The Banking Executive Magazine - February 2022

ISSUE 158 FEBRUARY 2022 the BANKING EXECUTIVE 1 Editorial DIGITALIZATION & COMMUNICATION TECHNOLOGIES (ICT) No doubt that the economic world as we knew it is undergoing excessive changes. The changes have amplified consequence on our societies and communities. Financial services play a critical role in all of our lives. It is the major engine of modern societies. People assume that payments will be made, savings are safe, loans are available, and insurance policies will be honored and so on. Among what we take for granted as will is that financial services firms are subject to regulation and supervision and that Central Banks are safeguarding monetary and financial stability. Digitalization and communication technologies (ICT) are affecting all the sectors of the economy leading to significant changes in its structure. The overall consensus of digitalization which is understandable by all the segments of our society is that it can potentially boost firms’ productivity through several channels, but the final impact however, is spread through various dimensions and could be highly uncertain. Digitalization is a multi-layered trend that leads to more intense competition, enourmous concerns and fears alarm that it cause an increasing market concentration in some sectors on the back of others. Moreover, some studies find evidence that ICT and automation are related to labor market polarization, where mid-skilled jobs either lose value or disappear, while there is an increase in demand for high-skilled job-profiles linked to digital technologies. Another concern is cybersecurity threats, a challenge that is considerably distressing given the vast amount of valuable information created and stored in the digital economy. Adopting the new trends of innovation and digitalization can improve the quality and inclusiveness of the financial services, however, this openness should not compromise our existing standards. We ought to weigh potential benefits to efficiency and resilience, against potential risks to financial stability. Dr. Joseph Torbey, Chairman - World Union of Arab Bankers