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The report on the prospects for banking services in the UAE, issued by «KPMG», confirmed that the banking sector in the country witnessed a promising year. Pointing out that the sector is expected to continue at this level of momentum during 2023 in light of the increasing demand for digital financial services, and the rapid adoption of financial technology solutions that enhance customer experience and competitiveness. The report focuses on assessing issues and trends affecting the banking sector in the country.
The report included the 10 largest banks in the country that enjoyed strong operational and financial performance in 2022, with an increase of 31% in their net profits. The cost to income ratio improved for the year on average by 1.8%, banks maintained adequate capital levels well above minimum regulatory requirements; The report also revealed that total assets of the banking sector increased by 10.6% year on year due to strong growth in deposits, loans and advances.
Abbas Basrai, Partner and Head of Financial Services at KPMG Lower Gulf, said: “The UAE, with its strong economy and flexible business environment, has attracted large inflows of foreign investment, and banks have benefited from large pools of capital and high-net-worth clients. in the state. There is no doubt that the government’s commitment to reviewing regulatory legislation is one of the main factors contributing to the stability of the sector. The measures taken by the Central Bank have led to strengthening governance frameworks and laws of transparency and accountability.
According to the study; Banks record an increase in the cost of compliance to manage risks associated with regulatory reform. From 2019 until early 2022, the Middle East region recorded a 63% increase in compliance teams in its organizations; While the total expected cost of complying with financial crimes is estimated at $4.2 billion in early 2022; The UAE represents a large part of that, at $1.7 billion, 40%. Compliance functions are expected to transform into technology platforms to maintain and monitor regulatory obligations, easily assess compliance risks, flag potential non-compliance, and allow action plan tracking.
Morale improved
The study indicated an improvement in the sentiment of the net industry sector compared to last year, based on 96,321 tweets about seven Emirati banks that were tracked from January 1 to December 31, 2022. The banking sector in the country achieved – in terms of the size of the total industry – 7.4%, which is an improvement of seven percentage points over the rate of the total industrial sector, which recorded 14.4% last year. It is worth noting that KPMG has collaborated with DataEQ, a social media analytics company, to analyze key factors for customer satisfaction among major banks in the country.
Banks operating in the UAE, especially major banking institutions, are seeking to adopt “Metaverse” to provide financial services to their customers and to communicate with the larger banking system.
The report revealed that customer service showed the highest number of negative conversations on social media; Among the biggest challenges customers have been experiencing is slow response, non-response and low staff efficiency. The study indicated that the period of interruption of services exceeds the customers’ view of the institutions, and constitutes the greatest risk factor, as customers complained of their inability to access online banking services, and the failure of hardware applications and ATMs.
