The future of finance in the UAE is digital, embedded and intelligent - Middle East Business News and Information - mid-east. info

ByGhady Rayess, Co-Founder and CEO at FOODisruption is now the norm rather than the exception, bringing both challenges and opportunities. For example, the recent period of uncertainty in the UAE has driven innovation, digital adoption, and accelerated the ongoing transition to a cashless, digital-first economy. The rise of instant payments and digital wallets has long been reshaping the UAE’s financial landscape. In Dubai, cashless transactions are expected to account for around 90 per cent of all transactions by the end of 2026. Consequently, UAE banks, businesses and fintechs must innovate and embrace digital transformation to meet customers’ demands and maximize growth opportunities. Today, consumers in the UAE expect financial services that are fast, frictionless, and that fit seamlessly into their day-to-day lives. Products such as digital wallets are increasingly popular, providing a secure and seamless way to store, manage, and access financial assets and payment information. Banks and fintechs need to offer cutting-edge digital services that are expertly designed with intuitive and visual features that customers have come to expect, for example, providing digital wallets that give users the ability to track their spending and monitor financial activities through integrated tools. As the modern economy becomes increasingly global and digital, banks and fintechs need to eliminate rigid and outdated financial infrastructure and capitalize on the latest market trends, or risk falling behind. For example, stablecoins are revolutionizing digital payments across the UAE. By pegging their value to fiat currencies or precious metals, stablecoins offer a secure, reliable medium of exchange. Through stablecoins, banks can offer digital savings and deposit accounts while ensuring transparency and regulatory compliance. The overlap of AI and stablecoins could become one of the most defining shifts in fintech over the next decade,and financial businesses need to be ready to capitalize on this. Similarly, retailers and service providers, driven by the need to deliver seamless and frictionless experiences to their client base, are now extending payment solutions as part of their customer journey. This is the essence of embedded finance: the seamless integration of financial services into non-financial platforms. Banks and fintechs need to build offerings to benefit from this trend, supporting businesses to offer embedded payment and financial services. The Central Bank of the UAE, alongside innovation-friendly financial centers, has fostered test-and-learn sandboxes, pragmatic guidelines, and clear rulebooks for innovative developments, such as embedded finance, allowing banks and fintechs to innovate quickly, test new ideas safely, and roll out modern services with confidence. At FOO, we recently worked with Majid Al Futtaim, a leading integrated lifestyle provider, with brands across retail, hotels, and cinemas, to deliver an embedded wallet. The agile, efficient closed-loop solution was designed to integrate with the existing Carrefour App, delivering several benefits. For instance, the credit from the refund can be applied immediately to purchases, creating a seamless user journey, and helping drive customer retention. As appetite for convenience and demand for a frictionless journey grow, digital experiences are consolidating, and the term super app has quickly become one of the most exciting buzzwords in fintech. Super apps represent the convergence of services that once existed in silos, such as messaging, shopping, ride-hailing, payments, and even healthcare, into a single, integrated digital ecosystem. Payments are the foundation on which every other service in a super app is built, as these platforms must enable pay-to-merchant, pay-to-government, and diverse cash-in/cash-out methods to be successful. The rise of embedded finance and super apps is closely tied to the rapid expansion of the Banking-as-a-Service (BaaS) model, a financial technology solution that enables non-bank businesses to directly offer services traditionally reserved for licensed banks, such as branded business accounts, cards, and loans. FOO’s mission is to enable Banking 4. 0, where banks capitalize on their assets to launch BaaS business lines, allowing partners to distribute products at scale. BaaS provides the building blocks for financial services by offering businesses a menu of modular financial features via APIs. Essentially, businesses can seamlessly ‘plug’ banking features, infrastructure, and licenses into their platforms, reducing friction, extending their reach and enhancing customer experiences without the need to build complex banking systems from scratch. Embedded finance solutions can also unlock new revenue streams and provide businesses with valuable consumer data so that personalized, dynamic loyalty programs and tailored products and services can be offered. This is especially advantageous forfintech startupsthat want to launch quickly without establishing a fully-fledged banking infrastructure. As the UAE accelerates toward a digital, technology-driven future, consumer expectations for financial services will continue to evolve rapidly. Consequently, for banks and fintechs, innovation is no longer a source of competitive advantage — it is a business imperative. From digital wallets and stablecoins to embedded finance and BaaS, financial services providers must move quickly to deliver next-generation offerings, enabling businesses and consumers to access connected, embedded experiences that will become essential as innovation continues to reshape the financial landscape. About FOO:FOO is an award-winning, B2B Fintech Technology and Service Provider, headquartered in the UAE, that specializes in empowering businesses through digital transformation. FOO provides innovative, in-house-built fintech solutions that optimize digital capabilities for clients across diverse industries, enabling them to