Over the past two decades, the advancements in technology have brought on far-reaching changes in the lives of individuals as well as in a range of industries. Tech is now the bedrock of most industries, and it is felt most acutely when it comes to the banking industry. Nowadays, the long-term success of a bank depends on how fast it can adopt new tech and consequently offer its customers the best possible service. Such fast adoption of tech is going on rapidly in many regions, and banks within the Gulf Cooperation Council (GCC) have been particularly eager in this regard. In a new report from the ratings firm S&P Global, it has been pointed out that banks in the GCC region are adopting tech rapidly and improving its services significantly. Banks involved in retail banking are now increasingly under pressure to offer the latest services to its customers, and hence, banks in the GCC region are doing their utmost to adopt new tech rapidly.
For some time, it had been argued that pressure from regulators would eventually bring in better tech and services from banks. However, it is now clear that the demand for better services from customers has resulted in rapid tech adoption. Mohamed Damak, who is an analyst at the ratings agency, stated,
Regulatory risk is low because policymakers are conscious of the extreme importance of local banking systems in the region and the need to keep them safe from potentially disruptive unregulated competition.
In this regard, it is also important to point out that the emergence of Fintech companies has also made it necessary for banks to upgrade their tech capabilities significantly. It goes without saying that the money transfer services provided by some Fintech firms could eventually prove to be a massive challenge for banks in the region.
Moreover, the GCC region has a thriving young population, and it is only going to rise in numbers in the years to come. Most of those customers are technically literate and aware of the latest services that are being made available by banks worldwide. In such a situation, it is only natural for these banks to adopt technology quickly. On the other hand, foreign workers in the region send back tens of billions of dollars every year to their families back home, and this is another sector that the banks are trying to capture. Mashreqbank of Dubai has decided to tap into this market by establishing digital banks.