{"id":1378,"date":"2018-08-02T10:57:46","date_gmt":"2018-08-02T10:57:46","guid":{"rendered":"https:\/\/www.mortgagefinder.ae\/blog\/?p=1378"},"modified":"2018-08-16T13:42:31","modified_gmt":"2018-08-16T13:42:31","slug":"are-uae-banks-ready-for-the-fintech-revolution","status":"publish","type":"post","link":"https:\/\/www.mortgagefinder.ae\/blog\/are-uae-banks-ready-for-the-fintech-revolution\/","title":{"rendered":"Are UAE banks ready for the fintech revolution?"},"content":{"rendered":"

Plans are underway to launch the online Real Estate Self Transaction (REST) system, meaning local mortgage lenders are going to have to modernise \u2013 fast.<\/strong><\/span><\/h2>\n

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When is the last time you wrote a cheque? In many parts of the world the answer is likely to be some time last century. But here in Dubai it could have been just last month \u2013 to pay your rent. Most banking processes in the UAE were formulated decades ago, and despite the introduction and widespread usage of internet banking and banking apps, the paperwork, policies and procedures that underpin them remain there.<\/p>\n

Opening a bank account or acquiring a mortgage in the UAE can at times require monk-like patience. This week, Will Rankin, a well-known business journalist based in Dubai, urged his readers to abandon cheques. \u201cI\u2019m not getting another cheque book,\u201d he wrote. \u201cLet\u2019s all refuse cheque books and force the UAE\u2019s banking system to accept modern, normal payment systems.\u201d<\/p>\n

Rankin\u2019s rant is perhaps misplaced. The popularity of cheques in the UAE is not a failure of the banking system (which does offer alternative payment methods) but a safety measure in a country with a lengthy legal process and a highly transient populace.<\/p>\n

Cheques hold more weight than legal contracts. They are contracts for the people, if you prefer. Is it the best system? No. But right now it\u2019s the best we\u2019ve got.<\/p>\n

In line with this, anyone who\u2019s been through the mortgage process here in the UAE knows that prior to disbursement you are presented with and forced to sign an undated cheque for the entire borrowed amount, plus interest.<\/p>\n

No doubt the biggest cheque you\u2019ll ever sign; a sword of Damocles-esque security measure for the bank. Should you stop making payments and become non-responsive, they\u2019ll bank the cheque knowing full well it will bounce. With a bounced cheque in hand, they can start legal action.<\/p>\n

No doubt Rankin is on to something; the UAE banking system needs to be overhauled and the Dubai government agrees. The Dubai Land Department (DLD) recently announced plans to launch Real Estate Self Transaction (REST), an online platform to conduct real estate trading and transactions including end-to-end online mortgage applications and disbursement.<\/p>\n

According to DLD, REST will simplify existing legacy-laden processes, and aims to facilitate the digitisation of real estate transactions and mortgages by Q1 2020. Any initiative that promotes transparency and eases the process for consumers should be applauded, but a Q1 2020 timeline is perhaps ambitious.<\/p>\n

Having personally gone through a mortgage refinance recently, I can attest to the many patience draining legacies that exist in the UAE mortgage process that will need to be completely rethought and re-engineered.<\/p>\n

Propertyfinder<\/a> Group owns the UAE\u2019s leading mortgage brokerage, mortgagefinder.ae, so thankfully most of the headache was handled by them. But even with the very best in the business at my full disposal, a number of tasks required my direct, physical presence:<\/p>\n