banking in emerging markets - ernst & young · banking in emerging markets gcc fintech play...
TRANSCRIPT
Banking in emerging marketsGCC FinTech play 2017
46
1014
Foreword
Executive summary
The FinTech revolution
The GCC banking sector’s views on FinTech
FinTech’s familiarity and its perceived impact
FinTech’s threats and opportunities
The GCC banking sector’s organizational readiness
Hurdles and limitations faced by the GCC banking sector
Compete or collaborate with FinTech players
Contents17
19
21
23
24
The case for collaboration among participation banks
Global FinTech and opportunities for participation banks
Participation banking sector overview
Country outlook
Bahrain
Saudi Arabia
Malaysia
UAE
Kuwait
Qatar
Turkey
Indonesia
Pakistan
2632
46
56
48
58
50
60
52
62
54
3844
Today more than two billion adults still do not have a bank account. There are also
the center of this disruption.
innovations.
Abdulaziz Al-Sowailim
Foreword
GCC FinTech play 20174
Ashar Nazim
brand.
GCC FinTech play 2017 5
Executive summary
The FinTech revolution
GCC banks’ views on FinTech
The case for collaborationWe advocate collaboration between participation banks and
FinTech opportunities for participation banks
Participation banking sector overview
The FinTech revolution
journey, lower cost of services, increased choice, consumer empowerment, faster transaction speed and a more inclusive
8 GCC FinTech play 2017
GCC bank’s views on FinTechThreats and opportunities:
offer end customers a noticeably better value proposition.
Organizational readiness: While there seems to be a
transformation, practical steps to convert this intent into measureable results do not seem to have been taken.
Hurdles and limitations:
in this area.
Compete or collaborate:
them as potential business partners to collaborate with, for the
The case for collaboration
international norms.
FinTech opportunities for participation banks
Participation banking sector overview
previous years.
provided in the report.
Muhammad Muzammil Kasbati
GCC FinTech play 2017 9
The FinTech revolution
The FinTech revolution
market entrants innovate products and services
services sector.
FinTech revolution
Insurance
Banking
Asset management
Wealth management
Improved consumer journey
Lower cost
Increased choice
Empowered customer
Faster transaction speed
FinTech enhances consumer value proposition
GCC FinTech play 201712
services in particular.
result in shorter transaction chain, reduced operational cost, enhanced resilience of operational processes,
to increase revenue and improved
bottom line.
the transaction cost, increase the choice, improve the transaction speed
to the customer.
swathe of less well-off individuals, who
the “physical” distribution structure and
GCC FinTech play 2017 13
The GCC banking sector’s views on FinTech
FinTech in the GCC banking sector
16 GCC FinTech play 2017
Low familiarity Some familiarity
Very familiar
E
Yes
FinTech familiarity and its perceived impact
Q:
Q:
Familiarity with FinTech innovations is modest in the GCC banking sector.
How would you rate your familiarity with
GCC FinTech play 2017 17
innovations as “low familiarity” or “some familiarity”
players could cause any noticeable disruption in the
propositions over those offered by the incumbent
Survey participants are in doubt if FinTech could disrupt the GCC banking sector in the short term.
Ease of use
Lower cost
Wider variety or features
Personalized service
GCC FinTech play 201718
Strengths of FinTech innovations are acknowledged by the GCC banking sector.
innovations offer end customers a noticeably better value proposition, in terms of ease of use, cost, speed
consumer journey.
Low
Q:
majority of the survey participants estimated that loss of the
by 2020.
very shortly develop a policy stance that actively
Up to 5% 10%–15%
43%
15%–20%
7%
5%–10%
36%
20% and above
7%
7%
FinTech threats and opportunities
GCC FinTech play 2017 19
Estimated loss of business to stand-alone FinTech
Q:
international counterparts, who believe that
disruption.
participants believe that funds transfer
sectors.
disruption” activity that closely follows
In a noticeably positive stance toward
seems to be bullish on the potential of opportunities it offers to incumbent players.
innovations could help them enhance consumer-centricity and reduce cost.
why the survey participants believe that their loss of business to stand-alone
modest compared with their international counterparts.
from FinTech innovations.
GCC FinTech play 201720
Funds transfer and brokerage are viewed to be most likely to be disrupted.
