Middle East: Retaining The Digital Native

How would you describe the development of digital transformation in the Middle East’s banking sector?

Habib Hanna (HH): Over the past 20 years, we’ve experienced massive shifts from the information age and the digital revolution. Businesses in every industry are being driven to change rapidly based on these new consumer behaviours. Companies must think beyond channels and understand the great necessity to enable a seamless, connected commerce experience.

 According to the Customer Loyalty in Retail Banking Report by Bain & Company, 54 per cent of the respondents trust a technology company with their money more than banks and 65 per cent of the surveyed are using a third-party payment solution for purchasing online and at the point of sale.

The survey shows that digitally active customers are more open to exploring alternative options for banking while insisting on quality, ease of use, time efficiency.

In the Middle East banking landscape, we are witnessing the same shift in consumer experiences. Consumers go on a lot of different types of digital journeys in a day—they might shop online, do some banking, move funds between accounts and do some light online browsing.

And while there are a lot of different contexts for digital journeys, consumers perceive their online travels as a single journey. What banks are starting to address is that whether one is shopping for physical products or financial services, the consumer wants an experience that is harmonised across channels and personalised to their needs.

Retail bankers have been long challenged to keep up due to strict regulations, compliance and the siloed growth of their organisations over time. As channels were established separately over the years, they frequently remain functionally, technically and organizationally independent. For banks to attract and retain these digital natives, digitalisation and integration of channels and transactions to deliver true omnichannel consumer experiences is the way forward.

Diebold Nixdorf works closely with banks in the Middle East in their digital transformation journeys. For example, Al Rajhi Bank is redefining consumer experiences by introducing a unique customised kiosk that enables consumers to print personalised debit cards, chequebooks, and bank statements.

RAKBANK is enabling Samsung Pay on ATMs in the UAE, and Emirates NBD is offering customers the ability to open an account and obtain a personalised debit card among other products and teller services on EasyHub, the first integrated digital kiosk.

What are your views on the direction of customer experience services in the financial sector? Gerrard Schmid

(GS): For a long time, the financial sector was a product-focused industry. However, over the past few years, we’ve seen it shift to be more of an experience-focused service provider.

Customers have increasingly more options to choose from—whether it’s traditional institutions, online-only challenger banks or new fintech providers.

Perhaps the leading customer demand is for a more seamless and personalised experience. Customers are looking for flexibility, convenience and wow-factor, and they’re looking for it across all the channels, whether it’s physical, online, mobile or in the branch. This is both a challenge and an opportunity for financial services companies.

Much of the industry is built on legacy infrastructure, and there are significant challenges associated with migrating over to cloud or API-based systems that better enable these new types of personalised experiences. We help our clients overcome these challenges by offering end-to-end solutions that combine software, services and devices to enable a differentiated consumer experience.

Innovation in banking is a word that has been over-exhausted within the industry. How would you define true innovation in a rapidly evolving technological landscape?

GS: I think there are two important characteristics of innovation. The first is iteration—its continuous improvement and refresh of an idea. The second is time—innovation is a quality that becomes apparent and is proven over time.

 The term innovation can be overused in our industry because it is often used to describe newcomers still caught in a hype cycle, and there are a lot of them. I think true innovation for banks and financial institutions is the ability to identity shifting customer needs, and then acting on that change through a willingness to experiment and disrupt their own historical ways of doing things.

Diebold Nixdorf is a 160-year-old fintech, and we believe we’ve been able to innovate on the foundations we’ve built by recognising where trends are heading, understanding how new technologies fit in and then crafting solutions that help our clients evolve their business.

With technology, security will always be a risk. In your opinion, what is the most effective way to protect an institution against cyberattacks?

GS: Security has really become an omnichannel topic. Attacks are becoming more complex, so it is important to defend against fraud in a strategic and multilayered way. Deploying both physical and digital defences at the same time is critical as these can be gateways to one another.

Proactive monitoring, regular software updates, periodic hardware refreshes and continuing education are a must for any financial institution striving to protect their customers’ assets and maintain their trust.

We proactively assist customers around the world via our Global Security Portal, which provides near real-time information on reported attacks or incidents impacting ATMs and other computer systems. Customers can view active security alerts, report an incident and view fact sheets as well as other important information regarding security incidents.

 Where do you see opportunities for the MENA market?

HH: We see various areas of focus emerging but the top two are: 1. Creating meaningful customer connections: stitching together the individual channels within their network to build an ecosystem that enables seamless, connected commerce. 2. Harnessing the power of data: Properly sourcing, parsing and activating on the data available to banks about their consumers and their networks.

Creating meaningful customer connections: We advise retail bankers to view their banking transformation projects through the strategic lens of experience-driven banking. It requires banks to revise their approach from top to bottom, and embrace a disruptive dynamic that combines a clear, focused strategic development plan with innovative collaborations.

We all recognise that consumers want to be free to choose the channel of their choice, to be engaged in more personalised ways, and to have their banking interactions smoothly integrated into their day-to-day activities.

The opportunity for retail bankers lies not in simply letting customers choose between channels, but rather by meaningfully converging and orchestrating physical and digital capabilities to provide a superior, end-to-end customer experience that enables connected commerce.

Another level of transformation is needed: To succeed in this new transformational shift, banks should consider the innovative best practises of organisations outside the traditional retail banking environment, such as fintech start-ups, retailers, technology providers, sharing economy partners and other innovators.

Branches can—and should—still be the cornerstone of a successful financial institution, but they must be seamlessly connected to and ingrained with every other channel, from the ATM to mobile to the back-end systems. As an industry, we’ve got to think beyond channels and the channel mix and drill down to the roadblocks that are stopping FIs from enabling an omnichannel experience, not only for customers but for the banks themselves.

Banks have already started using innovative approaches to connect with consumers and enable more interactions through multiple touchpoints. Voice assistant applications, biometrics, cardless transactions and iBeacon applications are appearing more frequently and becoming more readily accepted by consumers.

What is your outlook on the financial services sector?

GS: There is no doubt that the financial services sector landscape looks very different from what it used to be. There are a lot of new players, from newcomers within the industry, to nontraditional outside players.

This means greater competition, but it also means greater opportunity for companies to do something completely new and out-of-the-box.

To achieve a differentiated customer experience, we’re going to continue seeing different types of players partnering to create interesting, new customer journeys and value propositions.

For example, we’re working with Mastercard to develop more seamless payment options. As the industry expands its ecosystem of partners and widens its view of what is possible, new solutions, new operating models and new business drivers will flourish.