GCC banking- Go digital or lose out.

GCC banking- Go digital or lose out.

The banking sector in the GCC has witnessed a remarkable transformation in the past few years. This is due to the region’s solid economic growth and development as well as the rising demand by its young and technology savvy population for a better digital banking experience.

Modern-day customers are informed, well educated, and better connected due to widespread Internet penetration and the easy availability of smart devices. They expect state-of-the-art digital services from their banks and financial partners.

As a quick indicator, consider that when Bain & Company’s 2015 global survey asked consumers which they’d miss more for a day, their mobile phone or their physical wallet, more than half chose their phones. Mobile clearly has advanced past the tipping point as roughly 70% of respondents under age 25 chose the phone.

Image Credit: Shutterstock

Image Credit: Shutterstock

Going digital

Digital cameras and e-readers have made traditional photography and books obsolete. The banking industry should learn from this perfect example. In order to meet customer demands, banks will need to undergo drastic changes and transform themselves from using conventional methods to more advanced ones to stay relevant.
Bain’s latest consumer research and statistical analysis shows that for the average bank, a high priority is to migrate routine activities out of the branch, where they are likely to annoy customers, into self-service digital channels, including mobile. That means improving the mobile experience to the extent that it truly delights customers, making the experience fast, intuitive, convenient, and capable of handling the most common transactions and service requests.
Sometimes, certain regulations protect traditional banks depending on the region. However, these will change as regulators or central banks address their customers’ changing needs. While they do so, the successful ones will be the institutions that are most effective in transforming themselves in order to meet customer demands for digital banking.
Banks also need to invest time and effort to mobilize their employees, making them part of the transformation from the beginning so they can help customers learn the new techniques and processes. It is also important for those who are designing the new banks to work closely with customers to learn about their requirements.

Time for critical change 

As noted, the GCC’s population is among the most digitally savvy in the world, with one of the highest rates of mobile phone penetration. Despite this, the situation in the region, and particularly in the Kingdom of Saudi Arabia, remains highly paradoxical, as banks have not been addressing customers’ needs.
However, this situation will not continue much longer and a real transformation in the region’s banking landscape is anticipated, where the next three to five years will be critical. Banks that respond to evolving customer needs and prepare to go digital will quickly move ahead of the competition.
The new business models and services developed by financial technology companies can help banks get ready for the shift. Banks will first need to determine what they want to become for each of their target client segments, and then identify the new business model that they want to test.
It is not easy to predict a single model for success. Trial and error is the name of the game in the digital world and banks, therefore, should continue to take risks and invest. This requires adopting an agile, or alternative and flexible, approach. Although banks are not accustomed to such a process, I strongly feel that there is no other alternative if they hope to adapt to the industry’s new reality.

Original source: Gulfnews.com

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