Deposits
Low
Low
Q:
Q:
GCC banking sector’s organizational readiness
Senior management support for digital transformation through FinTech innovations.
Somewhat
of the initiative, practical steps to convert the intent into results do not seem to have taken place in most of
A majority of the survey participants do not have a single person in charge of innovation.
Yes
In a majority of the survey participant banks, the
and accountability.
Q:
GCC FinTech play 2017 21
Q:
plan ready
GCC FinTech play 201722
In addition, two-third of the survey participant banks had either not had any substantive discussions within
stated that they had an actionable work plan in place to
Q:
one option:
•
•
•
•
•
Most GCC banks do not seem to have a credible work plan in place for digital transformation.
Hurdles and limitations faced by the GCC banking sector
Estimated loss of business to stand-alone FinTech
transformation.
Low
Low
Tech
nica
l abi
lity
GCC FinTech play 2017 23
a number of hurdles and limitations
transformation initiative.
and limitations was their bleak assessment of the technical ability
survey participants felt that their
position, in terms of technical
Q:
GCC banks’ perception of FinTech Likely strategies of the GCC banks
Build in-houseInvest
Partner
Irrelevant
Survey participants’ views on the banking sector’s evolution toward a digital ecosystem.
Compete or collaborate with FinTech players
GCC FinTech play 201724
The GCC banking sectors’ perception of FinTech and their likely strategies to compete with them
Q:
Q:
view?
The need to build “shared-cost FinTech solutions” in the GCC region.
Potential collaborative shared-cost FinTech solutions in the GCC region.
Q:
Q:
GCC FinTech play 2017 25
sector-level cost-effectiveness and reduce
that there is a need to set up shared-cost
When asked to prioritize a short list of potential
participants rated authentication and biometrics,
Behind this top priority list, the survey Smart surveillance systems
Low
Case for collaboration among participation banks
The case for collaboration among participation banks
Network effect
in order to broaden its adoption and use.in the United States has joined hands with a non-bank small business lender, which
Joint venture Peer-to-peer platform
6 Malaysian participation banks
IAP integrated (owner and operator of
IAP)
GCC FinTech play 201728
The case for collaboration in the GCC banking sector
with investment from retail and institutional investors via
Economies of scale
conventional banks.
economies of scale and broad market adoption is the mWallet
Exploring emerging FinTech innovations
Key objectives
•
•
•
GCC FinTech play 2017 29
FinTech in the GCC banking sector
“proof of concept,” and the development of common standards
investment banks as depicted below. Within one year from its the outset.
Avoid a two-tier participation banking sector
commercially viable manner may be out of reach for many small and medium-sized participation banks. This is either because of
Unless there is a proactive collaboration, there is a risk that we
innovations, whereas small and medium-sized participation banks may end up as second-tier players with a competitive
increased to more than institutions — September 2015
GCC FinTech play 201730
GCC FinTech play 2017 31
Global FinTech and opportunities for participation banks
Global FinTech and opportunities for participation banks
“Silicon Valley is coming. There are hundreds of start-ups with a lot of brains and money working on various alternatives to traditional banking.”
some of the most attractive and valuable
investments to date have been in the
Private investment in global FinTech companies (US$b)
Capital deployed in private FinTech companies by business area
Institutional tools
Insurance
Payments
2 2 2
GCC FinTech play 201734
FinTech overview and opportunities for participation banks
Potential opportunities for the participation banking sector
market share.
in most of the developed countries. Based on their familiarity
SME lending platform
company noted: “Working with a FinTech company called OnDeck, we will be piloting a new working capital product. The process will be entirely digital, with approval and funding generally received within one day vs. the current process that can take up to one month or more. The loans will be Chase branded, retained on our balance sheet, and subject to our pricing and risk parameters.”
To identify innovation characteristics and emerging areas of innovation, EY has developed the following framework:1
Source: UK FinTech — On the Cutting Edge, An Evaluation of the International FinTech Sector, EY, 2016
paymentsInsurance investments and
pensions
Investment
and capital markets
innovations
P2P payments
tools
Smart contractsBlockchain
Telematics
Social insurance
WearablesVisualization tools
GCC FinTech play 2017 35
Peer-to-peer lending platform
on the current PLS business model.
