Let's Talk Regionally: An Interview With the Gulf Bank of Kuwait

Rita Makhoul, May 22 2017

Following our article 'Banking on a Digital Future' in which we explored some of the technologies that will be transformative for the banking sector, we reached out to banks across the region to discover more about what to expect in the near future, in particular to our region.

For our first interview, we reached out to Laila Al-Qatami, Assistant General Manager for Corporate Communications at Gulf Bank of Kuwait.

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

Globally, the banking sector has, in many ways, embraced and encouraged the use of technology.  Through technology, customers have become more aware and knowledgeable of what they want and the banks are using technology to try to address these needs. In Kuwait, the impact of technology advancement has been quite positive, yet challenging.  Improved customer service and service efficiencies have been two of the key driving forces.  Innovations in Kuwait range from online banking services, which are continually evolving, a greater range of flexible financial products and greater understanding and focus on individual customer needs. However, the Kuwait banking sector is heavily regulated by and as such, it can be slower than other market to adopt and deploy new technologies. 

What are the top 3 trends in banking that will shape the industry for consumers in the next 5 years?

In the next five years, banks will be using customer data to deepen their personal connections with customers. Additionally, I think we will see a return of customer trust in banks over other financial services providers as customer service becomes more ingrained and effective and financial regulators become more demanding. 

Also, banks in the future will become much more than transaction processors. Banks will enhance their position as advice providers as well as wealth managers.

In your opinion, what are the top 2 challenges traditional banks face in their move to become a ‘digital bank’?

The main challenge relies in shifting to digital technology while keeping the customer experience relevant. Becoming digital is not just about providing products and services online.  It should also be about the ability to offer an online experience that can replicate and improve interaction with our customers.

Winning banks will effectively use “digital-friendly” technologies to enable their entire inventory of business processes so that products, services and advice may be made available to their customers in a seamless manner across both the physical and virtual world.  Products and services created will be mindful of this duality.  Finally, the digital bank will of course use digital to make itself more efficient through digitally taking care of its internal customers as well as it strives to take care of its other customers and embracing B2B in its interaction with external entities such as government, suppliers, etc.

Another challenge is responding to regulatory pressure while remaining customer orientated. Regulatory requirements continue to increase, and we must comply and build systems and processes to keep up with the escalating requirements.

Blockchain, artificial intelligence/machine learning, computing, big data, virtual reality, facial/voice recognition, cloud, and more are receiving a lot of attention because they could potentially open up a new paradigm in financial services. What tech will be transformative for the banking sector, and which do you believe are hyped or will have limited impact?

Blockchain, cognitive computing, cloud, augmented reality and sophisticated analytics are going to be some of the most important technologies that will shape the financial industry in the future.  Progressive banks will always manage to find new ways of using technology to help their customers and themselves, but it is early yet to know which technologies will fall by the wayside.  Banks store mountains of data that should be invested in producing relevant insights.

The downside of this, of course, is that while expanded use of digital technologies in finance represent opportunities, it also increases the threat of cybersecurity risks. Ultimately, we are being entrusted with other peoples’ money, so it is incumbent on the banking sector to embrace the new opportunities but proceed with caution.

How has the shift to digital banking changed the branch including staffing, services, customer interaction, etc.?

These days, before they even set foot in a branch, customers, especially the younger generation, are increasingly comfortable using the internet to seek advice, gather product and service information, and directly compare banks. Online banking and mobile banking also mean that generic customer services at branch level are not as needed as before. At branches, customers expect a more tailored and personalized experience, which is what we try to give them.  Consequently, this behavioral shift has greatly reduced the number of transactions conducted at brick-and-mortar banks, so banks are rethinking the size, locations, and numbers of their branches.

In the United States and Europe, the falling number of visitors in bank branches has led to the closing of more bank branches.  This is not only because of the efficiencies of technology, but also because of high real estate costs in cities and an increased propensity in entrepreneurs utilizing online banking opportunities. I feel sure this trend will be replicated locally too, and we can expect fewer branches or branches that are operating more efficiently through focusing on sales and advisory rather than transactions.

Not everyone has given up, or will give up the experience of visiting a brick-and-mortar bank branch, however, I am sure the focus on using technology for financing needs is apt to continue in the future.  The winning strategy is to “right-size” the branch network in harmony with the digital capabilities of the bank.  Customers may not use them very often, but branches somehow do impart “gravitas” to a financial institution a fact that may be able to partially explain the non-proliferation of “digital-only” banks.

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