Over 200 fintech leaders for banking summit in Dubai

More than 50 percent population in the Middle East and Africa remains unbanked, while financial technology is disrupting the region’s banking and financial sectors – that doubles up the challenges faced by the industry.

The value of bank assets worldwide increased overall from 2002 to 2020, despite some fluctuation. In 2020, the assets of banks globally amounted to more than $180 trillion, up from $155.4 trillion in 2019, according to Statista.com, a global intelligence provider.

In 2020, the volume of mobile money transfer grew 15 percent to 41 billion with transaction value jumping 22 percent to $767 billion while the number of registered mobile money accounts grew 13 percent to 1.2 billion.

In the Middle East, the number of mobile money accounts reached 146 million with transactions value growing 26 percent to $10.5 billion. The number of registered mobile money accounts grew 9 percent to 56 million.

Morocco, Vietnam, Egypt, Philippines, Mexico are the top 5 countries where the unbanked population is the largest, according to a just-released study by the British research platform Merchant Machine.

“On a global level, the regions with the highest proportion of developing or emerging economies, quite predictably, top the list: in the Middle East and Africa the 50 percent of the population is financially excluded, South and Central America follow at 38 percent, Eastern Europe and the former Soviet republics at 33 percent, Asia Pacific’s share stands at 24 percent,” the report by Merchant Machine says.

While most consumers take basic access to financial services for granted, more than 1.6 billion adults, or more than a fifth of the mankind, do not have access to banking and financial services, according to the World Bank. While financial inclusion could help the banking sector grow, digital transformation could help it to become more agile.

However, mobile money transfer is growing faster than any other channels, disrupting the payment industry. International remittances processed via mobile money increased by 65 per cent in 2020. For the first time, over $1 billion is being sent and received every month, according to Global System for Mobile Communications Association (GSMA). Over the past five years, the value of transactions between mobile money platforms and banks grew fourfold, reaching $68 billion in 2020, up from just $15 billion in 2015.

“Despite fears that remittances would decline as people around the world suffered job losses and income cuts, it seems clear that diasporas around the world continued to use mobile money to come to the aid of those back home,” the State of the Industry Report on Mobile Money 2021 by GSMA, says.

“In 2020, the number of registered accounts grew by 12.7 per cent globally to 1.21 billion accounts – double the forecasted growth rate. Apart from changes in consumer behaviour, this impressive uptake was due to regulators implementing more flexible Know Your Customer (KYC) processes and relaxing onboarding requirements to make it easier to open an account.

“There are now over 300 million monthly active mobile money accounts. Not only are customers using their accounts more frequently, but they are using them for new and more advanced use cases. This suggests that more and more people are moving away from the margins of financial systems and leading increasingly digital lives.

“Transaction values also grew across the board as more money circulated and was cashed-in and cashed-out than ever before. For the first time, the global value of daily transactions exceeded $2 billion dollars, and is expected to surpass $3 billion a day by the end of 2022.”

Banks globally have to address both the issues to make banking more accessible to the unbanked population while making them profitable and sustainable. Some of these critical issues will be addressed at the forthcoming 2nd Middle East Banking Revolution Summit.

More than 200 senior bankers and financial technology experts will discuss and brainstorm on new ideas at the Middle East Banking Revolution Summit which is expected to offer some directions to the attending delegates.

“While the industry faces digital disruption, the cost of operating a bank account has been drastically reduced through technology adaptation. Therefore, banks are in a better position to acquire increased number of unbanked people that could change the global banking sector,” Nizam Deen, Founder and Chief Executive Officer of CS Events, said.

“Banking sector needs to be sustainable and this can happen by making banking services more accessible, affordable, while digitizing the payment services.”

Unarguably, the banking industry is going through phenomenal change, especially since COVID 19 banks are giving a relook into its existing business models and take a huge leap towards the future. The shift in consumers’ digital experience, adoption of next-gen technologies, transformation of customer service to customer engagement, mobile workforce with a need to ‘right-size’ the branch network creates an opportunity for regional banks to accelerate the shift to digital.

ME Banking Revolution Forum – aims to showcase latest innovations and practical case studies along with interactive panel discussions designed to guide the banking sector in Middle East to identify the right strategy to knock through long-standing resistance and be future ready.

Banking and financial services are soon going to be faceless, touchless and seamless experience for the customers where transactions and processes are going to be fully automated, nearly effortless and painless experience.

“Whether the future of banking is going to be a very pleasant experience or a scary one, depends on how banks utilize the technology and make the banking system more affordable, accessible and user-friendly, compared to the current banking system where customers stand in queue for the services, resulting in a waste of valuable time,” said Deen.

“I believe, the future of banking will be touchless, smooth and will be a pleasant experience than what it is now.” – TradeArabia News Service