The participation bank conducts suitability evaluation of
and monitors their performance. However, the responsibility to channel funds to ventures of their choice is moved to the investors.
approach for their PLS account.
Digital wealth managementhave decided to provide a policy support to set up automated
participation banks to offer the PLS account holders yet another way to invest their funds in a Sharia-compliant manner.
Investors
• Individual, corporate and institutional investors
Ventures
• Similar to current
•
in innovative and new
viable projects
Islamic banks
Islamic bank, in line with
•
on ventures
• Suitability assessment on investors
Provide Channel funds to ventures of their choice
GCC FinTech play 201736
Banking and payments
P2P payments:
person payment solution to their clients.
multinational company stated that, “This new P2P solution will securely make real-time funds available through a single consumer-facing brand. Chase and the partner banks represent 60% of all US consumers with mobile banking applications. We intend to keep P2P free for consumers and the network consortium is open for all banks to join.”
the launch of a similar consortium-based P2P payments
Digital-only bank for the millennials:
services to meet the differentiated needs of this customer
German online bank.
for participation banks in the due course. There is a case for participation banks to evaluate collaborative ventures with
countries.
Multifactor digital authentication:
driven authentication protocol for their clients.
the three factors in client authentication. The other two factors
FinTech in the GCC banking sector
GCC FinTech play 2017 37
Participation banking sector overview
40 International participation banking assets40 Regional market contributions41 Participation industry footprint42 Participation banking country contributions42 Leading 20 participation banks by capitalization
International participation banking assets*
US$
b
13%
572
930
2011 2012 2013 2014 2015
GCC ASEAN Turkey and ROW South Asia
385 455 515 606 663
117 143
153 159 142
53 69
84 89 91
17 20
24 28 33
Share of participation banking assets* International participation banking assets* (US$b)
Regional market contributions
2011 2012 2013 2014 2015
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
GCC ASEAN Turkey and ROW
South Asia
Par
tici
pati
on b
anki
ng m
arke
t sh
are
Banking penetrationSize of circle = Participation banking assets
KSA
UAE
Kuwait
Qatar
Turkey
Bahrain
Indonesia
Bangladesh
EgyptPakistan
Jordan
0%
10%
20%
30%
40%
50%
60%
70%
0% 50% 100% 150% 200%
Malaysia
GCC FinTech play 201740
Islamic
Regional contribution to growth in 2015
Growth rate by region Banking penetration and participation asset market share
Participation industry footprint Share of markets
domestic industry.
Global
34%
17%
9%
2%
2%
54%
24%
27%
3%
11%
13%
9%
5%
2%
22%
43%
5%
29%
Pakistan
Saudi Arabia
UAE
Qatar
Indonesia
Malaysia
Kuwait
Turkey
Bahrain
GCC FinTech play 2017 41
Participation banking country contributions
Leading 20 participation banks by capitalization
Country contribution in 2015 (US$b)
Capitalization of top 20 banks
Year on year (YoY) growth rate of assets, 2015 (in local currency)
Malaysia
14%
KSA
Kuwait Qatar Turkey
Indonesia Bahrain Pakistan
37%
10% 10% 5%
2% 2% 2%
UAE
18%
Pakistan
Bahrain
Indonesia
