Future of Technology
Session - Islamic Fintech: Are Islamic Banks Ready to be Disruptive
In a session moderated by Mustafa Adil, Head of Islamic Finance at Thomson Reuters MENA, the discussion explored the barriers and challenges facing Islamic banks as they with respect to the fintech disruption. Industry leaders in the region delved into their experiences about embracing technological innovation in the Islamic finance industry.
- Dr. Haitham Al Salama, Chief Economic Advisor, Qatar Financial Centre, commented on the strategic tensions involved in cultivating the fintech industry. It is important that their innovative capacities are not curbed via overregulation while also ensuring the right types of regulations are in place to uphold international consumer protection standards. Fortunately, Islamic finance regulations are not expected to have a restrictive influence on fintech. The risk for traditional banks, however, is that fintech could very well decouple customers from banking services that have become obsolete in this day and age.
- Sagheer Mufti, Chief Operating Officer of Abu Dhabi Islamic Bank (ADIB), commented on how Islamic banking has enjoyed tremendous growth in previous years. He believes that as long as Islamic finance is growing, fintech in coordination with Islamic banking has every reason to grow as well. He went on to say a recent study showed that 80% of Islamic banking customers would be willing to change banks if offered better digital banking solutions. Banks in this region have a reputation for being late adopters of technology. However, Mufti assured the audience that ADIB has been studying this emerging consumer trend closely, in line with the UAE’s strategic focus on technology and innovation.
- Jarmo Kotilaine, Chief Economist of Bahrain Economic Development Board, commented on how around 72% of the MENA region is still unbanked. Fintechs would serve as an enabler and optimize the underdeveloped financial services landscape.
Session – Disrupting Construction: Technologies That Will Change the Way We Build
In a session moderated by Brett Smyth, Chief Operating Officer of Engage- Middle East, the participants discussed the future of the construction industry in the UAE and the impact of disruptive technologies like 3D printing and building information modelling (BIM). Additionally, the session examined the actions that should be taken by traditional businesses to allow them stay ahead of the upcoming wave of futuristic construction.
- Marwan Abu Ebeid, Senior BIM Manager at Turner International, commented on how buildings are now being built in a remarkably short time by combining multiple emerging technologies to collect data, automate processes and build structures with more accuracy and speed.
- Andrew Mowat, Director of RMJM commented on the new construction technologies in Dubai, stating that exciting new equipment have been introduced to the market. He also asserted that relatively smaller companies will be able to adopt and absorb this change faster, building their own niche.
- Dominic Wright, Co-Founder of Generation 3D, commented on the rising importance of automated robots and their use in multiple construction practices. He added, that this can now take place remotely, which would be very exciting when introduced to the Dubai market.
- Corentin Guillo, Chief Executive Officer of Bird.i, He discussed the rising significance of the satellite business and how it can help empower both medium and large-sized construction businesses.
Future of Energy
Session – H.E. Suhail bin Mohammed Faraj Al Mazrouei
His Excellency Suhail bin Mohammed Faraj Al Mazrouei, UAE Minister of Energy, said during a session on the region’s oil policy moderated by Richard Mably, Global Commodities Editors at Reuters News, the UAE sees a healthy level of demand for crude oil in the future from emerging economies in Africa and Asia, and that the UAE would remain commercially-minded in its strategic oil investments.
- His Excellency said the UAE was satisfied by the high level of compliance with the current agreement by OPEC and non-OPEC countries to cut back oil production, and that this compliance would have a direct bearing on the general positive movement non-OPEC partners in the agreement.
- In light of the current agreement to reduce oil production, Minister Al Mazrouei noted that the market is now correcting itself, and that a combination of healthy demand for oil with an expectation of crude stocks declining over a period of time would help maintain the market’s balance.
- He said the UAE had reduced its oil production by over 200,000 barrels per day in March compared with October 2016, expecting that the 6 month production cut there would be averaging at least 140,000 barrels per day in line with the UAE’s compliance with the agreement.
Session – Moving Beyond Crude
In the session moderated by Andy Critchlow, Associate Editor of Reuters BreakingViews, the esteemed panel discussed what the future holds for the crude oil market and the efforts made by crude oil exporters to reduce their dependency on the resource.
