Explain the Blockchain application in UAE Banking industry?

The banking and financial services business has a tangled relationship with Blockchain, the distributed ledger technology made famous by cryptocurrencies like Bitcoin. It's a good thing that blockchain has the potential to revolutionise the way people trade value, on the other hand. It is possible to speed up many conventional banking procedures using newer technologies that provide a shared and irreversible history of transactions among business network participants. Records that have been agreed upon by consensus and posted to the ledger cannot be modified. As a result of these concerns, blockchain is considered as a threat to the current business structures in use. Because of the increasing need for Blockchain professional, the number of schools offering courses in the field is increasing as well.

Because old systems must be renovated and new systems must be coordinated between banks and financial service providers that have never worked together before, change may be tough. The debate is no more whether or whether blockchain technology will be used in banking, but rather when and how it will be implemented.

Blockchain application in UAE banks

Member banks of the United Arab Emirates Banks Federation (UAE Banks Federation) are adopting Blockchain. UBF is a non-profit organisation in the United Arab Emirates with 50 member banks.

The UAE banking industry was experimenting with AI, blockchain, and Fintech earlier this year. The banking sector was adapting to new VAT regulations, which demanded the development of new technology to support the transition to more stable financial institutions.

It is because of these considerations that these technologies have become more popular, including cost optimization, improved operational efficiency and greater income. Automated decision-making is being experimented with by some of major financial organisations based on analysis of millions of emails and other data sources. Robotic process automation (RPA) and artificial intelligence (AI) were employed to distinguish customer interaction.

New laws and regulations have put banks under a lot of pressure to reevaluate their business models. Profit margins have also been affected by the introduction of VAT. As cybersecurity and corporate governance measures have grown in importance, it has become more important to find new and creative methods to include consumers in the process.

Many aspects of business, from financial reporting to risk management to capital management to regulatory reporting to data collection to governance frameworks and IT systems, have been impacted by the new IFRS standards. To cope with the new VAT system, the banks had to incur significant resources in order to comply with it, as well as register for VAT. Due to the exempt status of a large amount of their services, banks are unable to collect input VAT. It has led to an increase in banking fees as a consequence.

For both regulatory and innovative challenges, banks attempted to build a strong and favourable company identity.

Wrapping up

Banking became increasingly disruptive in 2021, which brought both possibilities and risks to the industry. The industry continues to outperform the UAE economy in terms of having a longer-term, ethical, and hence more reliable culture, despite this. Overall. As a result of this wide spectrum of consumers, banks have had to adapt their services.

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