Turkey
Qatar
Kuwait
UAE
Malaysia
Saudi Arabia
CAGR2011–15
Conventional Islamic
16%
13%
17%
7%
17%
21%
17%
4%
26%
–10% 0% 10% 20% 30%
2012 2013–15
CAR2015
CAR2014
Capital Adequacy Ratio (CAR)
US$b 1 2 3 4 5 6 7 8 9
10 11 12 13
21% 16% 23% 17% 14% 15% 19% 20% 47% 16% 17% 16% 16% 17% 16% 14% 14% 22% 16% 14%
20% 15% 26% 16% 15% 14% 18% 19% 44% 14% 17% 16% 17% 21% 17% 14% 13% 24% 16% 15%
GCC FinTech play 201742
Top 20 participation banks
assets
0% 4% 8% 12% 16% 20%
Average ROE 2011–15
– 20 40 60 80100
Total assets 2015US$b
GCC FinTech play 2017 43
Country outlook
Total banking assets Total financing assets Total investment accounts
37
15
0
10
20
30
50
40
2011 2012 2013 20152014
US$
b
27% 29%
21
13
0
10
20
30
50
40
2011 2012 2013 20152014
US$
b
32% 38%
23
13
0
10
20
30
50
40
2011 2012 2013 20152014
US$
b
30% 35%
4% 6%
–25%
–5%
–15%
5%
15%
2012 2013 20152014
Investment accounts YoY growth* Financing YoY growthAssets YoY growth 4% 1% 4% –3% 8% 1%
4% 5%
–25%
–5%
–15%
5%
15%
2012 2013 20152014
3%0%
–25%
–5%
–15%
5%
15%
2012 2013 20152014
Participation bankingConventional banking
Conventional banking CAGR 2011–15
Participation banking share
Participation banking CAGR 2011–15
%
Participation banking penetration in Bahrain Bahrain
GCC FinTech play 201746
Return on assets Return on equity Cost to income ratio
1.2%
1.1%
–1.0%
0.0%
2.0%
1.0%
2011 2012 2013 20152014
9%
9%
–5%
0%
15%
10%
5%
2011 2012 2013 20152014
56%
39%
0%
20%
100%
40%
60%
80%
2011 2012 2013 20152014
7.77.7
2011 2012 2013 20152014
6%
3%
0%
4%
2%
6%
8%
10%
0
4
2
6
8
10
2011 2012 2013 20152014
35%29%
0%
40%
20%
60%
80%
100%
2011 2012 2013 20152014
Participation bankingConventional banking
Share of global market* Share of participation banking growth in 2015
GCC FinTech play 2017 47
Total banking assets Total financing assets Total investment accounts
273316
0
100
200
300
500
400
2011 2012 2013 20152014
US$
b
43% 54%
179
269
0
100
200
300
500
400
2011 2012 2013 20152014
US$
b
50% 60%
428
0
100
200
300
500
400
2011 2012 2013 20152014
US$
b
10%
–2%–10%
10%
0%
20%
30%
2012 2013 20152014
Investment accounts YoY growth* Financing YoY growthAssets YoY growth
Total banking sector CAGR 2011–15
16% 4% 17% 5% 10%
8%
-2%–10%
10%
0%
20%
30%
2012 2013 20152014
2%
10%
10%
0%
20%
30%
2012 2013 20152014
Participation bankingConventional banking
Conventional banking CAGR 2011–15
Participation banking share
Participation banking CAGR 2011–15
Total banking sector
%
Participation banking penetration in Saudi ArabiaSaudi Arabia
GCC FinTech play 201748
Return on assets Return on equity Cost to income ratio
2.0%
1.8%
0.0%
1.0%
4.0%
2.0%
3.0%
2011 2012 2013 20152014
13%
12%
0%
10%
40%
30%
20%
2011 2012 2013 20152014
48%
35%
0%
20%
100%
40%
60%
80%
2011 2012 2013 20152014
6.9
6.6
2011 2012 2013 20152014
4% 4%
0%
4%
2%
6%
8%
10%
2011 2012 2013 20152014
32%33%
0%
40%
20%
60%
80%
100%
2011 2012 2013 20152014
Participation bankingConventional banking
0
4
2
6
8
10
Share of global market* Share of participation banking growth in 2015
GCC FinTech play 2017 49
Total banking assets Total financing assets Total investment accounts
296
93
0
100
200
300
600
500
400
2011 2012 2013 20152014
US$
b
20% 24%
426
123
0
100
200
300
600
500
400
2011 2012 2013 20152014
US$
b
18% 22%
242
89
0
100
200
300
600
500
400
2011 2012 2013 20152014
US$
b
20% 27%
