Over the past year, GCC banks have committed to digitization in a way never seen before to counter the effects of a subdued global economy. That is the key finding of a study commissioned by Avaya, which is enabling regional banks to manage a challenging and dynamic operating environment as they face pressure to ramp up the quality of the digital services they offer.
The qualitative survey, conducted by research firm Davies Hickman Partners, and comprising in-depth interviews with 12 banking executives from across the GCC, found that many of the trends changing the face of regional banking have accelerated as a result of the COVID-19 pandemic. For instance, respondents claimed that an explosion in app use brought on by local stay-in-place orders has compressed five years of mobile banking growth into a single year.
The banking executives interviewed remain bullish, however - unanimous in their view that the uncertain banking outlook of the day provides an opportunity to reconfigure working practices, customer experiences and physical spaces. Many said that the new impetus for digitization could see GCC banks move faster than their peers in other regions – despite regulatory challenges or legacy processes.
“The GCC’s banking sector showed high flexibility over the past year as they moved quickly to digitize in response to the pandemic. However, amid this rush to pursue digital banking models, it is important not to forget the fundamentals stand-out customer service through customers’ preferred touchpoints,” said Nidal Abou-Ltaif, President, Avaya International.
“The findings of this study illustrate how regional banking leaders are pursuing parallel tracks – innovation and digital services, and the development of traditional banking and business services. Both motions need to eventually meet through a well-crafted transformation strategy that keeps the customer at the core of any new technology roll-out.”
Six Major Trends
The research identified six major trends where GCC banking modernization is progressing at speed:
1. Bank branches transformed through cashless commerce: Covid-19 has accelerated a migration from cash payments and this move is predicted to be permanent.
2. Despite explosion in use, banking apps need better functionality and omnichannel support: Most executives 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.
3. Better customer insight will drive sales: The research shows that GCC banks are collecting more and more data as improving customer insight in a time of great change becomes a priority.
4. Hybrid working popular now, popular in the future: Seven out of the 12 executives surveyed for the research confirmed that they are pursuing flexible working models, with employees working from the office part of the time.
5. A cloud learning curve, enabled by banking regulators: Eight out of the 12 executives surveyed support cloud migration as a key enabler for agility, but some are wary of the security risks and required approvals from regulators across GCC countries.
6. Fintechs raising the bar: Nine out of the 12 executives surveyed value the benefits of cooperating with fintech (financial technology) providers, being attracted to their ability to deliver innovative services at low costs, with high agility and compelling ease of use.