Arab Banks race to adopt the future of technology despite challenges

H.E. Dr. Mohamed Khalfan bin Kharbash, Minister of State of Finance and Industry considered the financial sector as one of the main pillars of development in the region, he stated that "The Arab banks showed their competitiveness and proved their success in an open market for international competition" Khirbash emphasized that the banks must invest heavily in the technology if they are to retain a competitive advantage, he added: "The financial sector is a vital sector and can not be developed in isolation of the technology".

Dr. Kharbash emphasized on the importance of technology to enable the Arab Banks to compete and face the global competition and giant multinationals.

In this context the participating experts at the 3rd Financial Technology (FT) Summit & Exhibition which will take place in Dubai on April 23, 2007, and attended by the CIOs of the top 100 Arab banks and key decision makers from the financial services industry confirmed that "the Arab banks, particularly major banks, is head to head with the international banks in adopting the latest technology and strategic use of it".

Hosam Al-Yousof, Chief of Staff, NCB, Saudi Arabia confirmed that Arab Banks race to adopt the future technology " there is no success or evolution without challenges, some of the challenges are availability of skilled support locally from vendors/suppliers, education of the vast majority of customers (awareness and transformation). Infrastructure of telecom providers in terms of bandwidth and information security threats".

He also stated that" the e-banking is becoming reality in our region with 85% of the transactions are electronic (internet, telephone Banking, ATM, Mobile). In certain fields like Brokerage more than 90% are electronic. These percentages will increase in several areas covered yet in the non financial transactions.

Alyousef confirmed that the Arab banking industry in the year 2006 showed enormous development in the field of applying technology innovations "the example of Brokerage in Saudi Arabia through Internet and Telephone, IPO operations (subscriptions, selling during the first days) supported by electronic channels (ATM, Internet, IVR) introduction of the electronic identification devices for corporate customers and the implementation of Public Key Infrastructure.

While Forrester Research considers the newly announced money laundering fighting regulations to provide foment conditions for additional technology investments across all banks.

Azzam Al- Dari, Consulting Director - Forrester Middle East stated that the newly announced regulations will increase the technology investment in five key areas: (1) process/application integration software to consolidate customer profiles across multiple lines of business, channels and products within a bank (2) advanced analytics that examine customer profile to search for various money laundering patterns such as cash flow surges, multi layer network, account hijacking and shell companies, (3) business- to-business (B2B) integration software to facilitate inter-bank information sharing, thus allowing regulators to detect patterns spanning multiple bank multiple transacting entities (4) case management software to consolidate, structure and present the various investigation-related documents and correspondence, (5) nation-wide economic database to enable the regulators to devise varies economic indicators related to money laundering.

Donald Blair, senior Advisor, Experton-Group stated that the great challenge that faces the Arab banks is:" application of technology from US and Europe happens pretty quickly in the Middle East, the single biggest issue facing the Arab Banks is the early adoption and compliance with industry standards, the proper application is the biggest challenge. Arab Banks need to look at the development of complete and industry standard architecture that integrates the infrastructure of technology into the infrastructure of the banking business. For Arab Banks to be even more competitive, they need to develop a strategic plan and commitment to develop a totally integrated architecture based on industry standards.

Khaled Eid ,Managing Director of The World Development Forum stated that " the event is a strategic platform based on qualitative approach that enable Arab Banking industry leaders to interact directly with IT vendors to bring the latest technology for an in depth examination and to facilitate the transformation" this regional industry dialogue is a necessity to help the Banking leaders to take the right technology decision and benefit from the pool of knowledge & expertise offer by the Summit, Added Eid

Eid explained that the Financial Technology summit this year organized under the theme of "The Bank of the Future. This year agenda will focus on core issues including IT Governance, Regulatory & Compliance, Aligning IT & Business Strategies, Next Generation Banking Platforms, High Performing Operating Models and Organizations, and achieving quality through IT services management.The event will also discuss the most pressing issues related to anti-money laundering , as it represents one of the most serious challenges that necessitates further investments in technology by the Arab Banking sector.

The sponsors of this year's summit and exhibition include the Giants in the financial technology field, including Oracle, STME, Juniper Network, and Ejada, as gold sponsors. While Trend Micro and ITS are the silver sponsors, and IMTAC is the bronze sponsor.