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Digital transformation fuels UAE’s banking sector growth, set to hit $175.7 billion by 2029
Banks are adopting AI, blockchain, and cloud technologies to improve customer experience and efficiency.
The UAE is driving a digital revolution in the Middle East’s banking sector, commanding the largest share of the region’s $3.2 trillion banking assets, according to a report by Arthur D. Little.
Yacin Mahieddine, Partner in Arthur D. Little’s Global Financial Services Practice, emphasized the UAE’s forward-looking approach: “With the Central Bank’s digital currency initiative and ground-breaking strides in blockchain integration, the UAE is redefining what it means to be a modern financial hub.”
In 2024, 80% of UAE banks have prioritized digital transformation, propelling the country’s digital banking sector to record an 8.7% Compound Annual Growth Rate (CAGR) over the past two years. The sector is forecasted to grow at a 4.8% CAGR between 2024 and 2029, reaching $175.7 billion by the end of the decade.
Banks in the UAE are embracing technologies like AI, blockchain, and cloud platforms to elevate customer experiences and drive operational efficiency.
The UAE Central Bank’s innovative Central Bank Digital Currency (CBDC) program highlights its commitment to fostering a modern and inclusive economy.
Inspired by advancements in Southeast Asian markets, UAE banks are implementing open banking, embedding financial services into non-banking platforms, and utilizing advanced analytics to deliver personalized customer experiences.
These advancements are strengthening customer loyalty, expanding SME outreach, and driving operational efficiency.
Nelson Danam, Principal at Arthur D. Little, highlighted the UAE banks’ progressive outlook: “By investing in both innovation and the talent to drive it, UAE banks aren’t just catching up to global standards; they’re challenging them. The next generation of digital banking is being shaped right here in the UAE, and it’s a model that others will look to replicate.”
Significant investments in talent development through programs like Digital Academies are equipping employees with the skills needed for a digital-first future. With 80% of UAE banks prioritizing digital transformation in 2024, the country is at the forefront of the Middle East’s tech-driven banking revolution.
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