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New age technologies are driving the way forward in finance and the UAE government is calling for increased adoption of such innovations to become more inclusive and help safeguard the system's integrity, experts told a workshop held as part of the annual UAE Innovates technology festival.
The workshop, organised by the Securities and Commodities Authority, sought to shed light on how the Emirates has evolved into a technologically advanced nation and introduced a robust regulatory framework to support innovation.
Organisations need to continue “thinking on how technology can improve their services”, Soha Ragab, a financial market specialist at the SCA, said during the workshop.
The UAE has adopted these technologies at a rapid pace, a move that has allowed it to protect its ecosystem from unforeseen circumstances while benefiting everyone from major financial institutions down to end users, Ms Ragab said.
Cloud technology allows organisations to minimise spending on hardware and software, set up and run data centres as well as scale their IT use in accordance with their requirements, she added.
The global cloud computing market is projected to grow to $947.3 billion in 2026 from $445.3bn in 2021, at a compound annual rate of 16.3 per cent, data provider Report Linker reported.
The Internet of Things, popularly known as a method of interconnecting devices via the web, has a number of critical uses in business.
It allows financial institutions to gain real-time data on their own and their clients' assets, which leads to effective risk management. Insurance companies can, for example, rely on chips in cars that allow them to assess premiums for drivers, depending on how safely or unsafely they drive.
In other industries — including agriculture, aviation, construction, health care, manufacturing and supply chains — the IoT can help improve business insight and customer experience, reduce costs and downtimes, allow more efficiency and productivity, track assets and cut waste.
The right selection of financial service partners is also critical as they are able to provide credible support to financial systems, focusing on risk and data management, security and compliance, Ms Ragab said.
It is also critical for governments to create an environment that is “safe enough to minimise the risk for investors and consumers, and protect the integrity of the [financial] system”, Ms Ragab said.
Cryptocurrencies are also being integrated into the system, though since the sector is still in its early stages, education and the right frameworks need to be in place, she said.
Cryptocurrencies are not licensed by the Central Bank of the UAE, although a number of cryptocurrency exchanges have been given permission to operate within financial free zones. The UAE dirham is the only legal tender in the country that is recognised by the regulator.
Ms Ragab also stressed the growth of the digital payments sector, spearheaded by mobile wallets, online banking apps and peer-to-peer money transfers, among others.
Neobanks and challenger banks — smaller financial service providers focused more on technology to serve clients compared to traditional lenders — provide both a good alternative for users and competition for banks, offering everything from savings to loans and credit, she added.
UAE Innovates is one of the largest innovation festivals in the world. It is overseen by the Mohammed bin Rashid Centre of Government Innovation and runs throughout February, with the participation of federal and local government entities, the private sector, academia, and community members in future-proof initiatives.