Here's how banks can walk the line between innovation and security

Last November, the world’s largest bank – China’s ICBC – was hit by a cyberattack that disrupted one of its financial services divisions and led to wider-reaching problems. The breach caused institutions around the world to realise that as they continue to innovate and integrate new digital technologies in their systems, they need to protect their sensitive networks.

Secure banking and financial operations are a must as we navigate the rising risk of fraud and cyber-crime. Companies and people placing their trust in banks also need to trust that while the sector continues to adopt new technologies, it can also handle today’s challenges and unknown future risks.

According to PricewaterhouseCoopers’s Financial Services in 2025 report, the top two challenges for the industry over the next five years will be digital transformation and the effect of new technologies. With developments such as AI and the cloud taking the world by storm, as well as future generations – so-called digital natives – expect banks to provide modern services. It is thus imperative that the financial sector continues to invest in innovation.

Fraudsters are using convincing artificial intelligence voice-cloning tools to steal from people, but AI can also be used to detect fraud. AFP

The question is how can financial institutions walk the line between keeping their data and assets safe while engaging with new technologies?

No matter how fancy a building looks, it requires a solid foundation. The same principle applies to technology. To capitalise on opportunities in data analytics, the Internet of Things and AI, banks must first ensure they have a reliable, secure digital infrastructure.

Take for example, a major stock exchange that needs to upgrade its network. The entity is keen to adopt new technology, but its existing traditional network lacks the bandwidth to keep up with operations and doesn’t meet modern security standards.

By investing in a ‘fabric-based network’ – one that helps multiple, discrete and secure virtual networks to run seamlessly – the stock exchange can automate most management tasks, fortify itself against rogue activity and support more sophisticated applications. This is because fabric technology can integrate thousands of connected devices and diverse elements while keeping network traffic separate, which makes it easier for administrators to manage the network while reducing the potential impact of a breach.

Evolving technologies need to be approached with change-management skills, accountability and specific targets, but this also needs a deeper understanding of technologies in question

Just like any other strategy put in place by banks, evolving technologies need to be approached with change-management skills, accountability and specific targets. But this also needs a deeper understanding of the technologies in question.

Let’s look at AI. A short while ago, banks were experimenting with using AI and large sets of customer data to improve the banking experience by personalising offerings, not fully realising that the “emotional” element of money and money-related decisions makes using predictive analytics more complex than in retail or logistics.

Yet, AI can and should be used by banks in other ways such as to detect fraud. If used appropriately, AI could add between $200 billion and $340 billion in value to the sector, according to a 2023 report by McKinsey & Co.

As technologies change rapidly, innovative banks and other financial institutions will need guidance and awareness as they move forward. By implementing an easy-to-control network infrastructure, organisations can adopt technologies such AI while keeping mission-critical data and applications segmented from other parts of the network. This would enable them to test and roll out new changes without affecting daily operations.

Once financial institutions have the correct infrastructure strategy in place for their technology roadmap, execution will require the right talent and capabilities. The workforce of the future is clearly changing, which means the sector needs to decide on either upskilling existing professionals or investing in new capabilities, internally and externally.

The rise of generative AI and a growing number of customers and innovators who are dependent on digital technologies means that the traditional financial services era as we know it will change. Yet, given that the very nature of finance and banking is rooted in a risk-conscious culture and the need for stability, the sector will have to navigate those changes in a very different manner than other industries. It cannot and should not rush to adopt new technologies and trends merely because they work for other sectors.

By understanding technologies, however, and building up capabilities and infrastructure, as well as working with the right partners, banks can reap benefits while also preparing for the future. There are vast opportunities on the horizon and this decade will be challenging, but ultimately worth it. I, for one, am excited by what the future holds for this age-old sector.

Seven tips from Emirates NBD

1. Never respond to e-mails, calls or messages asking for account, card or internet banking details

2. Never store a card PIN (personal identification number) in your mobile or in your wallet

3. Ensure online shopping websites are secure and verified before providing card details

4. Change passwords periodically as a precautionary measure

5. Never share authentication data such as passwords, card PINs and OTPs (one-time passwords) with third parties

6. Track bank notifications regarding transaction discrepancies

7. Report lost or stolen debit and credit cards immediately

ESSENTIALS

The flights
Fly Etihad or Emirates from the UAE to Moscow from 2,763 return per person return including taxes.
Where to stay
Trips on the Golden Eagle Trans-Siberian cost from US$16,995 (Dh62,414) per person, based on two sharing.

Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks.

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.

8. Pillar 2 implementation

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

'Worse than a prison sentence'

Marie Byrne, a counsellor who volunteers at the UAE government's mental health crisis helpline, said the ordeal the crew had been through would take time to overcome.

“It was worse than a prison sentence, where at least someone can deal with a set amount of time incarcerated," she said.

“They were living in perpetual mystery as to how their futures would pan out, and what that would be.

“Because of coronavirus, the world is very different now to the one they left, that will also have an impact.

“It will not fully register until they are on dry land. Some have not seen their young children grow up while others will have to rebuild relationships.

“It will be a challenge mentally, and to find other work to support their families as they have been out of circulation for so long. Hopefully they will get the care they need when they get home.”