Doha - MENA Herald: A new wave of disruptive technology and on-going instability in energy markets are likely to be two of the dominant trends affecting the global economy in 2016, according to experts speaking at The Euromoney Qatar Conference, which finished on Thursday.
The two key issues were examined in panel discussions during the second day of the event.
On the “Technology and Finance” panel, senior executives from Hive Technology, FinTechStage, Qatar National Bank and Visa outlined some of the innovations that are impacting the financial sector, as well as the challenges preventing institutions from fully realising the benefits of these technologies.
One area that is likely to generate significant disruption is the move towards mobile and online payments, and the wider social shift to a “cashless society”. In the GCC region, where 90 percent of retail transactions are still conducted in cash, the adoption of more cashless payment channels is likely to have a transformative effect.
“At Visa, we have a vision for a cashless society, enabling a connected world where you can make a payment wherever you are,” said Hadi Raad, Head of Emerging Products and Innovations, CEMA, Visa. “We see significant benefits for consumers and for organisations in making this shift.”
“The challenge for organisations looking to promote digital money processes is that you’re trying to replicate the immediacy of payment and full value that cash offers,” explained Lazaro Campos, Co-Founder, FinTechStage. “The move towards a cashless society is taking place, and we will need central banks, financial services companies and technology leaders to work together in order to stay ahead of the pace of change.”
Duncan Fairley, Head of Group Operational Risk, Qatar National Bank, highlighted some of the challenges that disruptive technologies are creating: “Technology risk is very prevalent today. Organisations need to recognise that new technologies can provide tools to mitigate risks – by identifying fraud attempts and verifying identities more accurately – and also that these technologies themselves can generate new risks. The next generation of cyber-threats – which include identity theft, ‘spoofing’ and theft of assets online – will require a new skillset and operational model by banks and financial institutions.”
In the Energy Strategy session, speakers focused on falling demand from industrial powerhouses around the world, such as China and the BRICs, which has driven oil prices down in 2015.
With global demand expected to remain weak in the first half of next year, senior executives from leading asset managers and energy companies agreed that the disruption of the last 15 months is likely to continue.
However, the panel also noted that oil supply is continuing to fall, as less economically-viable projects are postponed and cancelled. For example, the US rig count (the number of rigs searching for oil and gas) declined to the lowest level since 1999 in December, with 737 rigs engaged in exploration and production – less than half the 2014 level of 1,920. Given the current dip on the supply-side, several analysts expect demand will outstrip supply as early as April 2016, leading to a recovery in oil prices.
The gas market is also likely to begin to recover in 2016, as nations around the world look to reduce emissions and introduce cleaner energy sources. Gas demand globally has grown at a better rate than oil in recent years – averaging 2.5 percent – and is likely to increase as more nations look to phase out coal and other “dirty” fossil fuels.
As a result, the longer term picture is positive for nations like Qatar and other energy producers in the GCC, given their long-term investments in the sector and their status as low-cost producers.
Victoria Behn, MENA director for Euromoney Conferences, summarised the impact of the event: “The Euromoney Qatar Conference 2015 has been a significant success, attracting a high volume of senior executives and also stimulating vital discussions on key topics affecting the world economy. Today’s sessions on disruptive technologies – and the first day’s focus on Qatar’s strategy in the wider global economy – have helped to clarify the opportunities and challenges that we will all face in the coming year.”
The Euromoney Qatar Conference will return to Qatar in December 2016.