The banks are also exploring automated decision-making based on sentiment analysis by extracting data from millions of emails and other data sources.
According to a new report, Artificial Intelligence (AI), blockchain and FinTech have appeared as the major technological reformers that are going to change the way UAE-based banks operate.
KPMG’s annual UAE banking perspectives report reveals how technological innovation and strong corporate governance will set up banks to transform into robust financial institutions.
The report said the banks are also exploring automated decision-making based on sentiment analysis by extracting data from millions of emails and other data sources.
KPMG is analyzing the validity of exploring and implementing blockchain applications to achieve the three objectives - improve operational efficiency, increase revenue and reduce risk.
The report also said that as banks deal with the new VAT regime and the high compliance costs associated with mandatory VAT registration, banks could be forced to increase their fees to compensate for the additional costs.
Emilio Pera, partner and head of Financial Services, KPMG Lower Gulf, said, “Banks in the UAE are operating in very dynamic times. The introduction of new laws and tougher regulations is putting tremendous pressure on banks to re-think their business models. Furthermore, the introduction of VAT has impacted profit margins.”
“All these factors are encouraging banks to embrace technological innovation like never before and use it to engage with customers in new and creative ways.”
It added that Cyber security has come up among the top priorities ,as any split and it could undermine the trust that customers have in their bank, and affect the future profitability.
Pera said, “The last year has seen the emergence of an increasingly disruptive banking sector which has heightened the degree of both opportunity and threat. Despite this, the general picture is a healthy one, with the sector continuing to surpass that of the wider UAE economy in 2017.
"We are also confident that banks are in better shape compared with a year ago, in terms of having a more long-term, ethical and consequently more trustworthy culture. Banks will now have to embrace change if they are to operate to their optimum over the next nine months."