How Open Banking in UAE Can Shape the Future of Banking by 2035
Focuses on how major forces such as digitization, climate change, economic fragmentation and social inequality are reshaping the banking sector by 2035.
Scenario 1: transformed banks regain trust:
How fintech and big tech disrupted the banking industry and how banks adapted
Banks now open their data and related insights to third parties within external data-driven innovation ecosystems. Customers enjoy a frictionless, unified digital platform that encompasses their entire financial life.
Scenario 2: climate action paradigm shift
How global climate action transformed the economy and society
The second scenario is called "climate action paradigm shift". In this scenario, the world is on track to limit global warming to 1.5°C above pre-industrial levels by the end of the century, preventing the most catastrophic effects of climate change. Substantial adjustments to the ways that individuals live and interact, and how businesses operate, have made this climate transition possible.
The digital revolution that began transforming the nature of communities, connectivity and work decades earlier is helping societies reach climate goals. The path to 2035 in this scenario, such as ESG investing acceleration, carbon tax introduction, technological breakthroughs powered by public-private partnerships and consumer and investor pressure.
The challenges and opportunities for banks in this scenario, such as internal culture change, short-term/long-term tradeoffs, managing climate risks and financing the transition.
Scenario 3: a fragmented world: How globalization gave way to regionalism and multi-polarity
The third scenario is called "a fragmented world". In this scenario, the period of globalization that steadily integrated markets around the world after the cold war is over. That liberal economic order has faded, fragmented by a deeply multi-polar geopolitical landscape.
Bilateral and regional trade agreements now dominate rather than the WTO. US hegemony of the global financial system has been fractured by rivals’ alternative payment systems as well as the rise of digital currencies.
The challenges and opportunities for banks in this scenario, such as rising intermediation costs, rising reputational and cybersecurity risks, maturation of digital currencies and new customer pipelines.
One certainty amid a range of possibilities
Conclusion and recommendations for banks
It emphasizing the importance of designing a great banking experience that fulfills the customer expectations of security, trust, speed and convenience. It also urges banks to be data-driven, customer-focused and innovative in their banking strategies. To be a champion for people and the planet, reaching a sustainable future that’s built to last. And deliver on the possibility of how conscientious banking can change the world for everyone – today through 2035 and beyond.
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