IBS Journal March 2016


ME banks & technology: the five new dimensions


The Middle East has always stood out as a confluence of cultures, and the services rendered by its banks epitomise the profile of its audience. While traditional banking is still in vogue for the conven- tional customer, CIOs continue to invest in technology driven innovations that are in line with international directions, and the new age customer. More than 50% of the population in the UAE for instance, is less than 30 years old, reflecting the typical profile of the customer demographic, and highlighting demands that need to be urgently addressed. Even while the larger economic impact


driven by the drop in the oil prices and the resultant implications that banks need to deal with are debated in every boardroom, there are many technology initiatives they continue to engage with; a few stand out as being more common, and in most situations demonstrate a paradigm shift. We explore five of these initiatives, seen to be critical and pervasive across most Middle East banks.


1. Digitalisation of


branches: The number of branches per person in the UAE is almost one third of that in the US. That being said, this is still much higher than many other developing markets, and with the increased consciousness to drive the customer experience through alterna- tive channels, there is a need to determine the right locations for the branches so as to justify their existence, and also differentiate themselves through innovation.


It is interesting to see the innovations


that are being brought about in the branch model. Moving away from the traditional branches and neighbourhood models that serve local communities, banks are seen to be be increasingly investing in self-service kiosks and customer service centres, which are highly digitalised, and offer an Apple Store-type environment. A case in point is the automated branches launched by Mashreq Bank. In addition to offering all cash transaction facilities, customers can pay utility bills, open an account, apply for a card or loan or cheque book, remit money and also speak with an


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RM for investments. The e-cube branches, the other model launched by this bank, targets the new age customer with a digital experience making it completely paperless, allowing customers to review products on large screens, view investment options on simulated screens and download application forms and products on their smartphones.


2. Mobility


Mobile transaction penetration levels in the Middle East are growing at 40-50%, reflect- ing the demographics of the age groups and income levels. Almost every bank seeking to be perceived as keeping pace with this trend will offer its retail customers typical services pertaining to enquiries on accounts, financial transactions and key services including account opening, customer services, location enquiries and product promotions. The more advanced ones are now seeking to promote cutting edge services – online transactions using mobile banking, contactless/NFC payments enabled through the mobile, personal finance management and remote deposit capture. A case in point is the new service launched by EmiratesNBD, one of the largest players in the Middle East, whereby its customers can scan cheques and have them deposited directly, without having to physically drop them at a branch or an ATM. Banks are also looking to build on the concept of virtual RMs; a live meeting experience with the Relationship Manager through a video call from a registered mobile, using interactive technology.


3. Channel convergence The advent of new digital channels, much


beyond what was envisaged when the core engines were invested in, has necessitated banks to increasingly look for channel integrations as a fulcrum to their technolo- gy architecture and offer unified customer experience across channels. The need is not only to provide for integrating a plethora of digital channels including corporate and retail internet banking, mobile banking, payment systems, e-trading platforms and digital banking, but also to take into account what would be the next gener- ation integration requirements to let the central core engine seamlessly connect with emerging customer touchpoints. It is natural, then, to see a high degree of in-


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