UAE Remittance Firms May Move Behind The Scenes As AI, Blockchain Reshape Services

(MENAFN- Khaleej Times) The UAE's remittance industry could increasingly move“behind the scenes” as artificial intelligence (AI), blockchain, stablecoins and tokenisation reshape financial services, according to LuLu Financial Holdings managing director Adeeb Ahamed.

Speaking at BIT on Tuesday, during a fireside chat on the UAE's remittance corridors, Ahamed said financial companies will need to rethink how they deliver services as technology takes on a greater role in transactions and decision-making.

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LuLu Financial currently follows a“human in the loop” approach, where AI-driven activity remains under human control. Ahamed said the next question for the industry is how much decision-making should eventually be handed over to AI.

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For Ahamed, however, greater automation does not necessarily mean removing every obstacle from the financial system.

“For me, AI is not (only) about bringing more efficiency. It's about how much friction you can take out of the financial system. And maybe 100 per cent of financial-system friction need not be taken out. Certain frictions are checks and balances that need to remain for the sake of the customer you're serving.”

UAE remittance customers demand speed, reliability, value

Ahamed said the remittance market is becoming increasingly competitive, with customers focused on three basic requirements - speed, reliability and pricing.

He divided the industry into three broad groups: traditional remittance-led companies, ecosystem players such as banks, telcos and wallets, and digitally led entrants seeking to use technology to disrupt the market.

“Remittance-led players” have transfers as their core business, making it a highly competitive and price-sensitive segment, he said. Ecosystem players, meanwhile, can use remittances as an entry point to offer customers a wider range of financial products.

“The ecosystem players have remittance as just one of the angles. This includes banks, telcos and wallet players, because they use remittance as a hook and not as an actual product to sell whatever they have.”

Digital-first companies have entered the sector expecting a large market with room for new players. But Ahamed said disruption is already part of the industry's daily reality.

The pressure ultimately comes from customers, who expect services to be fast, dependable and competitively priced.

“The customer has requirements: instant, reliable and optimised pricing. These are the three factors that the customer comes to you for, and these are the three factors that the customer leaves you for, as well. Unless you are always on top of the game, you never leave the game.”

Stablecoins and blockchain could reshape remittance corridors

Ahamed said remittance companies cannot afford to stand still as competitors introduce new technology and business models.

He said firms need to continually innovate, including across both customer-facing services and the underlying financial infrastructure, or“rails” that enable transactions.

“You have to constantly disrupt yourself and try to find more innovative ways to stay on top, because you're competing against a very large audience of competitors who want to create something new every single day - by disrupting on the retail side or disrupting on the rail side.”

The next major shift could come from new forms of digital money and financial infrastructure, including stablecoins, tokenisation and blockchain.

For UAE-based remittance businesses serving customers across multiple countries, the ability to use these technologies effectively could become increasingly important, Ahamed said.

“Then comes the new-age forms of currencies - stablecoins, tokenisation and blockchain. The game is, whoever is able to use technology to its prime advantage is going to sustain and survive. The other guys are going to find it very hard to be the one.”

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