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<p align="justify">First Abu Dhabi Bank (FAB) is the complete services financial services company based in Abu Dhabi, United Arab Emirates. The bank is one of the largest financial institutions in the UAE; it was formed after First Gulf Bank (FGB) merged with the National Bank of Abu Dhabi (NBAD). FAB has its presence in five continents; it provides services in corporate banking, personal banking and investment banking. The bank has a foreword-looking culture to promote innovation and technology to achieve the desired efficiency. The bank has an inclusive culture where they make diverse teams to help amplify the different perspectives in the decision making process. FAB acknowledged its responsibility regarding the environment and climate change and was rated A- by the CDP, a non-profit which enables companies to manage and measure their environmental impact (First Abu Dhabi Bank, 2021). Porter&#8217;s five forces analysis will determine the threat and opportunities FAB faces.</p>
<h2 align="justify">Competitive Rivalry In The Market</h2>
<p align="justify">The financial services sector is usually competitive globally due to the number of companies offering the services. However, the competition in the financial services sector is classified as monopolistic competition, where many small and large banks exist but they all compete on similar products. UAE&#8217;s economy is expected to grow 4% in 2021; it is propelled by the growth in the financial services sector (Faridi, 2021). In the UAE&#8217;s market, the major competitors of FAB are Abu Dhabi Commercial Bank (ABCB), Emirates NBD and Dubai Islamic Bank (DIB). In 2020, FAB reported revenue and profit of $7.4 billion and $2.8 billion, respectively (Forbes, 2021). ABCB reported revenues of $4.8 billion and a profit of $960 million (Forbes, 2021). In the same financial year, Emirati NBD reported revenue of $9.7 billion and earned a profit of $1.7 billion (Forbes, 2021), and DIB reported a profit and revenue of $3.6 billion and $745 million (Forbes, 2021). The industry is saturated and is in a state of monopolistic competition.</p>
<h2 align="justify">Threat of Substitutes</h2>
<p align="justify">The threat of substitutes appears to be low in the foreseeable future. The threat is perceived to be high when better alternatives are available and offer a better price. Moreover, they met the need of the customers and are alleviating the pain points. The financial services industry is a well-suited candidate for the disruption because of its data-intensive nature and the potential for improvements in services and efficiency. Technological adaption would allow companies to automate mundane tasks and utilize vital human hours on more productive tasks. The companies in the financial technology sphere are gaining ground and are trying to innovate and provide solutions for the existing pain points. These companies are reducing costs by leveraging technology and including the untapped market. UAE is the home to 24% of fintech companies in the Middle East, and the startups mainly focus on payments and remittances (Finextra, 2021). However, the offered products target the specialized one-off products offered by existing banks; therefore, banks face moderate to a low threat. The need for innovation remains imminent for the incumbents to survive and probably thrive.</p>
<h2 align="justify">The Threat of New Entrants</h2>
<p align="justify">There are inherent barriers associated with each industry; the financial services industry has certain caveats attached. The significant barriers comprise: high capital requirement, regulatory compliance and established incumbents. The banking sector is highly regulated because of the far-reaching consequences of intended or unintended misdeed. The other caveat is the established incumbents; in UAE, banks offer similar products and strive to differentiate. The market is already saturated, and it deters the newcomers. Last but not least, the high initial capital requirement is difficult to fulfil. Now, venture capital has partially eased that problem; promising startups can get financed by the investment firms to share the equity. Middle Eastern fintech is expected to grow to around $2billion by 2022, which will expand the ecosystem to 465 companies compared to 30 companies in 2017 (Alothman, 2020). The threat of new entrants is moderate to high in the UAE financial services sector.</p>
<h2 align="justify">Bargaining Power of Buyers</h2>
<p align="justify">In general, consumers can exercise high bargaining power in the financial services sector. The digital era has made online product offerings more acceptable. Online products are considered an essential part of consumer-facing banking. The implosion of technology startups has made convenience an essential component of each product. This change has forced the incumbents to embrace the technology are improve products and services. Buyers can drive the profits by demanding better prices or going to a competitor and resultantly losing business altogether. Incumbents are under pressure to innovate for their survival; this improves competition in the market (Zarrouk et al., 2021). Buyers are aware of their importance and require the best value services at a suitable price. Therefore, buyers hold moderate to high bargaining power.</p>
<h2 align="justify">Bargaining Power of Supplier</h2>
<p align="justify">Suppliers&#8217; power depends on the underlying factors such as the nature of supplies, the number of suppliers, the concentration of suppliers, and the importance of the suppliers&#8217; products. Usually, suppliers hold moderate power in the financial services sector. The essential sources can be classified as retail customers, institutional or bloc investors and financial experts. Individual customers are essential for the business, but a single individual cannot hold high bargaining power; they can negatively impact by triggering a social exodus. The institutional investor only lends after conducting a thorough investigation and when the banks risk profile is acceptable. They are an essential source of supplies for the bank. When suppliers&#8217; inflows are essential for the buyers&#8217; supply chain, buyers over-reliance on a supplier, consequently increase the supply chain risk (Tomlin, 2009). However, there are ample financial experts in the leading financial hubs and have low bargaining power. Considering the facts, suppliers have moderate to high bargaining power.</p>
<h2>References</h2>
<p>Alothman, A., F. (2020). Competitive Advantage: Exploring The Middle East&#8217;s Potential To Become A Global Fintech Hub. Entrepreneur Middle East. Available at: https://www.entrepreneur.com/article/351844</p>
<p>Faridi, O. (2021). Dubai and UAE Economy Expected to Grow 4% in 2021, Supported by Financial Services and Nascent Fintech Sector. Crowdfund Insider. Available at: https://www.crowdfundinsider.com/2021/01/170887-dubai-and-uae-economy-expected-to-grow-4-in-2021-supported-by-financial-services-and-nascent-fintech-sector/#:~:text=Search-,Dubai%20and%20UAE%20Economy%20Expected%20to%20Grow%204%25%20in%202021,Services%20and%20Nascent%20Fintech%20Sector&;text=Dubai&#8217;s%20economy%20is%20projected,to%20the%20COVID%2D19%20pandemic.</p>
<p>Finextra. (2021). FinTech In The Middle East: 2021 Forecast. Available at: https://www.finextra.com/blogposting/19845/fintech-in-the-middle-east-2021-forecast</p>
<p>First Abu Dhabi Bank. (2021). Sustainability. Available at: https://www.bankfab.com/en-ae/about-fab/sustainability/environment</p>
<p>Forbes. (2021). Abu Dhabi Commercial Bank. Available at: https://www.forbes.com/companies/abu-dhabi-commercial/?sh=4ef46c074693</p>
<p>Forbes. (2021). Dubai Islamic Bank. Available at: https://www.forbes.com/companies/dubai-islamic-bank/?sh=1c64ecf733fb</p>
<p>Forbes. (2021). Emirates NBD. Available at: https://www.forbes.com/companies/emirates-nbd/?sh=793b2f551057</p>
<p>Forbes. (2021). First Abu Dhabi Bank. Available at: https://www.forbes.com/companies/first-abu-dhabi-bank/?sh=166f97647078</p>
<p>Tomlin, B. (2009). Impact of supply learning when suppliers are unreliable. Manufacturing &; Service Operations Management, 11(2), 192– 209.<br />
Zarrouk, H.; El Ghak, T.;Bakhouche, A. (2021). Exploring Economic and Technological Determinants of FinTech Startups’ Success and Growth in the United Arab Emirates. J. Open Innov. Technol. Mark. Complex. 2021, 7, 50. https://doi.org/10.3390/joitmc7010050</p>
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