59 minute read
Post show report
The New Rules of Engagement
On the 17th of March, 2021, senior bankers and top executives from several leading regional and global financial institutions gathered for the MEA Finance and BACKBASE Roundtable in Dubai to get insight into and debate how regional banks can develop robust customer acquisition, engagement, and loyalty strategy in the current and post pandemic environment
Advertisement
The Middle East region’s banking sector is buzzing with talk and activity around digitisation. The emergence of Open Banking and its regulation; the customer digital journey and onboarding, as well as how banks can develop a robust customer and engagement strategy amid the COVID-19 pandemic is forcing the acceleration of digital banking at unprecedented speed. No function, service, or department seems immune to the wave.
Bankers from several Middle East financial institutions gathered for the BACKBASE and MEA Finance Roundtable themed “Developing a Robust Customer Acquisition, Engagement & Loyalty Strategy” in Dubai.
The discussion was opened by Saqib Khan, Sales Head for the Middle East at BACKBASE who highlighted that the roundtable was an opportunity for all in attendance to give their perspective on digital selling in line with the current
operating environment, how GCC banks can enhance digital banking with a particular interest in the surge in mobile banking, customer onboarding, augmenting user experience (UX) as well as customer acquisition and retention.
Next in line was a virtual presentation by Ali Ghuloom, Head of Digitization and Projects Management at National Bank of Bahrain (NBB), who shed more light on NBB’s digital transformation underlining issues to do with digital onboarding, implementation timeline, migration from legacy to digital platforms and how banks can enhance customer experience.
Amsterdam-based BACKBASE works with around 120 banks globally and the company has its regional offices in Dubai. As one of the world’s leading digital-first banking platforms that seek to enhance banks and financial institutions’ digital transformation, BACKBASE caters to the requirements of tier 1 and tier 2 banks, challenger banks and digital-exclusive such as YAP.
In the Middle East region, the firm has worked with nine banks such as the National Bank of Iraq, Bank ABC, NBB, Societe Generale, Qatar Islamic Bank, Kuwait International Bank, ila Bank among others. Khan said that the adoption of mobile and online banking has soared in the last 12 months following the outbreak of the COVID-19 pandemic which underscores the current operating environment for the financial service sector globally. He also highlighted how changing customer behavior is expected to eliminate retail bank branches and ATMs in the future.
What lessons can banks learn from their changing operating environments and evolving customer preferences especially following the outbreak of the pandemic? Across the world, around 12% of consumers reportedly tend to change from one bank to another annually and in that regard, it should be noted that retaining a customer is easy but acquiring new customers is difficult for all types of banks.
The bigger question becomes what should banks do to regain lost customers?
NBB’s digital journey
NBB’s Ghuloom highlighted that digital transformation is not a new phenomenon, it started with the first industrial revolution and it is the driver of many industrial developments in the present-day fourth industrial revolution and the banking sector is not immune to automation of services and products. NBB commenced its digital transformation journey in 2017 when the national bank decided to shift from its legacy system of 20 years – including products and services into a digitalized bank in a project that is expected to be completed in two years.
However, after NBB’s management assessed the bank’s transformation roadmap and concluded that the core focus of the digitalization process was the customers, they approached BACKBASE to enhance the digital onboarding process as well as customer experience.
Asked why NBB made customer onboarding a focal point for their product roadmap, Ghuloom said that the bank’s slogan is “Closer to you”, meaning close to the customer and it was the main driver that led the national bank to place customer onboarding at the core of its digital transformation. To enhance user experience, NBB had to make sure that their new digital service will offer a seamless experience to the customer.
Similarly, customer segmentation contributed to NBB’s decision to put customers first in the bank’s digital journey. Ghuloom emphasized that NBB’s
– Saqib Khan, Sales Head - Middle East, Backbase
current market segment is made up of customers who are 30 years and above hence, for the bank to widen its customer base and tap into the growing segment of Gen Z, the lender considered piloting new products and services that would meet the requirements of this new market segment that the bank did not have.
Therefore digital transformation in the banking sector is being driven by the quest to enhance services and products as well as tap into new market and customer segments.
In benchmark terms , NBB was guided by three pillars from the beginning with users being the point of focus as the bank looked at providing intuitive user interfaces among other seamless products which entail how the Bahraini lender leveraged innovation by choosing the right technologies from BACKBASE to offer customers a seamless digital journey. According to Ghuloom, GCC banks should make customer experience enhancement the focal point of their digital transformation journey. He added that in the legacy system customer onboarding at a bank branch used to take 180 minutes if not more while the difference to digital onboarding on the mobile app takes a maximum of seven minutes. Similarly, it was 50 steps between signing in the documents required to open a bank account until the printing of a debit card, but digitalization has reduced it to 28, and it used to take between one and three days, but the new platform allows it to happen instantly, hence augmenting customer experience as one of the main pillars in digital transformation.
In terms of external benchmarking, Ghuloom said that the main goal of digitalization was not to benchmark NBB against other banks but rather to improve the customer journey. However, NBB reiterated that it managed to reduce the number of steps required to open an account from 50 to 28 which is a milestone achievement from where the bank was before. So again, if a bank focuses on the customer and creates a
personalized relationship with customers and you have a good UX (user experience) -oriented team backed by good and solid technologies, “I believe one can always challenge themselves and come up with a seamless customer journey,” added Ghuloom.
Given that Bahrain is the smallest of the six-nation GCC-bloc with a population of around 1.5 million people, NBB unveiled its digital platform one and a half months ago and currently, the national bank is the biggest in the kingdom in terms of market share and operating model. As of March 2021, NBB had managed to onboard 600 new customers digitally in one and a half months since the launch of the mobile app. And in Ghuloom’s words, it was a seamless tracking for NBB customers, as the bank witnessed 12,500 active users on the new app and 20,000 downloads from iOS and Google Playstore. For NBB, Ghuloom said that these numbers were a testimony of the bank’s successful digital journey.
Digital banking in the GCC
The outbreak of the pandemic brought about more than a decade worth of changes in the way banks do business in just a few months. KPMG has said that with 80% of revenue growth predicted to come from digital offerings and operations over the next three years, financial services providers should continue transforming their operating models and investing in key enablers, like integrated cloud platforms, agile ways of working, intelligent automation,
AI, blockchain, and advanced data and analytics.
Sonny Zulu, Managing Director, Retail Banking, Standard Chartered Bank UAE, stressed that different banks have different approaches to the customer journey, as was said during the proceedings of the roundtable adding that, “there are a number of banks that decided to say, let’s start a separate digital bank, completely different.” He gave an example of how Standard Chartered Hong Kong launched Mox, a cloud-based virtual bank that offers a combination of retail banking services as well as lifestyle benefits all in one mobile app.
Zulu went on to share the banking group’s experience with digital banking, saying its more efficient, it implements changes swiftly compared to legacy systems, adding that the legacy system operated on fifty-year-old technology and transforming requires a banking institution to “bring in a lot of API’s and it takes a long time just to get it done.”
Rafik Majiti
Mashreq Bank
Abdul Rahman Jaroudi
Aafaq Islamic Finance
Devid Jegerson
National Bank of Fujairah
Sonny Zulu
Standard Chartered Bank UAE
Roy Villareal Citibank Middle East
Financial service providers in the GCC region are pro-innovation and senior bankers who attended MEA Finance and BACKBASE’s Roundtable said that this trend is here to stay driven by customers’ evolving needs and a conducive regulatory environment.
