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The Risk Facing Financial Services providers in the UAE
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1)The risk facing financial services providers in the UAE – in responding to this question, you need to consider the risk facing financial services providers in general and then consider what specific risks there are in the UAE context that should keep a very sharp focus on.


  • Credit Risk
  • Concentration Risk
  • Counterparty risk
  • Behavioral risk
  • Business risk
  • Market Risk
  • Market illiquidity risk
  • Valuation Risk


2) Business model risk of financial services providers in the UAE. In the responding to this question, you need to consider the different business models that may be adopted by financial services providers and specifically discuss the busines models of financial services firms in the UAE and the risks that these may present to the UAE financial system.



What is Business Model Risk?

Ø“The current or prospective risk to earnings and capital arising from changes in the business environment and from adverse business decisions , improper implementation of decisions or lack of responsiveness to changes in the business environment”.


Simply put -the risk they won’t make enough money… or highly

vulnerable to excessive losses

Business Model so vulnerable and weak they will not survive


  • A complementary analysis to the Business Position analysis by rating agencies


Busines :The comparative analysis for business position comprises all banks with a similar

Position: Industry risk score.A bank is generally compared with all banks in its home country.

How Robust are UAE Banks’ Business Models?


Regional Risks


ØLow oil prices for the foreseeable future

ØHeightened credit risks in some GCC countries

ØConcentrated ownership, exposures and funding sources

Regional Risks


Credit Risks


ØCredit risks and legacy –Covid 19

ØRegulatory and compliance risks (including AML)

ØCyber threats

ØPoor risk management yes-man culture

ØDigital and Fin-tech competition

ØBasic Competition level and participants




Global Risks



ØSignificantly reduced tourism and travel 

ØLow-for-long interest rates and depressed profit margins

ØOverall subdued economic activity and customer defaults


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