Deloitte launches inaugural Regulatory Barometer revealing the top 10 priorities for banking regulation in UAE has been saved
Deloitte launches inaugural Regulatory Barometer revealing the top 10 priorities for banking regulation in UAE
09 May, 2017 – Deloitte has launched the inaugural Regulatory Barometer that reveals the top 10 priorities for banking regulation in the UAE. Deloitte spoke to senior management of the leading banks from across the UAE, who shared their views on how regulations are impacting their business models. In this new report, Deloitte reveals the regulatory opportunities and challenges facing the financial services industry and the five ways that institutions can take advantage of the new regulatory changes to drive efficiency and growth.
“Regulatory requirements have been a major contributor to how financial institutions have evolved since the financial crisis. The influx of regulatory initiatives, particularly from the international level especially in financial stability and financial crime areas, has forced many firms to reconsider their business models. Banks that are proactive and use regulatory changes to their benefit, put themselves in a strong position to become market leaders,” explained Bhavin Shah, Partner, Financial Services, Deloitte, Middle East.
The findings of the Deloitte Regulatory Barometer report reveal the need for regulators to play their role, by ensuring clear regulations and striking a balance between market safety, while also enabling businesses to perform and grow. A discrepancy was also found between regulatory expectations and banks’ awareness of certain risks. Main findings include:
• The report found that UAE banks are undoubtedly aware and concerned about international regulations – particularly, their complexity and certain inconsistencies in the expectations. The majority of banks involved in the report felt that changes to international sanctions and IFRS 9 implementation would likely impact them the most.
• Banks in the UAE are becoming increasingly proactive about financial crime compliance. 83.3% of those Deloitte spoke to have a dedicated unit, focusing their efforts on training, improving standards, processes and procedures, as well as target operating model design.
• 88.9% of respondents considered the economy to be one of the biggest risks to financial stability in the market. Yet, only a third of respondents claimed their regulator had discussed their potential impact on the financial stability of their country or the GCC region.
• Conduct risk is undoubtedly an important area of focus for regulators going forward. While 75% of respondents said they monitored conduct risk at their institution, yet 42.9% believed conduct risk was not sufficiently understood in the region.
The findings suggest the financial services industry needs to be more proactive and forward-thinking about adapting to regulatory changes that are likely to be inevitable.
“There are exciting opportunities emerging within the regulatory sphere such as FinTech and other disruptive technologies that are set to revolutionize the banking industry. How quickly or efficiently that happens will be greatly impacted by the underlying regulations and it is in all of our interest to get those right. To achieve this banks and regulators will have to work to together,” concluded Shah.
The Deloitte Regulatory Barometer UAE 2017 is available to download on the Deloitte Middle East website at http://bit.ly/2q1sCM1
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About Deloitte & Touche (M.E.):
Deloitte & Touche (M.E.) is a member firm of Deloitte Touche Tohmatsu Limited (DTTL) and is a leading professional services firm established in the Middle East region with uninterrupted presence since 1926.
Deloitte provides audit, tax, consulting, and financial advisory services through 26 offices in 15 countries with more than 3,300 partners, directors and staff. It is a Tier 1 Tax advisor in the GCC region since 2010 (according to the International Tax Review World Tax Rankings). It has also received numerous awards in the last few years which include best employer in the Middle East, best consulting firm, the Middle East Training & Development Excellence Award by the Institute of Chartered Accountants in England and Wales (ICAEW), as well as the best CSR integrated organization.