“Digital transformation is no longer a luxury, but a necessity. Banks that are agile, flexible, and willing to transform their business models will be the ones that succeed, and secure their financial strength for future growth,” said KPMG.
The environment that GCC banks are currently operating in is putting to the test the digital transformation journey of several financial services providers across the region and in some cases the decision-makers are being forced to revisit their transformation plans and make the customer’s journey the focal point of their digitalization efforts.
Shadi Al Nasr, Head of Retail Portfolio, Strategy & Wealth Management, Retail Banking, United Arab Bank (UAB) weighed in saying that due to the changing operating metrics, there is not a single bank that is not considering digitizing its services and products due to the pandemic, however, different banks take different approaches as was stressed by Sonny.
Al Nasr also highlighted the importance of banks collaborating with fintechs to enhance customer experience, saying UAB had three options to choose from when the bank decided to go digital including a digital-exclusive model, a neobank that leverages legacy bank systems or a hybrid model (challenger bank). But to fully come up with a digital bank that offers the best customer journey, UAB had to rope in fintech experts to develop the business strategy and paperwork to use in its transformation journey.
McKinsey & Company said that millions of bank customers have now embraced fully integrated mobile banking experiences, using smartphones, tablets, and wearables to do everything from e-commerce products and services to open new accounts and make payments.
The regional financial service sector’s digitalization drive is partly self-motivated. GCC lenders are proinnovation and industry experts expect them to continue to dominate the banking scene even as the sector goes more digital. Similarly, the banks’ tech-savvy customers and regulatory initiatives such as regulatory sandbox and open banking will also accelerate the banks’ digital transformation.
Asked about the conversion rate and cost of acquisition for the mobile app versus classical banking by Banali Malhotra, Marketing Director, RAKBANK, Ghuloom said that with the app the conversion rate soared to 10 from 4 when NBB was using legacy system underscoring the increase brought by digital onboarding. On conversion cost, Ghuloom said that though he did not have the statistics with him there was a notable reduction when opening a bank account digitally.
According to strategy, “Banks are partnering with fintechs and investing in new digital solutions for their home markets.” The Arabian Gulf market has significantly advanced compared to its
peers in the emerging markets in terms of the approaches that the banks are taking in their quest to enhance their services and products.
One of the key highlights from the BACKBASE and MEAFinance Roundtable is that there are a least three models that are recognizable when it comes to digital banking. Sridhar Iyer, Executive Vice President & Head of Mashreq Neo, said that there are three models in the banking industry, that is native digital banks like Revolut, the second type is like Mashreq Bank which runs both mainstream and digital bank and the third type is that of legacy system banks
digitizing their operations. However, in as much as these banks appear similar to each other, Iyer said that these banks are different in terms of management’s mindset, business approach and how they are evaluated.
In September 2019, UAE-based Mashreq Bank and Emirates NBD launched digital-exclusive banks for SMEs, NeoBiz and E20 respectively, in a bid to support one of the country’s important sectors and this came two years after NBD unveiled Liv., a lifestyle digital-only bank targeting millennials.
Similarly, the UAE’s first independent digital banking platform, YAP, was launched in March. Just like other neobanks, YAP reportedly offers spending and budgeting analytics, peer-to-peer payments and remittances services, and bill payments however it does not offer traditional banking services like loans and mortgages. YAP does not have a banking license of its own but has partnered with the National Bank of Ras Al-Khaimah (RAKBANK) which will provide international bank account numbers to users of the neobank.
UAE is expecting another neobank from ADQ following the holding company’s October 2020 announcement that it was considering setting up a digital bank using a legacy banking license of First Abu Dhabi Bank. Banks have used digital to enter new markets, such as FAB’s Saudi offering FAB KSA.
In Bahrain, Bank ABC launched ‘ila Bank’, AI-powered and data analytics
digital- exclusive bank entity foraying into the neobank market intending to expand the digital bank’s operation across the entire MENA region.
Yusra Baqi
Aafaq Islamic Finance
Banali Malhotra
RAKBANK
Ahmad Shraim
United Arab Bank
Shadi Al Nasr
United Arab Bank
Ali Ghuloom
National Bank Bahrain (NBB)
Prioritizing UX (User Experience)
The moderator, Mohamed Roushdy, the CEO of Fintech Bazaar, said, “While digital technologies play a vital role in transforming digitally, more important aspects need to be considered like processes, people and cultural changes, it needs a holistic approach.”
He also said that digital transformation might be a better way for banks to reinvert their business and different banks follow different approaches as was highlighted by other speakers.
Digitalization in the financial services sector is swiftly changing the field of play where legacy banks are facing increasing competition from nontraditional entrants who are billing on customer experience as their point of sale and for GCC banks it›s no longer about the products and services on offer but enhancing UX.
Yusra Baqi, Head of Corporate Communication and Happiness, Aafaq Islamic Finance said that for banks, customer experience and the customer journey should be the priority before anything else in digitalization. So, throughout the customer journey, banks should assess whether they have fulfilled a client’s requirements number one, did the client complete their journey without dropping off midway number two, and have any challenges and complaints
raised by the customers been addressed number three, she added.
KPMG said that banks are keen to digitize their customer experience, their services, and their products and this entails expanding beyond the confines of their traditional bricks-and-mortar service models.
Roy Villareal, Digital and Marketing Head, Citibank Middle East, said that digital transformation should be a holistic approach and can not be done in isolation where banks enhance the digital journey and miss the other parts of the journey because, “customers nowadays continue to evolve as well, in the channels of choice,” they can visit a bank branch, use mobile phone banking or opt for an email conversation package.
Deloitte has said that digital banking champions are those banks who are
(will) successfully offer a wide range of functionalities that meet their customer’s expectations, providing an intuitive user experience.
Abdul Rahman Jaroudi, Head of Distribution Channels, Aafaq Islamic Finance, asked about the overall timeline of the digitalization and project implementation, Ghuloom said that the project comes with a lot of challenges, adding that multiple projects and activities take place when a bank goes digital. “But if you are talking about development, just the development of the mobile app itself took 14 or 16 months, we then decided to have more time of testing. That’s why we took more time before we went live. We started November 2019 and went live in January 2021”, he added.
McKinsey & Company has identified three trends underscoring banks’ urgent need to embrace digital: strong customer adoption, increasingly multichannel consumer decision journey and customers’ openness to purely digital propositions.
Since banks cater to different customer segments who also have diverse needs and profiles, the landing page on the mobile app (website) should also enable a direct and meaningful segmentation for each customer, according to EY. Segmentation of customers from the landing page enhances user experience and facilitates robust customer acquisition engagement and loyalty in the future.
For banks to have a holistic approach to customer experience, Zulu emphasized that the “customer journey is very critical,” adding that the way some banking organizations are structured is impeding their digital agenda.
“In many of the institutions today, in many of the markets, we have to accept it, we haven’t yet transformed, the mindset hasn’t yet. In several organizations there are loopholes, a company has a good compliance team that has very good knowledge about the digital platforms and how they work, and how we can be able to meet these requirements to digitalized but you still have a guy coming from the old generation and planning almost entirely everything in an old way without proper understanding of a bank’s digital journey,” he said.
