Such an outlook calls for ‘blue-sky’ thinking with regards to the design and delivery of services around retail banking. IT life-cyle assurance firm, Maveric Systems, has examined the state of retail banking innovation and proposes some novel ideas with high potential for uptake and relevance for Banks in the Middle East.
Middle East economies face pressures from advanced technology and demographic trends push them in the direction of economic growth that is driven by domestic industry/consumption, rather than oil exports. In addition, governments, such as the UAE’s, are taking initiatives in this direction by investing heavily in educational institutions and infrastructure.
With these trends in operation, the retail banking segment in the Middle East is set to go through a decade of high growth with a rapidly increasing customer base and demand for varied products. The past five years have already seen double-digit growth in High Net Worth (HNW)/Ultra High Net Worth (UHNW) households and the number of HNW/UHNW households is expected to grow at 12 to 15 per cent yearly through 2015.
Additionally, retail-banking innovation in the Middle East market has the advantage of being able to start on top of a strong base with the availability of powerful technology, internet communications and advanced telecommunications tools/devices. The number of internet users in the Middle East, as of June 2012, is already 90 million (having grown by 24 per cent over the previous year). A total of 40.2 per cent of the total population of the Middle East currently has access to the internet.
The current retail-banking landscape in the Middle East is currently marked by the presence of innovations that are essentially incremental in nature and not radical. Most instances of such innovation have taken an existing product/service and only added specific design elements that have made them stand out in their respective market segment. Significant examples seen are those from Doha Bank and Mashreq Bank.
Doha Bank has been named the “Most Innovative Retail Bank in the Middle East” for 2013 by Global Banking and Finance Review. Some innovations which have differentiated Doha Bank from its competitors are the dedicated Click internet payment card and Dohasooq.com. The Click internet payment card is a low-limit, VISA prepaid card intended only for internet use which can be reloaded through online banking.
Dohasooq operated by Doha Bank is the Middle East’s first B2B/B2C e-retailing marketplace offering customers delivery within Qatar and integration capability with social-networking accounts. Dohasooq provides added assurance of speed and security to customers in a growing market through direct processing of cards during purchases by Doha Bank.
Mashreq Bank recently won the award for “Best Credit Card” and “Best Debit Card” in the Middle East at the Smart Card Awards Middle East 2013. The key feature of the Mashreq SmartSaver Credit Card is an Everyday saving card, which offers 6.25 per cent cash back on all transactions with no minimum limit and no conditions attached.
According to the World Wealth Report, the Middle East region has shown an 8.1 per cent increase (currently, 49 million) in the population of High Net-Worth Individuals (HNWI) between 2011 and 2012. There has been a projected 8.6 per cent increase in collective HNWI wealth from 2012 (estimated to be $1.8 trillion). Banks in the Middle East should introduce products/services to target this segment and also look to improve the user experience for such clients.
RFID is a revolutionary technology and offers an avenue to improve customer experience by reducing idle time. Yes Bank in India already offers an RFID-enabled experience in select branches where the density of HNWI customers is more. Given that Middle East customers place a premium on customer service and respect, they would be very open to any banking experience that would have a higher degree of personalisation and values their time.
Debit cards can be issued with embedded RFID chips holding key personal information about the customer. When the customer enters the bank premises, the RFID card reader installed at the bank entrance intimates the bank official about arrival and can be used to auto-populate the customer information at the terminal at the greet desk.
The key customer information is thus made pre-available to the bank employee at both the greet desk and the counter to which the customer is subsequently redirected. The quality of the customer experience can thus be improved and the service time reduced.
At this stage, the Middle East banking market presents a ripe target for ideas that can bring a radical improvement to the quality of customer experience and offer additional avenues for revenue growth.
This type of environment also allows the opportunity to rethink current banking processes and come up with radical ideas. Being able to start on a clean slate also offers the ability to tap lessons related to technology-driven banking innovation from the rest of the world.
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