What key actions should the regions retail banks take to ensure they thrive in the near to medium term?
To thrive in the near to medium term requires agility. The landscape of the financial sector is changing dramatically. With technological disruption, the emergence of new entrants, both FinTechs and digital giants, as well as constantly evolving customer expectations, organizations are forced to continuously adapt to these changes.
Improving customer experience and delivering personalized offerings are no longer “nice to haves”. Results have shown that satisfied customers spend more, exhibit deeper loyalty to companies, and help organisations lower costs and increase profitability. In this dynamic of value creation and sustainable competitive advantage, delivering digital services and operations has emerged as a key enabler in reshaping customer experience in almost every sector. As digital giants such as Amazon, Netflix, Apple, and Uber continuously reinvent themselves by delivering simple, immediate, and individualized experiences, banks are also taking bold moves to build dynamic shared digital ecosystems around customer needs.
Data will continue to be a key differentiator for retail banks in the coming decade. Analytics can help banks find new business models and provide more personalized offerings and improve risk rating of customers. Banks have enormous amounts of data which they get through ATM deposits/withdrawals, point-of-sale purchases, online payments, loans etc. However, until they fully leverage these data sets, they will remain “data rich” but “insights poor”.
How will the co-existence of legacy retail banks and neo banks evolve in the coming years?
Legacy retail banks will need to evolve and cannot depend on their legacy and customer base alone. They need to adapt to the new digital world and offer relevant and customized solutions to retain and grow their customer base. Neo banks will have the advantage of speed and agility and a digital only approach for all their products and services. However, they will need to quickly figure a way to scale their business to reach optimal levels and more importantly make it a profitable business and not just a valuation play. I foresee a future where there will be an increased level of collaboration and partnership rather than competition between legacy banks and neo banks and FinTechs. This is an area where we, at CBD, have had some fantastic success. By partnering with FinTechs from across the globe we have been able to offer our customers world class offering in remittances, wealth management and robo advisory. In fact, in recognition of the benefits through FinTech partnering, we have established a Digital Lab in the heart of the Dubai International Financial Center Innovation Hub, the largest FinTech innovation ecosystem in the region.
Are new developments in retail customer onboarding nearing their limits or is there room for further innovation?
I definitely feel there is room for further innovation in this space.
CBD has been actively driving digital transformation and investing in state-of-the-art technology to provide customers with a seamless onboarding experience. Almost two years ago, we launched our “Digi Account”, which enables customers to open an account instantly, our ‘Digi Cards’ which provides customers a credit card instantly and our ‘Digi Loan’ product which allows customers to avail of a personal loan within minutes, all by simply using their Emirates ID. Last year we launched the region’s first Robo Advisory automated investment solution “CBD Investr”. The app has a fully digital on-boarding process, and we are currently extending this approach to mortgages as well where customers will be able to get pre-approvals on their mortgages within a few clicks using their Emirates ID only.
For our SME customers, we have launched our “CBD Rise” proposition which allows customers to open accounts digitally and within thirty minutes provides them with an IBAN number and the ability to make transactions instantly. We continue to innovate to back the ambitions of our Retail and SME customers.
In a time of more options and easier onboarding, how are you encouraging customer loyalty?
At CBD, we constantly work to provide our customers with value-added benefits and exclusive privileges to enrich their lifestyle and drive customer loyalty. We also recognize the varied needs of our customers and provide them with personalized and relevant offerings ranging from travel, dining, health and wellbeing offers to cashback and ‘buy one get one free’ offers.
Our credit card “CBD One” is one such example. “CBD One” is the first credit card in the UAE that empowers the customer and offers them the flexibility to choose the card benefits according to their own needs and desires, all enabled digitally. So, if you love watching movies, you can choose to get cashback on Netflix, Amazon Prime, Spotify, VOX cinemas, Roxy cinemas and Reel cinemas. If you love food and exploring new restaurants you can get cashback on Zomato, Deliveroo, Talabat, Starbucks, Costa and lots more.
We have also partnered with Etisalat to introduce the CBD Smiles Visa Credit Cards which offers Smiles points to customers on their purchases. Those points can then be redeemed seamlessly via the Smiles mobile app for a wide range of discounts, deals and experiences across categories such as shopping, entertainment, travel, dining, wellness and bill payments at over 300+ partners.
Our Super Saver Credit Card is also another example of rewarding our customers as it offers customers cashback across all Bills, Education, Supermarket and Transport related spends. Cardholders get up to 10% cashback in these four categories, a maximum of up to AED 150 per category per month. For other spend categories, customers will earn 1% cashback on every AED 2 spend.
Moreover, Super Saver cardholders enjoy a range of lifestyle benefits including complimentary lounge access at over 900 airports globally, free valet parking, discounts of up to 50% on cinema tickets and dining offers across 500+ outlets in the UAE.
During this period of ongoing digitisation how are you managing the generational differences between your customers?
Different generations typically exhibit differing needs and expectations. While the younger generation like the convenience, speed and accessibility that digital banking offers, the older generation might still prefer the human touch and the personal connection that we offer through our distributed branch network. The current pandemic has, however, reduced the generational difference with both younger and older audiences now more quickly adopting digital solutions.
In the future, I see an increasing proclivity to use both physical and digital channels, giving rise to a new set of expectations for interconnected experiences. It may become increasingly normal for consumers to engage in multichannel journeys, and banks will need to evolve to be able to provide these interconnected journeys across multiple touchpoints straddling the physical and digital worlds across devices and formats to meet customer needs.