BY GHINWA BARADHI
REGIONAL CHIEF INFORMATION OFFICER, HSBC MENAT
The digital game plan in the Middle East and North Africa (MENA) is quickly evolving especially in the UAE, which is one of the most advanced digital economies in the region with an 18% share¹.
Consider that Bahrain, Qatar, and the United Arab Emirates are among the top countries in the world, with more than 100% smartphone penetration and more than 70% social media adoption — even higher than in the United States.² The MENA region could see approximately $400bn added to its economies over the next 15 years if artificial intelligence (AI) solutions are adopted.³ Against this backdrop, customers' rapidly evolving needs means the banking industry must proactively explore sustainable and transformative digital solutions to disrupt the status quo – for the better.
As we stand at the edge of a new decade in the 21st century, we must remember that anything worth achieving took perseverance and trial-and-error. Digitalisation is no different and embracing an agile attitude while keeping customer service –encompassing trust, efficiency, ease, growth – at the top of banks' priority lists is the best approach to help customers thrive amid this change. Saudi Arabia now has the region's largest 5G network, with the first phase providing the service through a network of 2,000 towers across 20 Saudi cities. The result? High-speed internet connectivity that is ten times faster than the current 4G network, allowing customers to use advanced digital solutions i.e. robotics, 3D printing, and virtual and augmented reality.
The concept of cashless societies is rapidly gaining momentum across the region – good news for banks and payment solution providers that want to offer a seamless, digital experience for their customers. Boston Consulting Group (BCG) estimates that the migration to a more cashless society can boost annual gross domestic product (GDP) by as much as 3 percentage points⁴. Countries in MENA must leverage this potential. Digitalising all transactions – not just cash – could lead to greater accountability and reduce the occurrence of black-market transactions. This was reaffirmed by respondents to an Ernst & Young poll late-last year on digital and cash payments, who cited the top benefits of a cashless economy being convenience (39%) and financial crime prevention (36%). The majority (52%) believe that financial institutions can do more to reassure consumers that their data is protected. Transparency feeds stronglyinto building this confidence5. The UAE has been making headway in this space, with the Ministry of Finance embracing the Open Data Policy and providing a selection of files and documents through its website, including content that can be shared and republished.
Historically, advancements in digitalising trade have resulted in disparate 'digital islands'. The challenge is connecting these digital islands to create a cohesive network. In June 2019, HSBC and Landmark Group completed a first-of-its-kind transaction that connected two independently built blockchain platforms, proving their interoperability and showing how collaborative technologies can further accelerate international trade. Bringing together HSBC's Contour platform with Landmark's ReChainME platform enabled seamless connectivity at both ends of the key trading corridor. With all the key participants along the logistical supply chain able to view documents and track the shipment's progress in real-time, the overall time to complete the transaction was reduced by approximately 12 days, a 40% reduction. Further blockchain trade transactions have since followed, demonstrating the commercial value of the technology.
Therein lies the value of blockchain – making global trade faster, safer and simpler. By reducing friction, blockchain helps accelerate the velocity of trade, while allowing organisations to protect their own data. Unsurprisingly then, worldwide spending on blockchain solutions is forecast to be nearly $15.9bn in 2023, according to a new update to the Worldwide Semiannual Blockchain Spending Guide from International Data Corporation6. On a governmental level, the UAE's Vice President and Prime Minister and Ruler of Dubai, His Highness Sheikh Mohammed Bin Rashid Al Maktoum, expects blockchain technology to account for half of the country’s government transactions by 2021.7
Digitalisation must be a global tool for global advancement, be it through business, politics, communities, or other. Together, we must write a digital game plan that spurs positive disruption in the 2020s.