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In the banking industry today, the question no longer is whether the industry will be transformed and disrupted, but how it will be transformed. Until recently, most people would have not imagined that people would be transferring money through their mobile phones, depositing cheques at smart ATMs, and completing shopping transactions without carrying plastic cards or cash.

The international digital security company, Gemalto, estimates that mobile banking users in the Middle East and Africa will exceed 80 million by 2017, and according to “The Digital Banking Adoption in MENA” report, conducted by OMD and ArabNet, in collaboration with OMD Device Research, discloses that 62% of overall bank account holders in the region are adopters of digital banking.

With customers expecting consistent service across all channels, banks across the region have felt the need to step up to the plate and streamline their processes when it comes to customer interaction.

We sat down with Tariq Al-Osaimi, Assistant General Manager Head of Innovation & Digitalization at the National Bank of Kuwait’s (NBK) Operations & IT Group to gain valuable insights on the digital banking sector, in particular to Kuwait.

How are advancements in technology affecting the banking industry, and in particular to Kuwait?

If I may quote Mr Pierre Nanterme, CEO of Accenture ‘Digital is the main reason just over half of the companies on the Fortune 500 have disappeared since the year 2000.” This is a major indicator of the impact digitalization and technology has played in all aspects of businesses. This transformation that was initiated in the 1990s with the birth of the Internet until today, had us all adapting.  

No industry can escape digital disruption—and banking is in the thick of it especially in Kuwait considering that mobile penetration is extremely high, and 70% of our population is made up of tech savvy youth. Customers want omnichannel banking options. Digitally savvy new entrants are shaking up the service proposition. Digital disintermediation has become the norm. And it is accelerating at a rapid pace. We at NBK have been reinventing ourselves to the new era of technology.

Our mobile channel is exceeding our online banking channels, which is not surprising in Kuwait. This has become our number one channel that our customers use.  NBK Management recognizes this and have set up the mobility strategy to better serve our customers.

What is being done to engage with millennials?

Millennials are digital natives. They have a special need for banking that older generations cannot even comprehend, or even relate to.  

Yes, they value time more than anyone else, any other generation. Time is really precious and essential for them. They don’t have time going to branches.  They have a tougher life than the previous generations.

However, this generation grew up knowing that if they are hungry they can simply order any cuisine they desire from an app, and have it delivered to them in 30 minutes, 24 hours a day. They expect the same from their bank.

They want a one-stop-shop bank providing them with all the services they have come to expect and they want it available 24 hours a day.  Conventional banking hours are unacceptable for them… and good luck if you don’t reply to their message within 10 minutes!

This is the biggest purpose for our innovations. This is why we started the Innovation and Digitization department.

What do you think is the most challenging innovative ideas to implement?

Personally, I feel that the challenge is that banking, in particular retail banking, still has a lot of catching up to do with many ongoing digital customer shifts. If you compare consumer technologies with banking technologies, banking seems rather obsolete, or more as a legacy, to be more accurate. Other industries provide customers with a high level of digital choice, freedom, and empowerment that the banking sector has not achieved yet. How can you achieve complete customer centricity and still deal with the entire bequest systems? This is the biggest challenge that is going to keep me up at night. It’s not an easy crack to code, and it still has not been fulfilled by anyone.

What are the top trends in banking that will shape the industry for consumers in the next 5 years?  

We are seeing a lot of influence from Fintech companies, these small startup companies that are slicing & dicing the banking industry. Rather than trying to fight them and having a standoff with them, here at NBK we are trying to adopt the Fintech phenomenon by trying to incorporate them and incubate them. We are embracing them taking them as partners instead of a threat for us. We’re currently in the process of evaluating Fintech companies in Kuwait and see how can we serve them better and collaborate.

Also, if we look at the history of banking, you’ll see that our banks have been branch centric. We started in 1950 as a branch, in the 1970s we introduced ATMs which are branch related, and in the 1980s we introduced call centers which also is related to branches, and later on online banking & mobile banking were introduced.  We recently had to click pause and consider if we continue being branch centric or shift towards customer centricity? We have decided to shift and reinvent ourselves as a customer centric bank.

How has digital banking changed the roles in the branch?

Branch banking is shifting from transactions to interactions. Customers have migrated to digital channels for routine transactions such as depositing, withdrawing, or transferring funds. 

Although customers want omnichannel services and we are in the process of shifting towards becoming a customer centric bank, it however does not mean that branches will die.  The focus of the retail bank is shifting and at NBK the role of the branch is headed towards more of an advisory role.  The practices and focus are being reinvented again.

By the end of the year, we will have implemented omnichannel experiences to some extent and we would have two prototypes up and running.  One prototype is our more customer centric branch that will look and feel completely different than our current branches and will be the first of our advisory branches. The second prototype is the introduction of the digital advisor with the support of data and analytics.

How are data and analytics being leveraged?

We are headed towards the virtual branch. It’s completely different; you can bank anywhere, anytime.  We are always connected to you.

This is where analytics comes into play. When do you need to be approached? Are you at a stage of a life when you need someone to guide you? For instance when you get your first job, when you get married, etc. This is where analytics and data are taking the forefront. The digital advisor will guide you through your life by advising you on how to manage your finances. An example would be when your purchase a car, 5 years later the digital advisor, by default, will help you decide whether to purchase a new car or not by analyzing the pros and cons of both options.

The way we envision ourselves is that we are your bank, we are NBK, and this is the most trusted bank. We are trying to be there for you every step of your life. Trust us that we will be taking care of you like the history of this bank has proven.

How realistic do you think it is to have a single digital channel for all your needs?

It’s possible. It’s very realistic. There currently aren’t the same technological limitations we used to have in the past. The technology is there, and our customers want it, therefore, we shall build it for them.  Omnichannel isn’t just a trendy buzzword, it is a serious solution that will deliver bottom line benefits. Banks need to raise their game to meet customer expectations, and be able to deliver seamless experience.

See related article:

Barriers to e-Commerce Adoption in the MENA region- ArabNet Digital Banking Report