Zulu went further to say in as much as there is need for banks to engage with regulators, some areas cannot wait for regulation to change. “Some banks have experienced teams, but they still have an outdated operating model whereby they’re still visiting branches, checking what is happening among other things but they have never paid attention to the journey on the digital platform, which means they are working in a completely different world and they don’t even know what are the complaints being raised by customers? what are the issues? what are the pain points?” he added. Data shows that some clients are dropping off the customer journey because they would have failed to proceed to the next stage, issues that may be left unsolved at financial institutions that run on an outdated operating model.
Digital onboarding
Customer onboarding is the first contact that a new user has with the bank and the process should be intuitive, seamless, responsive and efficient. It is defined as the guidance of customers in the first steps of platform accessibility and a critical step in a customer’s journey with a financial institution as it leaves a long-lasting impression in the clients’ minds about how they perceive a financial institution.
Guil Rodrigues, AVP Customer Experience and Design Lead, First Abu Dhabi Bank, said that there is a significant increase in mobile banking especially the adoption of digital wallets but although there have been teething troubles such as customer onboarding, fintech players like BACKBASE are refining the whole process, adding “more players are coming up and we are getting there.”
The implementation of digital onboarding is an essential feature that determines whether a bank can easily acquire new customers especially from the tech-savvy millennials, a key segment for GCC banks. “An automated process is a mutually beneficial situation offering speed, efficiency and convenience for the customers and bank professionals for more value-added tasks,” according to Deloitte.
Given that Bahrain was quick to adapt to global regulations when it comes to innovations, Ghuloom said that NBB is already in the process of integrating its eKYC. He highlighted that the advantage of eKYC is that when a financial institution intends to onboard a customer who has
already been onboarded by another entity, they will utilize the central repository which reduces the interactions between a bank and customer because the information is already in central eKYC.
Bankers who attended the MEAFinance and BACKBASE roundtable highlighted that regional lenders are leveraging their longstanding customer relationships and proven track record of reliability and sustainability to innovate as well as partner with fintech firms to enhance customers’ journey.
KPMG has called on banks to adopt three approaches to their onboarding process: protect – which entails the development of in-house processes and standards to ensure compliance with jurisdictional requirements in terms of data privacy and API guidelines; compete – that is investing in strategic enablers both in-house and externally including
internal data usage (e.g. unstructured, big data) and external (e.g. mobile app, social media) and to be innovative in products and services offered through the building of strategic partnerships with no-financial services players to enhance user experience.
There are different types of onboarding experience as was highlighted during the roundtable when Standard Chartered Bank’s Zulu asked whether NBB was primarily focusing on Current Account and Savings Accounts (CASA) or other products, Ghuloom said that currently the bank’s mobile app was focusing on CASA but would expand to other products line loans in the future.
In order to provide a seamless onboarding experience, GCC banks should focus on digitalization models that prioritize customer centricity, data insights, and agility but at the same time maintaining security and transparency.
Digital onboarding should remain as simple as possible with low documentation requirements as compared to customer onboarding in legacy banks, should offer simple online uploading capabilities, precise explanation during the onboarding process as well as interactive assistance through chatbots.
Asked by Dr. Mohit Lodha, Head of Digital Marketing, RAKBANK to share the number of steps on the input fields in the customer onboarding journey, Ghuloom that NBB’s mobile app has five different fields that a user has to input, then nineteen selection fields and four pictorial inputs, which
requires a customer to take a selfie for biometric identification.
In terms of due diligence, Ahmad Shraim, Head of Business Application Support, Information Technology, United Arab Bank asked if the mobile app caters to both low and high-risk customers and if there are cases where a customer may be required to visit a bank branch. Ghuloom said that if a customer is an exposed person, then they’re required to visit a branch, adding “we did not automate this”.
Open Banking revolution
Open Banking is a connected ecosystem of financial services that allows two or more unaffiliated banks to enrich their digital offerings safely and securely, bringing greater financial transparency and new and tailored customer services to the region.
According to Deloitte, “Open Banking is a platform-based business approach where data, processes, and business functionalities are made available within an ecosystem of customers, third-party developers, fintech startups, or partners.”
Rafik Majiti, Senior Vice President, Head of Digital, Mashreq Bank said that GCC banks should collaborate with regulators to clear the gray areas in digital banking and speed up to catch up with global trends.
However, Ghuloom highlighted that the Central Bank of Bahrain (CBB) is a pioneer in the Gulf region when it comes to innovation, adding that “when it comes to fintech and its regulation, they are the
Dom Monhardt Commercial Bank of Dubai
Saqib Khan
Backbase
Sridhar Iyer
Mashreq
Frederic de Melker
RAKBANK
Mohit Lodha
RAKBANK
Guil Rodrigues First Abu Dhabi Bank
Onboarding trends
In Singapore, the financial regulator, the Monetary Authority of Singapore, endorsed financial services providers’ use of digital onboarding (remote verification customers) which enhances the user experience while addressing security concerns such as money laundering and terrorism financing.
In the UK, challenger banks are using photo ID and smartphone cameras for what is known as ‘LivenessTest’. The use of real-time biometric traits for digital onboarding is growing prominence among banks to combat impersonation risk which one of the key concerns among regulators.
ones who are always experimenting with new financial technologies.”
Bahrain’s Data Protection Directive which came into effect in 2019 is the equivalent of GDPR in the European Union and the European Economic Area, said Ghuloom. Hence, Bahrain has robust Open Banking regulations, and it is also the first jurisdiction in the Mideast region to adopt Open Banking in 2018 replicating innovation trends in some of the world’s biggest financial hubs such as London, Singapore and Hong Kong, so when it comes to fintech innovation, “they are very supportive”.
The Gulf region is unarguably mature when it comes to regulators’ preparedness for Open Banking although some challenges such as outdated regulations are persisting as was highlighted during the roundtable.
Last October, Bahrain unveiled the Bahrain Open Banking Framework which provides a holistic definition of the country’s Open Banking regulation, guidelines, technical standards for Open Application Programming Interfaces (API) platforms, security standards (including data privacy), and overall governance.
In the UAE, PwC said that new Open Banking platforms are rising with fintechs and lenders moving towards the adoption of open API solutions amid the defining of the roadmap towards open financial markets by national and offshored regulators. The Central Bank of the UAE recently announced plans to open a FinTech Office to support financial innovation in the country while the Abu Dhabi Global Market proved its unwavering support towards the Open Banking revolution having awarded its first digital-exclusive banking license and Category 1 status to Anglo-Gulf Trade Bank in September 2019.
Devid Jegerson, Head of Customer Experience & Platform Development, NBF, argued the approach that banks are using in their digital journey saying, “I think that the game is different”, banks should not go digital as a way to compensate for the reduction in the number of people visiting branches but let it be an innovation-driven strategy. Jegerson posed a question to fellow bankers who attended the roundtable saying, “Are we able to see things the way they were 15 years ago? Are we able to have these kinds of skills to gauge what the client is doing with our service? But in his view, Jegerson
IN SEVERAL ORGANIZATIONS THERE ARE LOOPHOLES, A COMPANY HAS A GOOD COMPLIANCE TEAM THAT HAS VERY GOOD KNOWLEDGE ABOUT THE DIGITAL PLATFORMS AND HOW THEY WORK, AND HOW WE CAN BE ABLE TO MEET THESE REQUIREMENTS TO DIGITALIZED BUT YOU STILL HAVE A GUY COMING FROM THE OLD GENERATION AND PLANNING ALMOST ENTIRELY EVERYTHING IN AN OLD WAY WITHOUT PROPER UNDERSTANDING OF A BANK’S DIGITAL JOURNEY.
