Blockchain adoption to fuel fintech growth in UAE

With Expo 2020 Dubai preparations in full swing, the growth curve is inevitable

The Bitcoin logo is seen on a pillow on display at the Consensus 2018 blockchain technology conference in New York City, New York, U.S., May 16, 2018. Image used for illustrative purpose

The Bitcoin logo is seen on a pillow on display at the Consensus 2018 blockchain technology conference in New York City, New York, U.S., May 16, 2018. Image used for illustrative purpose

REUTERS/Mike Segar
UAE - The UAE's fintech sector is poised for robust growth and will witness large collaborations with banks, said Raja Al Mazrouei, executive vice president of FinTech Hive at DIFC.

Al Mazrouei headed a panel discussion at a two day conference - Finovate Middle East - which concluded on Thursday.

Al Mazrouei, said: "Finovate is a credible global event that is taking place in global fintech hubs and Dubai is a crucial connection for global financial hubs. Finovate acknowledges the potential and opportunity for Dubai to lead the region in innovation and Fintech."

With Expo 2020 Dubai preparations in full swing, the growth curve is inevitable. Blockchain implementations in financial services remains a leader in fintech predictions and will see the institutional adoption of crypto currency or digital assets to facilitate social necessities and financial inclusion requirements. Also more partnerships in fintech between startups, as well as mergers and acquisitions between fintechs will create a distinctive player. The big tech collaboration with fintech will beat the banks at the consumer game.

The key findings of Al Mazrouei's panel was that fintech collaboration with financial institutions creates bigger opportunities for impact; and that banks are changing, adapting and understanding what is happening in financial innovations. "Collaboration saves time for all parties; when planned properly it is usually very successful and partnering with acceleration programmes increases credibility for the banks and enables fast track to proof of concepts," added Al Mazrouei.

Serhat Yildirim, chief digital officer, ADIB, said: "Fintech Hive at DIFC has played a key role in promoting the development of Fintech ecosystem in the UAE and ADIB is proud to be part of this journey. For events like Finnovate to take place in the Dubai, reaffirms the role of the UAE not just as a leading centre for financial services but also for Fintech and innovation. Fintechs and incumbent banks can enter into a symbiotic relationship whereby banks can leverage cutting edge and innovative solutions and offer Fintechs the opportunity to test their solutions at scale. The result of this partnership ultimately benefits the end customer and helps contribute to the creation of a vibrant and diverse financial services environment. ADIB looks forward to exploring partnership opportunities with Fintechs to help deliver its goal of making banking simple, friendly and convenient for customers."

Fintechs are now firmly established as a key part of the financial services and digital ecosystem not just in the region but also globally. The rapid pace of innovation and customer expectations means that complacency is not an option. Partnerships and co-creation between Fintechs and Incumbents will become more and more essential.

It may be recalled that the Dubai Future Council for Blockchain launched the Dubai Blockchain Policy at ninth Smart City Expo World Congress in Barcelona, which also concluded on Thursday. "Blockchain is undoubtedly one of the most prominent and promising of these breakthrough technologies. With that in mind, the Dubai Future Council for Blockchain sought to develop a policy to support government entities and private companies to implement the technology and form value-creating blockchain networks," said Dr Aisha bint Butti bin Bishr, who chairs Dubai Future Council for Blockchain.

The launch of the Dubai Blockchain Policy complements Smart Dubai's efforts to implement the Dubai Blockchain Strategy, which was launched in 2016. The strategy seeks to make the Dubai Government the first in the world to conduct 100 per cent of applicable transactions via blockchain by 2020.

Blockchain adoption has increased significantly in the UAE this past year. The UAE Government is championing the adoption of blockchain across the country, as can be seen by the Emirates Blockchain Strategy 2021, which aims to put 50 per cent of government transactions on the blockchain by 2021. Several banks in the UAE are also embracing blockchain adoption such as Emirates NBD, Al Hilal Bank, ADCB and Mashreq Bank. Some of the top global brand such as Emirates airline, Emaar, Etihad Airline and Adnoc are beginning to adopt blockchain.

Saeed Al Darmaki, managing director of Alphabit and Novelty Curve, said: "All sectors falling under the financial services industry will benefit the most from blockchain, as the technology has already proven to enable numerous cost, time and resource efficiencies. Such sectors include banking, remittances, payments and transaction settlement. Blockchain is also one of the primary technologies driving Fintech."

Blockchain adoption will continue to grow throughout the course of 2020 in the sectors of infrastructure, as well as an increase in awareness of the technology through education and a growth in the ecosystem. "The most significant growth for blockchain use in digitising/tokenising assets such as real estate and bonds, which are assets that are currently illiquid and complex in nature. Finally, I expect that we will see the release of onshore regulation for blockchain and crypto assets and foresee regulation to be finalised by the end of 2020. I believe that this onshore regulation will be instrumental in ensuring the UAE maintains a leading global position in blockchain technology," added Al Darmaki. 


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