Dubai - MENA Herald: The issues and challenges facing the region’s banking industry - including the impact of de-risking on banks and their clients and the need to create more technology-driven and personalized banking experiences for customers – were under the spotlight at the Middle East Banking Forum 2016, which took place today at The St. Regis Cornish Abu Dhabi.
Hosted by the UAE Banks Federation (UBF) in association with The Banker, and held under the theme “Transforming the Customer Experience”, the Forum brought together some of the distinguished experts along with influential decision-makers from the banking industry in the UAE and wider Middle East.
The half-day event focused on new approaches to banking in a period of immense change, as the high-profile speakers and participants explored ideas and strategies to better address regulatory challenges and changing customer expectations, through a series of insightful presentations, lively panel debates and exclusive on-stage interviews.
The Forum kicked off with opening remarks from H.E. Mubarak Rashid Khamis Al Mansouri, Governor of the Central Bank of the United Arab Emirates, and H.E. Abdul Aziz Al Ghurair, Chairman of the UAE Banks Federation. The stimulating addresses delivered by both figures set the tone for the keynote sessions that followed. Over the next five hours and more, a steady stream of world-renowned experts took to the stage to address a variety of important topics ranging from de-risking, customer service enhancement and cyber security, fraud prevention, business resilience and the impact of financial technology.
The stellar lineup of international speakers included Ron Kaufman, award-winning customer experience consultant, New York Times bestselling author and founder of the customer service training company, UP! Your Service; Marcus Treacher, Global Head of Strategic Accounts at Ripple and Independent Director at CHAPS Co; Ajay Badyal, Head of Assurance & Advisory Services at the Federal Reserve Bank of New York, and Redmond Ramsdale, Senior Director and Head of GCC Bank Ratings at Fitch Ratings, among others.
Banks across the region continue to face multiple challenges. The growing burden of international regulation is causing many banks to de-risk – i.e., lower their risk by cutting off or reducing business with certain types of customers – with serious consequences for different customer segments who find themselves denied access to financial services. Also, the significant regulatory changes in the market risk framework have resulted in a complete overhaul of the way banks identify, measure, and protect against risk; as a result, many banks continue to struggle with implementation.
Addressing these issues head-on, panel discussions at the Forum reviewed the challenges of de-risking and discussed its impact on customers, whilst offering a regional and international perspective on regulatory compliance.
H.E. Mubarak Rashid Khamis Al Mansouri, the Governor of the Central Bank of the UAE, delivered the keynote address. In his opening remarks, he has highlighted the concerns about de-risking “We see the de-risking is having two significant impacts on banks in the region; namely, correspondent banking and banks’ relationship with exchange houses and SMEs.”
H.E Al Mansouri elaborated on the central bank’s agenda to mitigate the risks, “As a regulator, we have decided to face the unintended consequences of de-risking through two main initiatives. The first one is to work with the UAE Banks Federation on assessing the level of compliance of all national banks, with emphasis on the smaller ones. An independent third party with relevant expertise is conducting the assessment to inform our agenda towards resolving the issues identified through this process… Secondly, we have conducted an internal assessment of compliance of exchange houses, using a consistent methodology focusing on risks including reputational risks towards making decisions based on the said assessment… Furthermore, the National Anti-Money Laundering and Combating the Financing of Terrorism Committee has formed different sub-committees with an objective to enhance the UAE's overall AML/CFT laws, regulations and procedures covering all the sectors, including the financial sector.”
H.E. the Governor concluded by signaling his confidence and appreciation regarding the importance of the forum to press ahead with the agenda “I am confident that this conference will shed important lights on the way forward, building on our collective efforts as regulators, financial institutions and representatives of the international community.”
H.E. Abdul Aziz Al Ghurair said: “Our theme for this conference “Transforming the Customer Experience” is very pertinent in the context of the rapidly changing environment that banks are currently facing across the globe. On one hand, banks are trying to protect their businesses, which are constantly under threat from the fast-growing fin-techs and other online unregulated competitors, and on the other hand, regulatory environment is getting tougher; Basel III has been implemented which has significantly increased capital and liquidity requirements; IFRS 9, AML regulations and FATCA are all increasing cost of banking operation.”
“Banks have to follow not only home regulations but also international regulations as their transactions cut across national boundaries. The fast-evolving technology, particularly the usage of artificial intelligence and robotic technology in business, is revolutionising customer interaction at various touch points. Customers are comparing their product and service fulfillment experience with different providers across the industries. This is putting enormous pressure on banks to benchmark their service quality and customer experiences with other industries,” H.E. Al Ghurair said.
H.E Al Ghurair closed his speech: ” The UAE Banks Federation is very much alive to all these trends, rest assure that our cooperation with the Central Bank helps member banks to rise to the challenge.
Talking about the different channels banks have been using for customer interactions, H.E. Al Ghurair said, “Going forward, banks will have to take the omni-channel route where customers choose the channel based on their convenience, but the quality of interaction and ease of operations must remain the same. In case customers choose multiple channels, their experience across all channels has to be the same and seamless.”
The annual meeting point for all 54 banks in the UAE and other key banks from the region, the Middle East Banking Forum 2016, sponsored by 9 leading banks operating in UAE, has attracted today over 400 Board and C-level executives from leading banks in the UAE and wider region. The event also witnessed a live coverage from media partners and key broadcast TVs such as CNBC Arabia & Sky News Arabic.