–5%–14%
–40%
0%
–20%
20%
40%
2012 2013 20152014
Investment accounts YoY growth* Financing YoY growthAssets YoY growth 5% –1% 10% 0% 3% –2%
–11%–16%
–40%
0%
–20%
20%
40%
2012 2013 20152014
–18%–17%
–40%
0%
–20%
20%
40%
2012 2013 20152014
Participation bankingConventional banking
Conventional banking CAGR 2011–15
Participation banking share
Participation banking CAGR 2011–15
%
Participation banking penetration in MalaysiaMalaysia
GCC FinTech play 201750
Share of global market* Share of participation banking growth in 2015
Return on assets Return on equity Cost to income ratio
1.2%
0.9%
0.0%
1.0%
4.0%
2.0%
3.0%
2011 2012 2013 20152014
13%
11%
0%
10%
40%
30%
20%
2011 2012 2013 20152014
53%
41%
0%
20%
100%
40%
60%
80%
2011 2012 2013 20152014
12.3
10.9
2011 2012 2013 20152014
3%4%
0%
4%
2%
6%
8%
10%
2011 2012 2013 20152014
13%
34%
0%
40%
20%
60%
80%
100%
2011 2012 2013 20152014
Participation bankingConventional banking
0
8
4
12
16
20
GCC FinTech play 2017 51
Total banking assets Total financing assets Total investment accounts
270
131
0
100
200
300
600
500
400
2011 2012 2013 20152014
US$
b
24% 33%
516
159
0
100
200
300
600
500
400
2011 2012 2013 20152014
US$
b
18% 24%
243
134
0
100
200
300
600
500
400
2011 2012 2013 20152014
US$
b
30% 36%
15%5%
–40%
0%
–20%
20%
40%
2012 2013 20152014
Investment accounts YoY growth* Financing YoY growthAssets YoY growth 17% 9% 14% 6% 17% 5%
5%
–40%
0%
–20%
20%
40%
2012 2013 20152014
15%
–1%
–40%
0%
–20%
20%
40%
2012 2013 20152014
Participation bankingConventional banking
Conventional banking CAGR 2011–15
Participation banking share
Participation banking CAGR 2011–15
17%
%
Participation banking penetration in the UAEUAE
GCC FinTech play 201752
Share of global market* Share of participation banking growth in 2015
Return on assets Return on equity Cost to income ratio
1.7%1.7%
0.0%
1.0%
4.0%
2.0%
3.0%
2011 2012 2013 20152014
13%
12%
0%
10%
40%
30%
20%
2011 2012 2013 20152014
39%
31%
0%
20%
100%
40%
60%
80%
2011 2012 2013 20152014
8.0
7.1
2011 2012 2013 20152014
4%3%
0%
4%
2%
6%
8%
10%
2011 2012 2013 20152014
28%31%
0%
40%
20%
60%
80%
100%
2011 2012 2013 20152014
Participation bankingConventional banking
0
8
4
12
16
20
GCC FinTech play 2017 53
Total banking assets Total financing assets Total investment accounts
54
74
0
20
40
60
120
100
80
2011 2012 2013 20152014
US$
b
50% 58%110
84
0
20
40
60
120
100
80
2011 2012 2013 20152014
US$
b
43% 43%
5258
0
20
40
60
120
100
80
2011 2012 2013 20152014
US$
b
64% 53%
–18%
33%
–40%
0%
–20%
20%
40%
2012 2013 20152014
Investment accounts YoY growth* Financing YoY growthAssets YoY growth 5% 5% –1% 12% 8% 0%
1%
–40%
0%
–20%
20%
40%
2012 2013 20152014
–6% –2%
–40%
0%
–20%
20%
40%
2012 2013 20152014
Participation bankingConventional banking
Conventional banking CAGR 2011–15
Participation banking share
Participation banking CAGR 2011–15
–6%
%
Participation banking penetration in KuwaitKuwait
GCC FinTech play 201754
Share of global market* Share of participation banking growth in 2015
Return on assets Return on equity Cost to income ratio
1.1%
1.1%
0.0%
1.0%
4.0%
2.0%
3.0%
2011 2012 2013 20152014
10%
8%
0%
10%
40%
30%
20%
2011 2012 2013 20152014
45%
34%
0%
20%
100%
40%
60%
80%
2011 2012 2013 20152014
8.6
7.5
2011 2012 2013 20152014
5%
3%
0%
4%
2%
6%
8%
10%
2011 2012 2013 20152014
24%29%
0%
40%
20%
60%
80%
