GCC primed for digital banking: report
Dubai, November 24, 2013
The GCC has solid foundations for a move towards adopting digital banking as a way of improving customer service as the region develops, said a report.
Digital banking is an integral part of every bank’s agenda as a way to overcoming outdated approaches and mismanaged client relationships, said the AT Kearney and European Financial Management Association (Efma) report.
The region is well equipped to begin moving toward online banking, despite having less than 20 per cent online penetration and being low in digital banking readiness, it said.
The results will see customers benefiting from fair prices and increased transparency and comparability, and banks can meet their needs with immediate, high-quality interactions with quick, secure transactions, said the report.
The UAE can quickly adopt digital banking as per the report’s ‘Digital Banking Readiness Index’ analysis. Currently ranking 17th on the index, rated as not yet an attractice environment for digital banking, the report details many of the positive factors setting the scene for change.
The UAE has a young population with a median age of 30 years, more than 60 per cent smartphone penetration, high internet usage and access, socially networked customers, a strongly growing e-commerce segment, and a need for improved customer service.
These are strong factors enabling a country to quickly turn to a more digitally banked environment, said the report. The significant regional investment in CRM capabilities and value-added services has also created a solid base for future change.
Anshu Vats, partner at AT Kearney, said: “Countries like the UAE are moving towards ‘Mobile Government’, with government services reaching the people rather than the people reaching out for the government. The government of the future will function 24/7 and 365 days a year – this principal is absolutely relevant to the banking sector, as residents embrace connecting with government this way, they will be ready to do that in other parts of their lives such as their finance.”
Meanwhile, banks must clean up legacy processes, and dismantle old structures to enable a new digital-centric environment to flourish, said the report.
Currently, very few banks have fundamentally changed their internal organisationation or governance principles, and changes have largely been customer-facing.
The report states the changes needed include flexible procesesses, new revenue models with new products and services, and sweeping cultural changes, all in sync with the local environment. - TradeArabia News Service