Fintech solutions are transitioning from startup offices to the mainstream, and experts predict revenue of $2 trillion in digital payments globally by 2020.
Companies such as PayPal, the now ubiquitous online payment portal, are becoming the norm for many financial product consumers. In response, mainstream banks are beginning to adopt mobile banking solutions to meet the demands of their clients.
“Banks, startups and non-banking players are disrupting the global banking and finance industry with mobile apps, immersive technology and non-traditional payments,” said James Barrese, PayPal’s former Chief Technology Officer and Senior Vice President of Payment Services.
“Emerging markets like the Middle East have the drive for innovation and opportunity to build next-gen infrastructure, enabling them to become global leaders in the digital payments revolution while providing a lifeline for billions of under-banked people.”
Emerging markets represent 90 per cent of mobile growth, according to industry body GSMA, and these figures are set to grow.
With the UAE’s ongoing progress in becoming a hub for fintech, the potential for GCC home grown innovation is apparent. As many fintech solutions begin as small businesses and startups, the Gitex Startup Movement at Gitex Technology Week 2016 is set to provide support for up-and-coming fintech entrepreneurs.
Currently, 2 billion people use at least one of 270 available mobile money services, and industry studies show the need for further easy-to-use digital payment solutions. Frequent mobile banking users are 40 per cent less likely to switch banks, and customers who primarily use bank branches are three times more likely to switch banks, according to a report by consultancy Bain & Company.
Across Europe, the Middle East, and Africa (EMEA), 96 per cent of banks are deploying end-to-end digital transformation strategies, with cloud computing, Big Data analytics, and mobile apps for enhancing the customer experience, according to a new report by IDC Financial Insights and global technology company SAP. Half of EMEA banks report that they will hire a chief digital officer by 2020 to support these strategies, according to the report.
“Mobile apps have become a game-changer for global banking and finance, as in every other industry,” said Andres Wolberg-Stok, Global Head of Emerging Platforms and Services at Citi.
“Firstly, they have trained consumers to demand that every service should be simple and pleasant to use. Secondly, they have demolished entry barriers and levelled the playing field, enabling emerging markets to compete on an equal footing for primacy in the next wave of innovation.”