– Sonny Zulu, Managing Director, Retail Banking, Standard Chartered Bank UAE
stressed that banks alone cannot fully digitize faster amid central banks’ regulations, the introspective focus among other things.
Across the border in Saudi Arabia, the central bank introduced its Open Banking framework earlier this year in January, a move that is expected to revolutionize how customers, merchants and financial
services providers enhance the value they reap from accessing financial data. Saudi Arabia is investing in the development of its financial services sector as part of the kingdom’s economic diversification drive under Vision 2030.
Open Banking will enhance trust between customers, banks, fintechs and other financial players, and the Saudi Central Bank (SAMA) plans to go live with Open Banking during the first half of 2022.
“In practice, open banking can take many forms including standards and directives such as PSD2 in Europe and Open Banking in the UK. Consumers’ increasing desire for frictionless, more seamless, and intuitive valueadded banking experiences and there are a growing number of fintechs and ‘challenger banks’ seeking to capitalize on these developments,” said KPMG.
By using API, a set of communication protocols used to develop computer applications, Open Banking platforms authorizes retail and enterprise clients to access consumers’ financial data in realtime and share account information and transaction history with external parties such as vendors, suppliers, business partners and other banks.
In summation, the bankers who attended the roundtable discussed at length digital banking developments in the Gulf region, regulation challenges and trends that are shaping the future of the region’s financial service sector. Regulators in the Gulf region are coming up with policies to accelerate digital transformation and promote Open Banking. Customer experience and customer journey should be pivotal in every bank’s transformation journey and customer onboarding should be a seamless and efficient experience given that it is a critical step in a customer’s journey, and it helps financial institutions in customer acquisition and retention.
The BACKBASE and MEAFinance Roundtable was attended by representatives of several financial institutions in the UAE including Shadi Al Nasr, Head of Retail Portfolio, Strategy & Wealth Management, Retail Banking, United Arab Bank; Sonny Zulu, Managing Director, Retail Banking, Standard Chartered Bank UAE; Devid Jegerson, Head of Customer Experience & Platform Development, National Bank of Fujairah; Dom Monhardt, Head of Digital Experience, Commercial Bank of Dubai; Sridhar Iyer, Executive Vice President, Head of NEO and Liability Products, Mashreq; Frederic de Melker, Managing Director, Personal Banking, RAKBANK; Guil Rodrigues, AVP Customer Experience and Design Lead, First Abu Dhabi Bank; Roy Villareal, Digital and Marketing Head, Citibank Middle East; Rafik Majiti, Senior Vice President, Head of Digital, Mashreq Bank; Shadi Al Nasr, Head of Retail Portfolio, Strategy & Wealth Management, Retail Banking, United Arab Bank; Ahmad Shraim, Head of Business Application Support, Information Technology, United Arab Bank; Mohit Lodha, Head of Digital Marketing, RAKBANK; Banali Malhotra, Marketing Director, RAKBANK; Abdul Rahman Jaroudi, Head of Distribution Channels, Aafaq Islamic Finance; Yusra Baqi, Head of Corporate Communication and Happiness, Aafaq Islamic Finance; and Benazir Poonawala, Head Customer Experience for Retail Banking Group, Mashreq. It was moderated by Mohamed Roushdy, CEO, Fintech Bazaar.
DUE TO THE CHANGING OPERATING ENVIRONMENT, THERE IS NOT A SINGLE BANK THAT IS NOT CONSIDERING DIGITIZING ITS SERVICES AND PRODUCTS FOLLOWING THE OUTBREAK OF THE PANDEMIC, HOWEVER, DIFFERENT BANKS TAKE DIFFERENT APPROACHES.
– Shadi Al Nasr, Head of Retail Portfolio, Strategy & Wealth Management, Retail Banking, United Arab Bank
Building the Bank for Tomorrow
The outbreak of Covid-19 was a black swan event that forced an unprecedented acceleration of digitilisation across all sectors as governments implemented “stay at home” measures to curb the spread of the pandemic.In the GCC banking sector, the quest to tailor customer experience to each client and maintain a competitive edge in an overcrowded market had already paved way for digitalization well before the pandemic hit.
Digitalization in the Gulf financial services sector is a prime example of how banks are leveraging customer data, analytics and segmentation to improve their products and services as well as build a “bank of the future”. Artificial Intelligence (AI) can help banks unleash the power of big data while revealing insights into future investments, clients and competitors.
Customer feedback is credited for much of the revolution or evolution in the GCC region’s banking sector as well as the industry’s resilient growth over the last decade. “Customer insights, say through call center demand analytics, should feed into banks plans to help them increase response times and better serve customers,” says EY.
Big data is key to bankers. It is the manual that helps them meet customers’ preferences and expectations. Similarly, it is from this data that financial institutions explore new avenues of growth or new business models. “Advanced data analytics enable businesses, including banks, to enhance decision-making, improve service delivery, and tailor the service to growing customer expectations,” said Devid Jegerson, the Head of Customer Experience and Platform Development at NBF.
Customer data is transforming the banking sector and financial institutions are responsible for managing the data they collect. “Banks have the opportunity to intelligently use their data and seamlessly integrate it with the customer journey,” said Ahmad Dorra, Customer Engagement Solutions Sales Leader – Middle East, Africa & Turkey, Avaya.
Leveraging customer data
Although GCC banks had made significant progress in their digital transformation journey, digital banking was never fully embraced likely due to customers’ reluctance until the beginning of last year. But the outbreak of the pandemic accelerated the pace of digital adoption across products and demographic segments.
“GCC banks can leverage analytics capabilities at scale to achieve a new level of customer understanding and targeting,” says Jegerson. The unprecedented adoption of digital banking services across the Gulf region also widened financial institutions’ data collection and storage tools and as such, banks have amassed troves of consumer data and mines more every day.
Customer is king
GCC banks are increasingly collecting
significant amounts of data as improving customer experience has become key to maintain a competitive edge. To succeed or adapt to changing operating environment, banks and financial service providers across the Gulf region must understand the needs and expectations of their customer base.
“GCC banks are collecting more and more data as improving customer insight in a time of great change becomes a priority, and the analysis of customer feedback and its synchronization with CRM data delivers an effective CX template,” said Dorra.
Customer insight plays a critical role in product development and customer
communication in the banking sector. According to consulting firm McKinsey & Company, “Understanding what leads to a superior customer experience also enables banks to make thoughtful and efficient trade-offs.”
Banks and financial institutions can optimize customer feedback by integrating big data into their CRM and break it down using analytic solutions to gain insight into their clients’ current as well as future expectations. This also calls for GCC banks to implement robust customer segmentation policies that will enable them to develop new services and products to meet customer expectations.
In a report, GCC Banking Trends - 2021 and Beyond, Avaya said that a bank’s analytics should be fast, responsive, adaptable and flexible to enable the firm to address the problem at its root and should give real-time insights for a timely resolution.
Gaining insights into customers’ preferences is at the top of every management’s priority list as the preference for banking products has become more diverse. In 2017, Emirates NBD tapped into a new generation of customers by launching Liv., the UAE’s first digital bank targeted at millennials.
