Mideast retail banks must embrace innovation to stay relevant.



Sakhr Al Mulhelm, head of retail banking, Gulf International Bank; Praveen Bandekar, senior vice president, Union National Bank; Suresh Bajpal; Sanjoy Sen; Dinesh Sharma, head of consumer banking - Mena region, Citibank NA; David Power, group chief of retail and private banking oficer, Kuwait Finance House; and Asad Batla, head of consumer banking, Bank Nizwa, Oman; attending a panel discussion at the 10th Middle East Retail Banking Forum and Expo in Dubai on Monday. Photo: Dhes Handumon/Khaleej Times

Dubai: Middle East retail banks need to embrace future trends across technology, customers, competition and macro-economics.

This was echoed by industry specialists at the opening of the 10th Retail Banking Expo & Forum in Dubai on Monday.

Sanjoy Sen, managing director of retail banking, Asia-Pacific, at ANZ, examined the future trends of retail banking and what the Middle East retail banks can learn from Asia’s experience.

“Retail banks are facing disruption across four key dimensions: technology -- where digital is reinventing banking; consumer -- customers are redefining the rules of the game; competition -- every bank must learn to innovate; and macro-economics -- changes demand agility,” said Sen.

He added: “At some stage, there will be no cash, no cards, just mobile wallets — everything will be online. Finally, digital currencies like Bitcoin will dominate. At present, there are 50,000 transactions a month, resulting in billions of dollars of digital currency.”

“Consumers now have social media platforms where they can voice their concerns, complaints, recommendations and they have so many different banks and online banking platforms to choose from. As a result, they are more multi-banked and less loyal. On average, a person can carry up to six or seven credit cards.

“Banks will need to innovate to remain relevant. There are online platforms that do not need banking licences — new niche players such as UBANK, mobile wallets, crowd sourcing as well as peer-to-peer lending.”

Suresh Bajpal, head of retail banking at Doha Bank, focused on the effects that lower oil prices were having on the region’s retail banking sector and how to best shield existing retail portfolios, manage credit risk and downsize losses.

“Crude oil prices have fallen almost 50 per cent since September 2014, creating both winners and losers in the world economy. Consumers benefit from low cost fuel and more cash in hand, while GCC governments, which traditionally obtain 90 per cent of income from oil exports, now have less money to deposit with banks. Some may have to withdraw funds to cover budget deficits. So, we need to lend prudently, borrow wisely and use credit smartly,” he said.

Organised by Fleming Gulf Exhibitions, running alongside the forum is an exhibition showcasing the latest technological products and services. According to Alex Heuff, exhibition director, Fleming Gulf Exhibitions, many banks have inherited legacy platforms which are inefficient when trying to run mobile solutions.

“Complete upgrades clearly come at a cost, so the event is designed to identify and debate solutions and showcase the latest technology that can complement and or enhance current platforms,” he said.

Thirty international exhibitors are showcasing the latest banking solutions such as Misys, Temenos, Infosys Finacle, Backbase, Vasco Data Security, Loxon, Bearing Point, Adobe, Fico, Global Payment Services, Omega Financial Solutions and SunGard Retail Banking.

Technological innovation will be a major focus on day two of the conference with a round table discussion featuring a line-up of tech gurus, including Terry Kane, head of auto, finance, telco and travel — Mena region for Facebook, who will share expert insights on the latest developments covering everything from mobile payments, cashless transactions and contactless and prepaid payments to online product innovation.

abdulbasit@khaleejtimes.com