- Dr. Ibrahim Al Muhanna, Energy Consultant and former advisor to the Saudi Arabian Ministry of Energy, commented on how he believes each OPEC member is making efforts to diversify its own economy in its own way. Saudi Arabia has great potential for renewables development, especially solar and wind. The question is whether to import the technology or develop it locally.
- Aubrey Keller, Renewables Lead at Atkins MENA, believes the problem with renewables is that they are competing with subsidies. Fortunately solar PV prices are competitive in spite of these subsidies. It is the reduction of these subsidies that will unblock the real value of the renewable energy industry. Incremental reduction of subsidies is important to allow for socioeconomic adjustment.
- Dr. Hector Hernandez, Assistant Professor of Chemical Engineering, Khalifa Univesity of Science and Technology, stated there are two reasons domestic solar energy has not completely taken off in the region. The first is technology-driven: the haze and dust in the region create efficiency issues. The second reason is policy-driven, and relates to the inertia in enacting policy to enable a standardized infrastructure. Another emerging opportunity is through biogas and biothermal energy. The UAE wants to divert landfill use by 50% by 2027. In the meantime, there will be a need to redesign the energy delivery infrastructure.
Session – Outlook for Green Finance in MENA
In the session moderated by Hadeel Al Sayegh, Gulf Senior Company News Correspondent, Reuters, the panel discussed the prospects for growth for the expansion of green finance in the MENA. The panel also discussed how government pledges of raising energy dependency from renewable energy will have an impact on green finance.
- Thierry Tardy, Executive Director of Acquisitions and Project Finance, Investments at Acwa Power, commented on his company’s development through the years and the impact it has had on green finance in the GCC. He referred to Acwa Power’s Saudi Arabia operations and mentioned that they are looking to expand internationally in countries such as South Africa, and Mozambique, where there is a clear interest on resorting to clean energy.
- Dr Henning Wuester, Director at Knowledge, Policy and Finance Centre, IRENA, believes that the Solar Energy market has become immensely competitive given that it is currently the cheapest way to produce energy in the world. He added that IRENA is continually supporting renewable energy efforts across the region with a focus on Saudi Arabia, Morocco, Egypt and Jordan all of which are currently rebalancing their energy mix away from using fossil fuels towards renewable energy.
- Ivano Iannelli, Chief Executive at Dubai Carbon Centre of Excellence, commented on Dubai’s billion dollar Green Fund, which is led by Dewa, the Dubai Supreme Council of Energy and Dubai Carbon, and was launched to support green sustainable initiatives. He added that the fund is part of Dubai’s Clean Energy Strategy 2050, which ultimately aims to transform Dubai into a city reliant on green energy.
Session – How a Shaken-Up World Will Affect Finance in the Middle East in 2017
In a session moderated by Andy Critchlow, Associate Editor of Reuters BreakingViews, the panel discussed the GCC’s approach to Trump, Brexit, China and Russia.
- Dima Jardaneh, Head of Economic Research at Standard Chartered MENA does not believe a Trump presidency will significantly change the relationship of the US with the Gulf. It will only be more transactional by nature and business-focused.
- Jardaneh commented on how, lately, the GCC has been borrowing externally more than normal. Now there will be a need to rebalance the source of some of this funding with incoming FDI, among other sources.
- With regard to GCC taxation, Jardaneh believes the complete tax infrastructure is still not in place which is why VAT, as an initial step, makes sense. The UAE is more advanced in the process but all GCC countries would have to be ready at the same time for VAT to have the most impact. Tim Fox, Chief Economist at Emirates NBD, agreed and stated the tax bargain and social contract is clear in the UAE because of how well-maintained the cities are. However, he stated this not necessarily true in other parts of the region.
- Jardaneh believes Brexit will not impact the bilateral relationship between the GCC and the UK and that there is room to expand service trade as the UK leaves Europe. Fox agreed, stating GCC investments into the UK are not a stepping stone into Europe, as is the case with other countries, but are done for their own sake.
- Both economists stressed the importance of Asia, especially China, as a trading partner for the GCC. There has been increasing collaboration in the energy space, especially petrochemicals.
- Fox sees the UAE’s spending priorities to be based on the evolution of the economy. Specifically, this will include, among other things Dubai Expo 2020, broadening the reach of tourism, connectivity to other markets and infrastructure development.
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© Press Release 2017