Market Introduction

Digital Services refer to the delivery of electronic data & content to the desired end-users using devices like smartphones, computers, etc., to revitalize business functions, culture, and customer experiences and meet changing business & industry requirements. UAE has emerged as the business hub for the entire Middle East & Africa. The BFSI & IT industries of the country are booming at a rapid pace. Foreign investments in these industries are registering an uptrend while digital transactions are exponentially increasing. Moreover, the UAE government is highly proactive toward ensuring the last-mile delivery of social benefits to their citizens.

Market Insights

The UAE Digital Services Market is projected to grow at around 9.49% CAGR during the forecast period, i.e., 2022-27. Across the Middle East, the UAE has been an early adopter of advanced technologies, such as cloud computing, Blockchain, Artificial Intelligence (AI), facial biometrics of citizens, Machine Learning, among others. It, in turn, has led to the rapid adoption of digital services in diverse sectors, including BFSI, telecom, government, healthcare, oil & gas, etc.

The digital services market in the UAE has witnessed exponential growth during 2017-20. Favorable government policies for process automation, paperless economy, Industry 4.0, etc., have augmented the demand for digital services like cloud services, business automation, analytics, etc., across the country. For instance:

• In 2021, Abu Dhabi Terminals (ADT) announced to automate ports by incorporating AI-based technologies, including smart container tracking, autonomous shuttle capabilities, & maritime asset, among others. ADT stated that it would deploy Microsoft's Azure Artificial Intelligence Services to optimize operational costs of ports.
• Previously in 2017, the government launched a smart & interactive electronic 'UAE Future Foresight Platform' to support the execution of the country's strategy to anticipate opportunities & challenges in critical fields, analyze them, and execute long-term pre-emptive plans to achieve national goals.

Moreover, initiatives like the National Innovation Strategy that aims to develop a culture of innovation among individuals & organizations, coupled with the TRA Vision that focuses on promoting electronic transformation while encouraging innovation across the UAE, have also bolstered the Digital Services Market in the country to a greater extent.

The country has also designed a Digital Transformation Strategy to strengthen its economy. As per the strategy, the government has launched an e-Health Information System, Digital Education, Basher (a digital platform that helps establish a business in the UAE within 15 minutes), cyber security modules for citizen safety, Unified National Digital Housing Platform, etc. These ongoing digital transformations initiated by the UAE government would continue boosting the demand for Digital Services across the country in the coming years.

Impact of Covid-19 on the UAE Digital Services Market

The Covid-19 pandemic in 2020 exponentially catalyzed the digital transformation in the UAE, with the surging adoption of smart technologies & effective digital solutions across both government & private entities. Eventually, the demand for digital services like cybersecurity strategies, business intelligence services, robotic automation, integrated cloud, and technology consulting observed exponential growth amidst the pandemic.

The sectors, such as BFSI, healthcare, IT, retail, etc., initiated several plans to deploy technologies like AI, automation, cybersecurity, etc., to accelerate the pace of existing systems and alleviate the impact of the pandemic. In addition, the UAE government also rolled out a digital strategy to provide end-to-end digital services 24*7. As a result, several organizations prioritized digital transformation by moving their business functions to the cloud to infuse increased agility & encourage customer engagement.

The BFSI sector has immensely benefited from the pandemic due to the paradigm shift of consumers from offline to digital transactions. The rise in the number of contactless & cashless transactions to minimize physical interactions significantly propelled the market growth in the country. Furthermore, owing to a significant surge in cashless transactions, banks & financial intermediaries also augmented the adoption of digital platforms to minimize online banking costs for consumers.

Key Trend in the UAE Digital Services Market

• Surging adoption of E-Signature solutions

Electronic signatures are recognized legally in the UAE. In 2021, the country made several reforms to the existing regulations. As per new regulations, digital signatures of individuals hold equal weightage as physical ones and can be used for any civil or commercial transaction, including marriage, personal status, notary, and real estate services, such as renting, buying, selling, & amending contracts.

The e-Signature option is gradually witnessing acceptance among several organizations in the UAE with the ongoing digital revolution. The utilization of e-signatures is expected to witness considerable growth due to the mounting penetration of digital banking platforms, rise in stock trading activities, and mounting digitalization of healthcare records.

In addition, the Government of Dubai, in December 2021, announced that all its operations have become entirely paperless. All the government work, transactions, processes are now managed online through an integrated platform to provide a smart, easy, and better life to the UAE citizens. This major strategic event would bolster the growth of digital signatures across the country over the forecast years. The paperless strategy of the Dubai government that started in 2018 has achieved its final summit, and all 45 government departments are now paperless. This strategy has helped save more than USD 350 million in revenues, 336 million paper, and over 14 million man-hours for Dubai Government.