With the enhanced implementation of data segmentation, GCC banks will meet
their customer expectations, increase efficiency, accelerate growth and cutback operational risk.
Avenues of growth
While regulatory requirements limit the widespread sharing of customer data, GCC banks should cultivate the mythical 360-degree view of clients – one that accounts for their current value as well as their potential lifetime value to stay competitive in an overbanked market.
Mamoun Alhomssey, CIO at ADIB, said, “Clean data can help banks establish a personalized stream of targeted communications with customers by providing them with accurate, real-time understanding of their needs.”
Given how the financial services sector is generally ahead of the curve when it comes to possessing insights into their clients, the ability to spot and iron out any glitches is key to making self-service banking effortless and avoid reputational damage. “Your analytics strategy in an incredibly fast-moving world should enable your business agility and not cripple it,” Avaya said in a report, GCC Banking Trends - 2021 and Beyond.
When the pandemic made landfall on the shores of the Arabian Gulf almost a year ago, all regional banks swung to digital-only models moving nearly all their interactions with customers online to build solutions that better suited clients’ needs at that time.
Deloitte said that banks that have built their organizations with a product-oriented focus (if we build it, they will come) should consider shifting to a more customercentric footing.
Banks are also leveraging customer data to bring immense value to the sector through effective credit management, fraud management, operational risks assessment as well as integrated risk management. According to EY, the bank of the future will integrate disruptive technologies with an ecosystem of partners to transform their business and achieve growth.
A data-driven approach to digitalization can help banks’ security systems through the detection of fraud signals and analyze them in real-time using AI and ML to pinpoint illegitimate users and/or transactions before they compromise the entire banking system. In January, the UAE central bank imposed a combined $12.5 million fine on 11 local banks for compliance failure – penalties that can be avoided.
Similarly, the heightened use of digital banking is also exposing customers to cybersecurity. Alhomssey said that there has been an increase in online fraud in the UAE which has exposed customers to phishing and falling prey to fake but ‘genuine-looking’ bank websites.
Apart from analyzing and breaking up customers’ data long after they’re already
- McKinsey & Company
using a bank’s products, GCC financial institutions should look into developing real-time insights into individual prospects to generate interest to attract more clients or tap into new business models.
According to Deloitte, banks should have data and analytical experience as well as marketing and measurement capabilities to develop and implement an effective customer-acquisition strategy. In a bid to support one of the UAE’s important sectors, Mashreq Bank and Emirates NBD launched digital-only banks for SMEs in September 2019.
Next frontier
Customer segmentation involves the process of dividing clients into groups based on common characteristics - behavioral or demographic - allowing banks to market to each group effectively and appropriately.
As GCC governments grow their digital economies, the importance of data has never been greater. Several bankers globally are giving attention to the current state of affairs but in this global economic downturn, there is a lot that GCC financial services can do with their existing client bases. Banks should look at co-creating with customers frequently and often in a proposition lifecycle, said EY.
Deloitte stated that a leading customer retention strategy is to classify each type of customer (silent attrition, desired and dissatisfied) and create appropriate initiatives to change their behavior. Banks should implement customer retention strategies by understanding clients’ needs and expectations.
McKinsey also said that banks should analyze data for two kinds of insight: first, identify where changes in experience will result in different customer behavior that creates more value and find “breakpoints”—places in the journey where changing a particular element of the experience will have a disproportionate effect on the overall outcome.
If managed well, data analytics and segmentation can improve models of consumer behavior, giving c-suite executives in banks insight into future opportunities and risks that lie ahead.
Similarly, leveraging customer data is not always about revenue generation but organizations can use data strategically to reduce costs through better planning and optimization of operations as well as reducing and managing risk.
Customers are increasingly becoming more accustomed to the service standards set by e-commerce companies and carhailing platforms such as Amazon, Namshi and Careem, they also expect the same degree of consistency, convenience, and personalization from their GCC financial service providers. McKinsey stated that as customer propositions can no longer be static and one-size-fits-all—they should be intelligent and tailored, and go beyond banking to address customer needs that may involve both banking and non-banking products and services.
Amid an increasingly challenging operating environment intensified by the pandemic, GCC banks are compelled to leverage analytics and data-driven capabilities to tap into new avenues of growth, reduce costs and improve efficiencies, drive their digital footprint and bolster their risk and regulatory compliance priorities.
Avaya’s Dorra said that a bank’s analytics strategy in an incredibly fast-moving world should enable business agility and not cripple it.
Tapping AI and ML
The increase in technological changes is leading to a surge in the amounts of data being collected, processed, shared and used in digital form at a lower cost and on a larger scale. The European Banking Authority said that managing data is not new but the ability to store huge amounts of data in any format and analyze it at speed is.
AI and ML are driving an unprecedented shift in how financial institutions attract new customers and retain those already in the fold. In an era where customers can share their data, the ability to aggregate, manage and analyze data by banks will become increasingly important.
The use of cloud computing has also been an enabler of advanced analytics, as these computer system resources provide a space to both store and analyze large quantities of data in a scalable way, including through easy connectivity to mobile applications used by customers.
To remain competitive and drive value for their clients, GCC lenders will need to leverage AI while synchronizing data analytics with their CRMs to deliver a more personalized customer experience and develop innovative new propositions. “Analytics can help banks evolve new business models and provide more personalized offerings and even improve risk profiling of customers,” said Amit Malhotra, General Manager, Personal Banking Group at Commercial Bank of Dubai.
Deloitte said that the rise of advanced data analytics and cognitive technologies has also led to an explosion in the use of complex algorithms. The optimization of customer data will enable banks to broaden their offerings to clients, from helping them improve their wealth management to providing ideas on how to invest their money.
- Deloitte
Creating value from customer data
In an exclusive with MEA Finance,Ahmad Dorra Customer Engagement Solutions Sales Leader – Middle East, Africa & Turkey, Avaya, sheds light on how the COVID-19 pandemic has encouraged GCC banks to commit to digitization and how Avaya is helping them in this transition.
Tell us more about Avaya and the services that the company is providing to GCC banks to help them mitigate the impact of the pandemic on their operations?
Banks in the GCC have had to transform their processes and procedures very quickly, and over the past year, have shifted towards digitalizing the entire experience. Processes that required physical documentation had to be digitized, and branches had to reimagined if they weren’t closed. It was not easy, but the banks that got it right demonstrated that the digitally transformed customer experience was not only possible but also the best way forward.
Operating in a very stringent regulatory environment with regard to data privacy, access control, and security, banks also had to explore ways to connect employees with customer data, and employees with customers digitally. Again, a model that was built on the in-person interaction an verification model went online very quickly.
We’ve been helping GCC banks with that transformation. But more importantly we’ve been making the point that successful digital customer journeys, retail or not, are built with the principles of what makes a customer experience successful. The fundamentals of frictionless operation, simplicity, and hyper-personalization should apply.
Given the uncertainty surrounding the trajectory of the COVID-19 pandemic, how can banks leverage advanced customer data analytics to prepare for the next normal?
GCC banks are collecting more and more data as improving customer insight in a time of great change becomes a priority, and the analysis of customer feedback and its synchronization with CRM data delivers an effective CX template.
Your analytics strategy in an incredibly fast-moving world should enable your business agility and not cripple it. Regulators are either looking into or have initiated strategic plans to drive open banking in the GCC. We invite banks and regulators to be more creative with their use of data and pursue advanced analytics strategies.
