Emaar Properties founder and former chairman Mohamed Alabbar will lead Zand, the UAE’s first digital bank that will cater to retail and corporate clients.
“The UAE combines progressive regulations with commercial, financial and technology hubs. This provides the perfect environment for a world-leading digital bank that can launch in the UAE and scale beyond,” said Mr Alabbar on Monday.
“As the first fully independent digital bank in the country, with a full UAE banking licence, Zand will provide innovative, effective financial solutions that help simplify businesses and lives, addressing the needs of both retail and corporate customers.”
Zand will be a “digital economic accelerator” and serve as a platform for wider digital services that focus on businesses and people.
The new entity is awaiting final regulatory approval and will be launched imminently. Its chief executive will be Olivier Crespin, a veteran banker who recently led Eradah Capital in Dubai and previously worked for BNP Paribas, Citi and DBS Bank.
Last year, ADQ, one of the region's largest holding companies, said it plans to set up a digital bank in the UAE using a legacy banking licence held by First Abu Dhabi Bank.
ADQ, one of the region’s largest holding companies, revealed plans last year to set up a digital bank in the UAE using a legacy banking licence held by First Abu Dhabi Bank.
The rise of FinTech companies, an increasingly smartphone-savvy consumer base and a sharp increase in digital services have forced banks worldwide to increasingly invest in digitisation and reduce the number of branches.
The Covid-19 pandemic, which led to lockdowns and social distancing around the world, further hastened the pivot to digital services across industries.
The digitisation of services for banks, which would usually take two years, is being completed within two weeks as a result of the pandemic, JP Morgan Chase chief executive Jamie Dimon said last year at Sibos, an annual conference for the global financial services industry.
Globally, lenders need to speed up the shift to digital operations and reconfigure their branch networks, where demand has softened, according to McKinsey.
The use of cash and cheques eased last year in most markets, with about 20 per cent to 40 per cent of consumers surveyed saying they used significantly less cash, according to the consultancy.
Many UAE lenders are unveiling digital services to appeal to millennials – a growing consumer segment.
The mobile wallet market in the UAE is projected to hit $2.3 billion by 2022, according to US consultancy TechSci Research.
A Boston Consulting Group survey that polled more than 2,000 respondents in the UAE last year found that 87 per cent of respondents were willing to open an account with a digital-only bank.
About 53 per cent of UAE consumers increased their use of banking mobile apps amid the pandemic while more than half tried digital banking for the first time as a result of movement restrictions.
Mashreq Bank, the Dubai lender controlled by the Al Ghurair family and the UAE’s oldest bank, is spending Dh500 million ($136m) on digital transformation over five years.
The bank has invested in several digitisation initiatives that helped it to improve productivity, achieve cost efficiencies and enhance customer experience.
Mashreq’s digital plans included shutting half of its branches in the UAE last year as increased use of technology reduced the need for a physical presence.
About 97 per cent of Mashreq’s transactions take place through a digital platform.