Blockchain technology offers a transparency, immutability, and more to any use case it is applied to. Considering how well it has served platforms for cryptocurrency, the adoption by banks shouldn’t seem like that far of a stretch. Based on a recent report by a Dubai-based newspaper, it looks like blockchain could make its way into the United Arab Emirates Banks Federation (UBF).
The Advisory Council for UBF, which presently includes 50 member-banks, has brought this idea to the table to improve their Know Your Customer (KYC) protocols. The chairman of the Federation, Abdul Aziz Al Ghurair believes that this discussion alone is a step towards a “thriving banking ecosystem.”
The digital transformation program came up during the discussion with the participants, along with Emiratization. Emiratization is an initiative that helps to assign the private and public roles of its citizens for employment.
A study was brought into the discussion as well that discusses the use of a distributed ledger to automate and digitize some of the processes involved within the associated banks. The study, referenced by Aref Al Ramli as a chairperson of the Digital Banking Committee for the Federation, showed how blockchain could be applied to the banking system. Specifically, it demonstrated use cases like cross-border payments, compliance reporting, customer onboarding, and others.
The technologies coming into the banking industry are “continuing to shape customer needs and expectations,” according to Al Ghurair. With technology like blockchain, banks have the opportunity to create new revenue streams as well, “which will in turn drive sustained business growth.”
Last month, a government-based group called the AI and Blockchain Joint Working Group launched projects that will help to promote the progress of blockchain and artificial intelligence development. Their meeting that launched these initiatives was meant to also promote foreign investments and create an infrastructure that can support the technologies.
November also brought about the “world’s first sukuk transaction” with blockchain technology, completed by the Al Hilal Bank.