our consumer base as financial literacy becomes more prominent and the investment landscape matures”.
“As a digital bank serving a population that is technologically aware, we at Liv. recognise that our consumers want a tailored, personalised experience for their financial needs.
“We are thrilled to be the first only digital bank in the region to offer this service, which will improve our customers’ investment journeys and give UAE investors a streamlined trading experience.”
The software launches at a time when initial public offerings, particularly in the UAE and the Middle East, are somewhat on the rise.
According to a government official who stated, Abu Dhabi will likely host three more initial public offerings this year and at least 11 in 2023, “continuing a pattern that’s made the Middle East a bright light in an otherwise dour market for fresh share sales.”
“Next year, it’s going to be an amazing pipeline,” Abu Dhabi’s Department of Economic Development chairman Mohamed Ali Al Shorafa said, adding that “over 11 companies (are) being either advised or in final stages for application approval for the listing on Abu Dhabi stock market.”