Regardless, analytics should be fast, responsive, adaptable and flexible to enable you and your team to make fast decisions.
How did the outbreak of the pandemic deepen the changes in customer preferences and what challenges do these shifts bring?
Most executives we talk to say their banks are pursuing an app-centric banking relationship with both the SME and consumer segments, and that they have
seen substantial increases in mobile banking interactions as a result of Covid-19; some suggest that five years of expected growth occurred in just one year.
This comes with challenges. Some banks have struggled to meet user demands amid this growth, finding that most mobile banking users need customer support for queries, complicated questions or just reassurance, which is not always at hand. Our advice is to: Simplify: Think about the fundamentals of customer experience. Track the customer journey. Decide on the best channels for the best actions. Partner smart: Work with partners who keep you ahead of the fast-moving smartphone market. Keep evolving your customer-facing apps while never letting the fundamentals slip.
Stay ahead for the Everything Customer:
Continuously add new capabilities such as text chats in video calls, enriching customer journeys based on knowledge management databases, resolving complex issues based on customer preferences, proactively messaging customers to improve experiences, and providing security in-app using predictive analytics.
How can customer data analytics help financial services providers deliver frictionless experiences to maintain a competitive edge?
Our advice to banks is to use a data analytics strategy in such a way that it enhances their business. In order to prepare for the next normal, we would recommend a strong insights strategy that includes:
Solving the problem at its root: Make customer self-service effortless and embed virtual assistants to guide the customer journey, answer inquiries, and predict next-best actions.
Win-win situation: your workforce engagement solutions should give you deep, real-time insights needed for a timely resolution.
Working with experts is the way to go:
Work with experts who are aware of how to use customer data and be compliant.
They should also be experienced with
GDPR and similar regulations and business-agility conversant, to provide solutions relevant in a fast-changing regulatory environment.
What is your outlook on the financial services sector? And how can GCC banks use analytics to explore new avenues of growth or new business models?
The pandemic has encouraged GCC banks to commit to digitization in a way never seen before and to deliver services differently to customers. At the same time consumers and employees are reassessing their own values.
As the global economy enters 2021 at a subdued growth rate, bankers are managing in a challenging and dynamic operating environment, with significant pressure to ramp up the quality of the digital services they offer.
However, this uncertain banking outlook provides an opportunity to reconfigure working practices, customer experiences, and use better customer insight to drive sales. Banks have the opportunity to intelligently use their data and seamlessly integrate it with the customer journey. Already, data rules enable the marketing of personalized products and proactive messaging to drive sales in the consumer segment. We expect more of this to come as regulations open and business sales are added to the mix.
Data, food for growth
Devid Jegerson Head of Customer Experience and Platform Development at NBF explains that today, digital products and services are enabling GCC banks to learn more and bring customer insights. In a time of significant change, analysing customer feedback and synchronising them with CRM data is an opportunity for organisations to better adapt products to customer expectations and experiences.
From personal banking services to wealth management, how is data analytics reshaping the GCC banking sector?
Advanced data analytics enable businesses, including banks, to enhance decision-making, improve service delivery, and tailor the service to growing customer expectations. By understanding customer’s needs, the banking sector can have a more accurate picture of its community of customers to serve them better. The adaptation of the business products via customer data analytics coming from the customer perspective will bring a real and meaningful impact on the banking sector’s future.
At NBF, our strategy has been to respond to change with agility and thrive on it to enhance and strengthen our offering. Digital transformation has been sitting at the very centre of its development journey. Over the years, we have been working tirelessly to ensure the user experience reflects enhanced efficiency, better security and resilience, and faster or instant servicing. Our new branches are increasingly becoming more digitised and our customers have responded well to emerging technology. Moreover, we have been integrating automation and robotics to eliminate paperwork from banking processes and on the corporate banking side, developed trade finance payment facilities and other digital platforms to continue enhancing our offering.
A great example of this is our latest innovation, NBF CONNECT, a platform that has been co-created alongside the SME community. We have long recognised the indispensable value that SMEs bring to the country’s economic engine. With COVID-19 accelerating the digital world’s transition, we wanted to step in and be the first to help digitize this vital sector. As such, we joined forces with SMEs to build a platform that meets their business needs and helps them navigate their growth-journeys.
What security and data privacy risks are emerging as a result of a pandemic-driven customer data gold rush within the GCC financial service sector?
Proper data analysis will help us serve our customers better and ensure successful customer experiences. As one of our focuses is SME businesses, we have launched the NBF CONNECT platform to enable B2B transactions and other systems based on customer feedback. All this information is flowing through different channels, including customer feedback, and is analyzed in our CRM in terms of customers’ needs and requirements.
As mentioned correctly, the data gold rush is assisting in better customer service, and the emerging risk continues to be about data leakage and Identity theft, especially by using social engineering (Phishing emails, WhatsApp messages, fake/lucrative advertisement using social network channels) to penetrate people
and systems. We at NBF follow strict data protection mechanisms, as we ensure data observation is moral, ethical, legal and fair. In addition, we configure stringent access rules – need to know – and configure the data leakage systems to protect this information from potential incidents. Also, as part of our corporate social responsibility, we conduct various awareness sessions for our customers.
What does clean data mean? And how are regional banks synchronizing consumer data and their customer relationship management to meet their clients’ evolving demands amid the impact of COVID-19?
Acceptance of Data as an economic asset is well-recognised. It can be listed as one of the key agendas for discussion by boards and management committees of organisations globally. Data and contextual information generated from that have now become a basis for organisations to make more effective decisions, thereby benefiting from operational efficiencies and increased business value. However, it is also a fact that data which has not been managed effectively has resulted in organisations losing time, money and effort.
Clean data is a set of data ready for analysis after removing or modifying incorrect, incomplete, irrelevant, duplicated or improperly formatted data. The information that are removed or modified are usually unhelpful when it
comes to analyzing data, as it hinders the overall process and results in producing inaccurate results.
Data cleaning is not merely about erasing information to make space for
new data, but instead finding how to maximize a data set’s accuracy without necessarily removing information. Having clean data, i.e., ensuring that the data is fit for purpose, depends on the data management practices followed by an organisation that, to name a few, includes metadata and master data management, stewardship framework, data quality rules, etc.
It begins with managing the quality of the data through well-defined data governance policies & standards that are embedded in the organisation and robust technology & system architecture ensuring that the various stages of the data life cycle (capturing, cleaning, classifying, storing, using and disposal) are managed in the best possible manner. Leadership commitment towards these objectives goes a long way in ensuring that the data’s health and reliability are maintained at all times.
As a result of the COVID-19 pandemic, all industries are closely following how this will affect consumer and business behaviour and preferences in the short, medium and long-term. Many surveys are conducted to understand how COVID-19 pandemic reshaped customers’ behaviours. Below is the finding by The Banking Experience
DATA & DIGITAL INITIATIVES ACTION TAKEN BY BANKS
Digital transformation Developing digital customer acquisition platform
Blockchain-based KYC Platform designed to enable businesses new to the UAE to open accounts entirely digitally.
Leveraging customers demographic and transactional data Displaying personalised banners, including products and services customers may need in a crisis or otherwise
Leveraging customers demographic data Identifying the vulnerable ones (like self-employed, high-debt, old-age customers, etc.) and reaching out to them with customised products and helpful advice.
