Time to Transform Banking in the Middle East

The Central Bank of Bahrain has announced its plans to launch the first phase of the national electronic wallet next month (Link). The eWallet will truly revolutionize the way banking is conducted in Bahrain to both the banks and customers.

Customers will be able to pay for their online and in-store purchases, and other institutions will be able to collect electronic payments via debit, credit, and prepaid cards all through the eWallet.

Such development got me thinking on the banking scene in Bahrain. It offers banks a wealth of opportunities to offer positive, simple, and rich customer experience.

It is no longer safe to say that saving and investment products, alone are enough to attract and retain customers.  According to EY’s 2014 Global Consumer Banking Survey (link), 41% of customers who opened a new account did so because of the customer experience.

Imagine passing by a grocery store to get a notification from your cellphone reminding you of buying milk? Or your bank’s mobile app advising you on how much money to put aside to reach a savings goal for that car you’ve been wanting to buy for so long? Not only that, but what if your bank could prepare you a report on where your spend your money the most (gas, restaurants, telecom. etc.) so you can better manage your budget?

A 2012 research from Peppers & Rogers Group and Efma, examining prevalence of customer centricity in Banking in Europe, the Middle East, and Africa concluded that embracing basic customer-centric activities, with further opportunities available to fully optimize the customer experience (link).

I think you can pretty much realize by now that banking is transforming; it doesn’t stop at digitizing customer centric services and enhancing the customer experience, but also extends to how branches operate.  Check out on how this company advocates the new role branches would play in the future of branch banking:

And do you know something? One bank is already implementing such innovative, customer centric solutions. It’s called Meem; a retail bank established by Gulf International Bank, which prides itself as being the first Shariah compliant digital bank in the world, and the first digital bank in the Middle east. Meem currently caters to customers in Saudi Arabia though.

However, enhancing customer experience, which is a common target for most companies’ nowadays, doesn’t simply involve improving a service. This is where companies fall short. The plan to enhance customer experience revolves around transformation. Just as there are external customers, there are also internal customers, who are the company’s own employees.

A company’s strategy, structure, people, management style, systems, and culture must all be accounted for when undergoing transformation projects. Strictly referring to digital transformation, nearly 80% of Customer Experience Management projects fail (link) because managers think that adopting software is transformation, internal capabilities and operations are not ready, and finally for not having a follow-up plan post implementation (link).

And it doesn’t stop there, to ensure the success of transformation projects, banks need to better understand their customers’ behavior and invest in Big Data analytics to establish a strong foundation for such projects. Banks must gather, analyze, and act on customer data to help identify the value, needs, and behaviors of segmented customer groups (link).

It is time for banks, specifically in the Middle East, to make an effort and evolve from simply being banks for savings and investments, to a role that revolves around understanding how its products and services play in their customer’s lives, and to making these products and services available in the right place, at the right time, and in the right way to their customers. To achieve successful customer outcomes in a very competitive market, Middle East banks ought to re-engineer their processes and simplify and digitize their products and services without neglecting transforming the the inside of the organization, and lobbying for proper legislation.

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