100%
2011 2012 2013 20152014
Participation bankingConventional banking
0
8
4
12
16
20
GCC FinTech play 2017 55
Total banking assets Total financing assets Total investment accounts
125
54
0
50
100
150
300
250
200
2011 2012 2013 20152014
US$
b
24% 30%
222
84
0
50
100
150
300
250
200
2011 2012 2013 20152014
US$
b
23% 27%
147
59
0
50
100
150
300
250
200
2011 2012 2013 20152014
US$
b
22% 29%
24%
11%
–40%
0%
–20%
20%
40%
2012 2013 20152014
Investment accounts YoY growth* Financing YoY growthAssets YoY growth 17% 11% 25% 14% 22% 13%
8%
–40%
0%
–20%
20%
40%
2012 2013 20152014
13%6%
–40%
0%
–20%
20%
40%
2012 2013 20152014
Participation bankingConventional banking
Conventional banking CAGR 2011–15
Participation banking share
Participation banking CAGR 2011–15
17%
%
Participation banking penetration in QatarQatar
GCC FinTech play 201756
Share of global market* Share of participation banking growth in 2015
Return on assets Return on equity Cost to income ratio
1.9%
1.6%
0.0%
1.0%
4.0%
2.0%
3.0%
2011 2012 2013 20152014
14%
13%
0%
10%
40%
30%
20%
2011 2012 2013 20152014
29%
27%
0%
20%
100%
40%
60%
80%
2011 2012 2013 20152014
8.1
7.1
2011 2012 2013 20152014
3%3%
0%
4%
2%
6%
8%
10%
2011 2012 2013 20152014
18%24%
0%
40%
20%
60%
80%
100%
2011 2012 2013 20152014
Participation bankingConventional banking
0
8
4
12
16
20
GCC FinTech play 2017 57
Total banking assets Total financing assets Total investment accounts
402
250
300
600
1,500
1,200
900
2011 2012 2013 20152014
US$
b
6% 6%
737
420
300
600
1,500
1,200
900
2011 2012 2013 20152014
US$
b
5% 5%
1,219
380
300
600
1,500
1,200
900
2011 2012 2013 20152014
US$
b
6% 3%
15%
123%
0%
80%
40%
120%
160%
2012 2013 20152014
Investment accounts YoY growth* Financing YoY growthAssets YoY growth 9% 6% 16% 40% 4% 4%
–5%
–40%
0%
–20%
20%
40%
2012 2013 20152014
–11%–6%
–40%
0%
–20%
20%
40%
2012 2013 20152014
Participation bankingConventional banking
Conventional banking CAGR 2011–15
Participation banking share
Participation banking CAGR 2011–15
–8%
%
Participation banking penetration in TurkeyTurkey
GCC FinTech play 201758
Share of global market* Share of participation banking growth in 2015
Return on assets Return on equity Cost to income ratio
1.1%
0.3%
0.0%
1.0%
4.0%
2.0%
3.0%
2011 2012 2013 20152014
11%
3%
0%
10%
40%
30%
20%
2011 2012 2013 20152014
54%
49%
0%
20%
100%
40%
60%
80%
2011 2012 2013 20152014
11.6
9.3
2011 2012 2013 20152014
5%5%
0%
4%
2%
6%
8%
10%
2011 2012 2013 20152014
29%28%
0%
40%
20%
60%
80%
100%
2011 2012 2013 20152014
Participation bankingConventional banking
0
8
4
12
16
20
GCC FinTech play 2017 59
Total banking assets Total financing assets Total investment accounts
421
160
100
200
300
600
500
400
2011 2012 2013 20152014
US$
b
565
200
100
200
300
600
500
400
2011 2012 2013 20152014
US$
b 373
150
100
200
300
600
500
400
2011 2012 2013 20152014
US$
b
3% 4%3% 3% 3% 4%
–7% –4%
–40%
0%
–20%
20%
40%
2012 2013 20152014
Investment accounts YoY growth* Financing YoY growthAssets YoY growth 5% 4% 7% 4% 5% 1%
–3%
–40%
0%
–20%
20%
40%
2012 2013 20152014
–11%–5%
–40%
0%
–20%
20%
40%
2012 2013 20152014
Participation bankingConventional banking
Conventional banking CAGR 2011–15
Participation banking share
Participation banking CAGR 2011–15
–9%
%
Participation banking penetration in IndonesiaIndonesia
GCC FinTech play 201760