Service usage behaviour By leveraging branch locator pages, ATM listings in Google and more, to drive users who are potential branch visitors to online channels.
Interest clusters & AI Creating COVID-Sensitive Products & Services to the right beneficiaries. For example - Payment holidays, moratoriums for loans, relaxation in EMIs, less stringent KYC norms, waiving minimum balance charges.
survey conducted by Mintel-Comperemedia in the USA.
Key Findings:
1. 50% of consumers & 76% of businesses said the COVID-19 pandemic changed how they interact with their financial institution. 2. Of these respondents, 66% of consumers and 73% of businesses feel that these changes will be permanent. 3. Nearly half (42%) of consumers expect automated tools to support their financial wellness based on the insights that their bank has about them. Additionally, 52% of consumers are comfortable using a chatbot or virtual assistant to perform banking activities. 4. Nearly three-quarters (73%) of respondents said their bank should be recommending specific products/solutions based on the information they have about their business. 5. When business leaders were asked what solutions, they expect their bank to provide in the future, the three most popular choices from business leaders were: a. Virtual assistants to help manage company finances (60%), b. Secure mobile-optimized treasury management platforms (54%), c. Secure online treasury management platforms (52%). Here are some examples on how regional banks are synchronizing consumer data and their customer relationship management to meet their clients’ evolving demands
How do you envision consumer data mining in the next decade? And how can GCC banks leverage analytics to explore new avenues of growth or new business models?
Extracting meaningful information through the process of data mining is widely used to make critical business decisions. In the coming decade we can expect data mining to become as ubiquitous as some of the more prevalent technologies used today. Some of the key data mining trends for the future include: Multimedia Data Mining: It involves the extraction of data from different kinds of multimedia sources such as audio, text, hypertext, video, images, etc. and the data is converted into a numerical representation in various formats. This method can be used in clustering and classifications, performing similarity checks, and to identify associations.
Ubiquitous Data Mining: This method involves mining data from mobile devices to get information about individuals. This method has a lot of opportunities to be enormous in various industries, especially in Banking.
Distributed Data Mining: It involves mining a considerable amount of information stored in different company locations or at other organizations. Highly sophisticated algorithms are used to extract data from different locations and provide proper insights and reports based upon them.
Spatial and Geographic Data
Mining: Extracting information from environmental, astronomical, and geographical data also includes images taken from outer space.
Time Series and Sequence Data
Mining: This type of data mining is based on cyclical and seasonal trends and analyzing random events that occur outside the regular series of events.
The spurt of big data has opened enormous opportunities for the banking sector to grow. Looking at the tremendous impact of analytics and how it has completely transformed banking functions, it should be considered an essential part of every initiative. GCC banks can leverage analytics capabilities at scale to achieve a new level of customer understanding and targeting. Applying digitization at scale can deliver an almost seamless integration of banking services into clients’ daily routines.
Some key banking analytics to explore new avenues of growth
Better Personalization with Rich
Data: Clustering of customer base with advanced criteria, where human-centric, design thinking pillars and CRM tools help banks match customer needs to real-time solutions.
Digital-only Banking: With the high cost of a physical branch network and an increasing number of customers switching to digital channels, digital-only banking entities are growing rapidly.
More and more banking organizations are expected to move to digital-only banking in 2021 to protect their customer base and expand their market share, empowered through open banking APIs and cloud technologies.
AI-Driven Predictive Analytics: The banking industry can consolidate both internal and external customer data that is rich and financially viable, not only to know their customers but also build their predictive profiles. With the enhanced use of data, banks will provide consumers with value driven services through next best actions, instead of blind selling products as they will be able to minimize customers churn, fraud and money laundering.
Payments Infrastructure: Payments infrastructure will always remain the most active area of innovation in the banking industry. Driven by dynamic consumer expectations and technological changes, innovations in the payments industry will persist. The driving force behind the differentiation will be data and technology, changing the dynamics of payments.
Sources:
https://www.businesswire.com/news/home/20200729005507/en/Citizens-Survey-Finds-COVID-19-Permanently-Change-Consumers https://www.flatworldsolutions.com/data-management/articles/data-mining-future-trends.php https://cio.economictimes.indiatimes.com/news/business-analytics/banking-analytics-trends-to-look-in-2020/74560219 https://www.axios.com/ppp-small-business-loan-program-restart-81226b0b-3b79-4f10-85d2-a02b31733e81.html
Transforming the banking world
Amit Malhotra General Manager, Personal Banking Group, Commercial Bank of Dubai, tells us why Data analytics is a vital resource for improved management of information to grow better understanding of your customers. Use of data will continue to create increased opportunities for banks to profit from better levels of service
From personal banking services to wealth management, how is data analytics reshaping the GCC banking sector?
For banks and financial service providers to succeed in today’s complex business scenario, it is important and necessary to understand the needs and expectations of their customer base. Data is the key in understanding customers’ needs and expectations. This data can be further enriched by leveraging data analytics solutions, which can help organisations to understand customer behaviour better and deliver personalised and relevant offerings to meet their needs.
In addition, customer analytics enables the real-time delivery of personalized product or service offerings at the right time, which vastly enhances the customer experience.
Financial services providers need to understand the needs and expectations of their customer base. How are regional banks optimizing digitalization and customer feedback to maintain a competitive edge as well as transform their operations?
Improving customer experience and delivering personalized offering based on the needs of customers has proven to deliver excellent results to organizations. Results have shown that satisfied customers spend more, exhibit deeper loyalty to companies, and reduce costs for companies. In that dynamic of value creation and durable competitive advantage, delivering digital services and operations has emerged as a prime mover in reshaping customer experience in almost every sector.
As digital giants such as Amazon, Apple, and Uber continuously reinvent themselves by delivering simple, immediate, and individualized experiences, banks are also taking bold moves to build dynamic shared digital ecosystems around customer needs.
Digitalization and analytics are vital tools in accelerating the growth of an organization. Deeper and more detailed profiles of customers, together with transactional and trading analytics, can improve the acquisition and retention of clients, as well as cross- and upselling. Banks can also use advanced analytics to provide faster and more accurate responses to regulatory requests.
A good example of what CBD has executed is our suite of digital products including Digi Accounts, Digi Cards and Digi Loans, which enable customers to get new products (cards/loans) or top up on their existing products in real time, in under three minutes, leveraging data analytics.
What security and data privacy risks are emerging as a result of a pandemic-driven customer data gold rush within the GCC financial service sector?
Without a doubt, the COVID-19 global pandemic has been the main catalyst to digitalization not only internally, but by our
customers who have increased their usage of digital channels. Social distancing and remote working have forced us over the last year to revisit some of our traditional manual processes and move towards automation and cloud adaption but at CBD we had already started the digital transformation journey well before the crisis and this helped us to adapt much more quickly than other organisations. While introducing new products and services, embedding security and privacy controls has always been a priority for us. As security and data privacy risks continue to evolve, Financial Institutions need to be both proactive and preemptive in managing these risks with
stringent information security controls. The increased adoption of automation and straight through processing has also helped reduce human errors and operational risk.
Further, although law enforcement has made some progress with combating fraudsters, the largest security and privacy risk is still borne by the general public who remain vulnerable and gullible to prize scams and phishing attacks despite the frequent awareness campaigns.
consumer data and their customer relationship management to meet their clients’ evolving demands amid the impact of COVID-19?
