It is not the era of competition but cooperation among banks, fintech and other industry players, a senior industry executive said on Wednesday.
Speaking at the Banking, Innovation and Technology conference organised by Khaleej Times, Abdul Waheed Rathore, group chief compliance officer at Dubai Islamic Bank, said financial institutions have to open their arms and embrace partners — be it for the purposes of KYC, identification, and verification.
It is not the era of competition but cooperation among banks, fintech and other industry players, a senior industry executive said on Wednesday.
Speaking at the Banking, Innovation and Technology conference organised by Khaleej Times, Abdul Waheed Rathore, group chief compliance officer at Dubai Islamic Bank, said financial institutions have to open their arms and embrace partners — be it for the purposes of KYC, identification, and verification.
“We have to connect to the governmental sources like the Emirates ID authority, UAE Pass, and so on for the purpose of managing our customer relationships, servicing them and acquiring customers through our partnerships.”
It is expected that by the first quarter of 2025, banks will have to implement all the application programming interfaces (APIs) to encourage open banking.
“Open banking means there will be all sorts of non-banking FinTech players, quasi-banking players who are part of the larger financial ecosystem, the banks will have to connect to be able to acquire new business and service existing customers. So it’s no longer an option. You are either in the game or you’re out of the game. This is not an era of fierce competition. It is an era of cooperation. We will see more cooperation between fintechs and money service businesses. You see telcos are already in the picture. They’re big time into the picture. So these cooperations and collaborations are only expected to grow,” said Rathore.
Earlier, Michael Jabri-Pickett, editor-in-chief of Khaleej Times, delivered the welcome at the conference, which was attended by a large number of industry professionals from the banking and technology sectors across the UAE.
Michael Jabri-Pickett
‘Traditional banking no longer valid’
While delivering a keynote address, Abdul Waheed Rathore said the traditional form of banking is no longer a valid model as customers are not following the traditional methods of banking.
“The traditional form of banking is no longer a valid model. Today, data does not belong to any single institution, but to the customer. If the customer tells you that the data can be shared, you, by all means, have to share. This means a completely new regime over information sharing and data protection in the form of GDPR regulation, which came out in Europe and has subsequently been adopted by other jurisdictions in the larger context of the emerging ecosystem,” he added.
Highlighting an example, he said: “The brick-and-mortar banking is not something that you feel. If you walked down Park Avenue or Midtown Manhattan 20 years ago, you would see every second block had a bank branch of about 12,000-15,000sqft minimum. If you walk through Manhattan today, you would see fewer branches and in much smaller sizes. It’s not that the customers have disappeared. The customers have grown exponentially, but they are not following the traditional methods of banking.”
He elaborated that banks need to ensure that their systems are designed and structured in a way that they can provide ‘wow’, seamless customer experience.
Rathore said traditional banking has been a ‘self-contained industry’ wherein banks wanted to do everything themselves, whether they wanted to attract new customers through their branches or external sales force, or they wanted to process payments or wanted to provide customer services through call centres.