Share of global market* Share of participation banking growth in 2015
Return on assets Return on equity Cost to income ratio
3.4%
1.3%
0.0%
1.0%
4.0%
2.0%
3.0%
2011 2012 2013 20152014
25%
16%
0%
10%
40%
30%
20%
2011 2012 2013 20152014
72%
45%
0%
20%
100%
40%
60%
80%
2011 2012 2013 20152014
12.1
7.2
2011 2012 2013 20152014
8%
10%
0%
4%
2%
6%
8%
10%
2011 2012 2013 20152014
18%24%
0%
40%
20%
60%
80%
100%
2011 2012 2013 20152014
Participation bankingConventional banking
0
8
4
12
16
20
GCC FinTech play 2017 61
Total banking assets Total financing assets Total investment accounts
92
80
30
60
90
150
120
2011 2012 2013 20152014
US$
b
121
16
0
30
60
90
150
120
2011 2012 2013 20152014
US$
b
40
60
30
60
90
150
120
2011 2012 2013 20152014
US$
b
8% 8%8% 11% 6% 13%
–40%
0%
–20%
20%
40%
80%
60%
80%
60%
2012 2013 20152014
Investment accounts YoY growth* Financing YoY growthAssets YoY growth 29% 3% 9% 10%
12%
–40%
0%
–20%
20%
80%
60%
40%
2012 2013 20152014–22%
13%
–40%
0%
–20%
20%
40%
2012 2013 20152014
Participation bankingConventional banking
Conventional banking CAGR 2011–15
Participation banking share
Participation banking CAGR 2011–15
24%
%
53%
Participation banking penetration in PakistanPakistan
GCC FinTech play 201762
Share of global market* Share of participation banking growth in 2015
Return on assets Return on equity Cost to income ratio
1.7%
0.5%
0.0%
1.0%
4.0%
2.0%
3.0%
2011 2012 2013 20152014
16%
10%
0%
10%
40%
30%
20%
2011 2012 2013 20152014
76%
43%
0%
20%
100%
40%
60%
80%
2011 2012 2013 20152014
17.5
9.1
2011 2012 2013 20152014
4%
6%
0%
4%
2%
6%
8%
10%
2011 2012 2013 20152014
18%30%
0%
40%
20%
60%
80%
100%
2011 2012 2013 20152014
Participation bankingConventional banking
0
8
4
12
16
20
GCC FinTech play 2017 63
EY leadership team
Our industry awards
Best Islamic Advisory
Firm, 2014
Euromoney Islamic
Best Islamic Advisory
Firm, 2013, 2011, 2010,
2009
London
WIBC Leading Islamic
Financial Services
Provider, 2008
World Islamic
Bahrain
Best Islamic Finance
Advisory Firm, 2009, 2008,
2007
World Islamic
Bahrain
Best Takaful Advisory
Firm, 2011, 2009
3rd International Takaful Summit,
London
Best Islamic Advisory
Firm, 2014
8th International Takaful Summit
ADIB — Appreciation Award, 2013
Islamic Economy Summit, Dubai
Thought Leadership
Award, 2013
Ashar Nazim
Gordon Bennie
64 GCC FinTech play 2017
proprietary, based on sample and is not meant to be fully
markets.
and industry observers, to identify key trends, risks and priorities.
factor.
• and Turkey
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
• input on the report.
GCC FinTech play 2017 65
Fawad Laique (Bahrain/KSA)
Ashar Nazim [email protected] twitter.com/@asharnazim
Muhammad Muzammil Kasbati [email protected]
Nader Rahimi(Bahrain)
Imitiaz Ibrahim(Qatar)
Muhammad Syarizal(Malaysia)
Wajih Ahmed(Bahrain)
Jahanzaib Mukhtiar (Bahrain)
Ken Eglinton (UK)
Khurram Siddiqui (UAE)
Merisha Kassie (South Africa)
Syed Hassan Sagheer (UAE)
Yasir Yasir (Indonesia)
Shoaib A Qureshi (Saudi Arabia)
Anthony O’Sullivan (UAE)
Selim Elhadef (Turkey)
Muzammil Kasbati (Bahrain)
Rashid Al Rashoud (KSA)
GCC FinTech play 201766
EY
About EY
confidence in the capital markets and in economies the world over. We
clients and who contribute to our communities. We are proud of our
specific advice.
ey.com/mena
The views set out in this publication are