The Covid-19pandemic has introduced many unique challenges that businesses have never faced before. Customer service teams are having to deal with multiple issues, ranging from customer engagement, satisfaction and support through this crisis. In this scenario, having clean customer data is even more imperative. Ensuring that your consumer data is updated, removing incorrect, corrupted, incorrectly formatted, duplicate, or incomplete data within your CRM and integrating all data through a centralised Customer Data Platform will
help all organisations provide better and more relevant communication and services to their customers.
Particularly in times of crisis, a customer’s interaction with a company can trigger an immediate and lingering effect on his or her sense of trust and loyalty. With job uncertainties and paycuts becoming more common especially in the West, a primary indicator of customer experience will be how banks meet customers changing needs with empathy, care and concern. Now is also the time for customer experience leaders to position themselves at the forefront of the longerterm shifts in consumer behaviour that result from this crisis. Keeping a real-time pulse on changing customer preferences and rapidly innovating to redesign journeys that matter to a different context will be key.
How do you envision consumer data mining in the next decade? And how can GCC banks leverage analytics to explore new avenues of growth or new business models?
It is difficult to make predictions especially about the future. But one fairly safe prediction is that data will continue transforming the world in the coming decade. The quantum and scale of data available to organisations will only increase going forward. Banks already have enormous amounts of consumer data, through ATM deposits/withdrawals, pointof-sale purchases, online payments, loans… et cetera, but they have not been very good at utilizing these rich data sets.
Analytics can help banks evolve new business models and provide more personalized offerings and even improve risk profiling of customers. As data analytics technologies advance, banks should look at using customer behaviour to tailor product recommendations or offer insights on customer’s money habits. Even interest rates and credit limits can be decided upon this data. For example, if a customer regularly makes payments on time, the bank can offer him better interest rates.
Banks may be able to provide more services to its customers beyond banking, and look at providing services across hospitality, retail, travel and ecommerce sectors amongst others. The bank can act as a data company at the center of a consumer ecosystem where the revenue streams include not just banking but also many other B2C and B2B businesses. Great analytics is not the only requirement here: banks must get many other things right to be relevant to and trusted by customers. And already several leading banks around the world are taking steps in this direction.
What does clean data mean? And how are regional banks synchronizing
Mamoun T. Alhomssey
ADIB CIO
From Descriptive to Predictive and Prescriptive
Banks must have real-time data for faster insights and quicker responses to stay competitive. Mamoun T. Alhomssey CIO, Abu Dhabi Islamic Bank, explains that as technology advances, so has accessibility to customer data, providing illuminating insights and improved decision making
From personal banking services to wealth management, how is data analytics reshaping the GCC banking sector?
With the uncertainty brought by Covid-19, understanding the evolving needs and expectations of customers is key for the success of any bank in today’s world. To adapt and effectively respond to these changes, banks must explore new avenues of growth to upgrade their services and provide better customer journeys across different channels. Through utilizing customer data analytics and AI technologies, banks are able to deliver personalized experiences and appropriate solutions at the right time, meeting customer needs. The insights gained from a human-led approach to customer data will help banks evolve and stay ahead of the competition.
Financial services providers need to understand the needs and expectations of their customer base. How are regional banks optimizing digitalization and customer feedback to maintain a competitive edge as well as transform their operations?
The pandemic has resulted in a fundamental shift in customer behavior marked by an increased preference for digitization and remote banking experiences. Digitization of banking services is a necessary advancement to help banks fuel new growth opportunities and adapt to evolving customer needs by offering safe, convenient, and efficient mobile and online banking experience. To maintain a competitive edge, banks need to reimagine the way they serve their customers by providing digital solutions that meet their needs, while still ensuring the delivery of a holistic and personalized banking experience.
What security and data privacy risks are emerging as a result of a pandemicdriven customer data gold rush within the GCC financial service sector?
The shift to digitization and the adoption of various digital platforms has heightened the threat of cyberattacks and security risks, encouraging fraudsters to be opportunistic. Online fraud in the UAE has risen considerably in recent months, even as misinformation abounds about coronavirus-linked health and financial issues. Cybersecurity has become more essential than ever, especially to banking customers who are always the number one target for fraudsters.
Customers are facing the risks of phishing, falling prey to a fake but ‘genuinelooking’ bank website, and eventually offering credentials to a hacker. In addition, the heightened use of open public WIFI and home networks that lack security has allowed for opportunities for misuse by fraudsters. During this time, it is essential for banks to ensure tighter security measures and controls are in place.
What does clean data mean? And how are regional banks synchronizing consumer data and their customer relationship management to meet their clients’ evolving demands amid the impact of COVID-19?
While customer data analytics is a critical tool for banks to leverage on, the way banks utilize and manage this data is key to ensuring that they are gaining meaningful insights on customer needs. Digital services and improved customer experiences do not operate in a vacuum, and banks must utilize the power of quality data to make intelligent decisions and fulfill customer needs. Banks need to stay competitive by having real-time access to data for faster insights and quickly respond to changing market conditions and customer needs.
To support a community of Data Scientists and self-service business intelligence (BI) users; Data needs to be catalogued, Golden records need to be created; this needs Data Governance to be in place hence Clean Data.
Clean data is structured data entailing valuable information which is clear of data errors and inconsistencies to ensure an enhanced quality of data. Clean data can help banks establish a personalized stream of targeted communications with customers by providing them with accurate, real-time understanding of their needs. Clean data also equips banks with the ability to respond to market challenges and opportunities in a resilient manner.
How do you envision consumer data mining in the next decade? And how can GCC banks leverage analytics to explore new avenues of growth or new business models?
With the growing technological advancements, customer data has become more accessible, providing banks with authentic business insights and vastly improved decision-making capabilities. In the next decade, as the digitization trend continues to evolve, it is crucial for banks to utilize consumer analytics and lead a data-driven strategy to maintain a competitive edge. With analytics, ADIB is moving from “Descriptive to Predictive and Prescriptive” analytics to yield the best outcomes. It is becoming much more comfortable to predict emerging customer trends, allowing for potential avenues of growth for banks. In addition, implementing relevant Artificial Intelligence solutions that leverage the power of Machine Learning and Big Data is crucial to allow banks to engage in smart investment decisions and product offerings that will ensure their success.
EXECUTIVE DIRECTOR AND PUBLISHER
Kenneth Mitchen ken.mitchen@mea-finance.com
COMMERCIAL DIRECTOR
Nap Estampador nap.estampador@mea-finance.com Tel : +971 50 100 5488
SALES DIRECTOR
Andrew Cover andrew.cover@mea-finance.com Tel: +971 50 931 3236
EVENTS AND MARKETING MANAGER
Cris Balatbat crissyb@mea-finance.com Tel: +971 58 594 4818
ADMIN AND FINANCE MANAGER
Marilyn Nainque marilyn@mea-finance.com Tel: +971 58 5025836
WEB ASSISTANT
Marie Orayan web@mea-finance.com FEATURE CONTRIBUTORS: Adrian Murdoch, Mushtak Parker, Walter Sebele
editorial@mea-finance.com
Dubai office: #404, Building B, Al Saaha Offices, Old Town Island Burj Khalifa District PO Box 487177, Dubai, UAE Email: info@mea-finance.com
