Banking in the GCC is fast changing due to improvements in technology, with greater focus on mobile banking, smart branches and social media banking.
Standard Chartered, for example, now provides customers with advanced digital banking services such as online video chat, online bill payment and money transfer, along with touch ID and other security features. With all banks in the region aligning themselves with the digital environment, “digital banking is the way to go,” says Shezad Hameed, Head of Retail Banking, UAE, at Standard Chartered. He goes on to say that “a banks digital capabilities are no longer the differentiating factor. In fact, most banks are running fast towards launching unique features such as Artificial Intelligence, Social payments, Wallets, and robots.” Digital is, according to him, all about making banking “simpler, faster, and better.”
A report jointly published by AT Kearney and European Financial Management Association (EFMA) states that UAE has solid infrastructural foundations for the move towards digital banking to improve customer service. High customer awareness, mobile penetration and innovations in technology have further powered this change.
But there is a long way GCC banks have to still go. According to Robert Abboud, Mena Financial Services Advisory Leader at EY, “The disconnect between customer expectations and what banks in the GCC can deliver is more distinct than ever.” Abboud’s statement is validated by an EY report which reveals that if they had access to digital banking: 71 per cent of GCC’s banking customers would increase payment usage; 57 per cent would increase credit card usage; and, 43 per cent would increase investment usage.
The same E&Y report also reveals how the region’s banking customers are aware of the benefits of digital banking with 73 per cent of conventional banking customers, 81 per cent of Islamic banking customers, and 82 per cent of hybrid banking customers saying they are ready to change banks for access to digital banking services.
The key benefits of digital banking from a customer’s perspective include:
Ease and Convenience: Online banking removes restrictions of time, place making it a 24×7 service.
Savings: Banks do not have to invest in physical branches which are proving to an expensive proposition. Technology allows banks to offer similar or superior service at lower costs. The money saved could potentially be transferred to customers as reduced or zero transaction fees.
Higher interest rates: When a bank saves money, as mentioned in the preceding point, it can easily offer its customers higher interest rates, and most banks do. Direct deposit saves time and effort of physically going to a branch and depositing pay-checks, with the money getting credited faster.
Automated Bill Paying: allows customers to automate the payment of regular monthly bills, removing the need to keep track of bills and payment schedules.
Real Time Account Information: allows customers to manage their money better and gain the most out of their accounts, interest rates, and banking services.
Money Transfers: Transfers between accounts with the same financial institution online can be done almost instantaneously, and even transferring to other banks and financial institutions is also very easy with digital banking.
These benefits are really the core of digital banking. Bankers today are making efforts to understand the disparate needs of every type of customer and trying to provide solutions, while making sure it is the bank that goes to the customer, and not the other way around. At the same time, bankers are also busy envisioning future situations and digital is the only way to make sure those situations are adapted to as soon as they develop.
(Source credit – Bloomberg)