The finance world is rapidly changing, and traditional companies everywhere have to manage some pretty big threats popping up on the horizon.
In the Middle East, where banks and financial companies are going through rapid modernization processes, some regional conferences and industry meetings are reinforcing these concepts by helping banks and other commercial businesses brainstorm about where to take their models in the coming years, as technologies like blockchain continue to evolve, and digital payment technologies sprout up like daisies.
One such event is the Retail Banking Summit organized in Lebanon. This event, which happened July 26, hosted speakers from various financial institutions such as Bank Audi, Fransabank, Credit Libanais, Banque Libano-Française, Banque Du Liban and Bank of Beirut.
The organizer, Efma, is a nonprofit working since 1971 to facilitate communications between banks and insurance companies in the region. With over 3,000 members and 130 countries, Efma wields a lot of influence in the finance sector.
Officials from Efma said the event was planned to shine a light on some of the big challenges facing the industry — including the digitization of transactions, the rise of mobile payments, and the distribution of technologies that will change the customer experience across the board. The event also pointed to “the emerging role of fintechs in the economy.” Fintech is a new term used to describe the merging of finance and technology, and how it affects markets.
"The banking sector in Lebanon has grown tremendously over the past few years.” Fahim uz Zaman, Efma General Manager Middle East, said. “Banks in the region are looking for opportunities to serve customer needs in more innovative and profitable ways with a membership base consisting of almost a third of the world's largest retail banks, Efma is focused on reaching out to industry professionals to discuss and debate the ever-changing banking landscape and seek pragmatic solutions to the challenges facing the sector."
Rik Willard heads the Agentic Group, a global company well versed in the evolution of blockchain and other fintech advances.
In recent interview, Willard spoke to the Gulf News Journal about what banks need to do to be proactive about the looming changes.
First, he said, it's critical that financial companies get involved in peer-to-peer lending (P2P), which is becoming a major force in the industry.
“The movement toward P2P in that region is opening up applications for micro-financing and micro-lending.” Willard said. “As capitalism changes, we're going to see more people giving money to each other in informal but secure and trackable ways.” He added that this effort will "asset in the sustainable uplifting of the region as a whole".
Mentioning blockchain as an immutable record of transactions, but conceding that many digital technologies still need to focus on identity and verification, Willard said banks need to be seen as “trustworthy.”
Another opportunity, he said, comes in the form of Anti-Money Laundering and Know Your Customer regulations.
“A lot of countries are concerned about money getting into the wrong hands,” Willard said. “Banks have an edge — they've already vetted customers and identified them.”
Will banks be able to stand against the rising tide of technology? That depends how well they continue to innovate and adapt.
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