Banks in Gulf Cooperation Council (GCC) countries are leading in the Middle East region in terms of investments in digitalisation, according to an industry expert.
To keep up with the pace of technology and to cater to tech-savvy customers looking for a “more enriched digital customer experience,” GCC banks are investing in digital transformation, said Temenos regional marketing manager Middle East & Africa Nihal Abughattas.
“The GCC banks, in general, are investing in that transformation – in digitalisation. Perhaps the pace needs to pick up a little bit but in general the vision is definitely there.
“I see that the GCC is ahead of the herd in the Middle East region because the driving force is that the end consumer is willing to adopt new services. They are more tech-savvy, perhaps because of the structure and formation of society.
“There have a lot of expats in the GCC who were exposed to those kinds of services and technologies in other countries so, they are looking for the local banks to provide them with the same kind of experience,” Abughattas told Gulf Times.
However, she also noted that a bank’s digitalisation journey requires an overhaul of its traditional banking services to keep up with others that have already invested in innovation.
“Until today, customers are sometimes asked to step into the branch to provide papers and documents to get a loan granted, including lots of services that are not fully-digitalised as yet because it is not straight-through-processing. In order to become straight-through, you need structural architecture and IT support to reach to that extent,” she pointed out.
Asked if digitalisation is a threat or a challenge to banks, Abughattas said: “If banks don’t do anything, then these developments become a threat to their operations. If they’re idle, the fintechs (financial technology companies) will come in and they will provide better experience and customers will choose.
“Their customers are willing to go out of their comfort zone for convenience. It’s obvious because it happened with travel and with other industries where people will try something new as long as it is working.”
She stressed that it is “important” that banks should also consider collaborating with fintechs to keep up with the demands of customers and technological trends.
“As a fintech company, Temenos sees fintechs coming up and we don’t see banks as a threat. We are actually encouraging collaboration between banks and fintech companies. That’s the only way forward because banks will never be able to pick up with the pace of fintechs, and fintechs have that innovation machine going all the time that banks should capitalise on.
“The banks, on the other hand, have the customer base so, fintechs need the banks to reach that customer base so, their collaboration base is much bigger than the ‘threat mode’ that they are in. I see that the way forward is collaboration,” she said.