*All DIFC photos are my own
“Expert panelists came together to discuss the geo-economic, technological and financial trends impacting the industry now and in the future.” (via DIFC Link)
Among the notable announcements at the forum was the creation of a USD 100 million FinTech focused fund to help grow FinTechs in the Middle East, Africa and South Asia (“MEASA“) markets.
The forum was divided into three (3) segments:
- Globalizing Gulf Finance;
- Emerging Markets; and
- The Future of Finance.
The decline in oil prices and the need for diversification in new economies/sectors alongside the growth in the FinTech market shaped the discussion on digitalizing finances and shedding light on the power of blockchain technology in the region in the banking, trade, and data housing sectors. In a previous post, I discussed the prevalence of FinTech services and the blockchain in the realm of remittances and cross-border payments. In fact, Standard Chartered CEO Bill Winters stated that the bank processed over 98 percent of their transactions digitally. In this way, commercial banks are adapting to new and innovative methods and are acting complimentary to traditional financial services rather than disrupting them.
Blockchain technology is about building networks that are information-sharing. Permissionless networks are open to anyone joining the network (such as bitcoin or ethereum), whereas permission-networks (or ledgers) are limited to members and are regulated as such as well. Further, according to Ripple’s Asheesh Birla, interoperability is key in the Middle Eastern region in that people will be banking primarily with mobile networks and wallets in the next five (5) years.
Hisham Ezz Al-Arab, Chairman and Managing Director at Commercial International Bank stated that central banks must change with the times as the millennial generation is moving toward informal banking systems. He mentioned that younger generations prefer to transact through their mobile phones as opposed to coming into local bank branches. In this way, collaboration with FinTechs will help satisfy the demand of the millennial generation. In fact, blockchain technology is already overturning traditional banking systems in modernizing banking. 70% of UAE inhabitants are unable to qualify for traditional banking, requiring global platforms, especially as USD 100 billion is remitted back annually.
Ultimately, the forum’s various panels and fireside chats expressed much interest in implementing innovative blockchain technology hand-in-hand with current banking institutions in a way to enhance FinTech services in the MEASA.