Over the past year, GCC banks have committed to digitization in a way never seen before to counter the effects of a subdued global economy. That is the key finding of a study commissioned by Avaya (NYSE: AVYA), which is enabling regional banks to manage a challenging and dynamic operating environment as they face pressure to ramp up the quality of the digital services they offer.
The qualitative survey, conducted by research firm Davies Hickman Partners, and comprising in-depth interviews with 12 banking executives from across the GCC, found that many of the trends changing the face of regional banking have accelerated as a result of the COVID-19 pandemic. For instance, respondents claimed that an explosion in app use brought on by local stay-in-place orders has compressed five years of mobile banking growth into a single year.
The banking executives interviewed remain bullish, however – unanimous in their view that the uncertain banking outlook of the day provides an opportunity to reconfigure working practices, customer experiences and physical spaces. Many said that the new impetus for digitization could see GCC banks move faster than their peers in other regions – despite regulatory challenges or legacy processes.
“The GCC’s banking sector showed high flexibility over the past year as they moved quickly to digitize in response to the pandemic. However, amid this rush to pursue digital banking models, it is important not to forget the fundamentals stand-out customer service through customers’ preferred touchpoints,” said Nidal Abou-Ltaif, President, Avaya International.
“The findings of this study illustrate how regional banking leaders are pursuing parallel tracks – innovation and digital services, and the development of traditional banking and business services. Both motions need to eventually meet through a well-crafted transformation strategy that keeps the customer at the core of any new technology roll-out.”
The research identified six major trends where GCC banking modernization is progressing at speed:
Bank branches transformed through cashless commerce
Covid-19 has accelerated a migration from cash payments and this move is predicted to be permanent.
Contactless payment methods have seen huge growth, and paying with smartphone overtaken paying via debit card as the preferred option among consumers. This trend will have knock-on effects on how banks approach their retail branches: As an example, branches based around transactions, rather than customer relationships, are believed to be the easier target for closures.
Nine out of the 12 bankers interviewed see branches as cost centers. They predict a reduction in the branch footprint but a retention of high-specification sites. Others believe branches will still play an important role in customer relationships, driving fees and loans, but that the future branch formula needs a rethink.
“The bank branch is dead in its current guise; bricks and mortar are okay but not on a distributed footprint,” said one Chief Digital Officer in Saudi Arabia.
Avaya’s view: Don’t count out the branch; count instead on customer experience
From branch to experience: Banks should not leave the branch behind in the race to digital; they should instead pilot new technologies – such as Robotic Process Automation, Biometrics (Voice and Facial Recognition), Video, IoT – and evolve the branch to create an effortless experience. They should also be sure to keep basic in-branch actions (like opening an account) as seamless as possible.
Master best practices at the branch first. This includes new best practices for: Know-your-Customer (KYC), customer information gathering, and loyalty-building.
Turn tellers into sellers: GCC banks should equip branch employees with the right tools, capabilities, data and insights to make them more effective, and give them compelling new KPIs.
Despite explosion in use, banking apps need better functionality and omnichannel support
Most executives say their banks are pursuing an app-centric banking relationship with both the SME and consumer segments, and that they have seen substantial increases in mobile banking interactions as a result of Covid-19.
However, 10 out of the 12 executives highlighted the importance of providing customer support through contact centers, claiming that omnichannel strategies would help them meet users’ digital demands. The research found that most mobile banking users need customer support for queries, complicated questions or just reassurance, which is not always at hand.
As a result, some executives say they are trying to improve the range of functionality and customer support on their apps. Five of those surveyed confirmed that their experiments with chatbots had achieved varying levels of success, and that they need further development.
Avaya’s view: Build multi experience for the ‘Everything Customer’
Successful digital customer journeys, retail or not, are built with the principles of what makes a customer experience successful. The fundamentals of frictionless operation, simplicity, and hyper-personalization, should apply.
Simplify: Think about the fundamentals of customer experience. Track the customer journey. Decide on the best channels for the best actions.
Partner smart: Work with partners who keep you ahead of the fast-moving smartphone market. Keep evolving your customer-facing apps while never letting the fundamentals slip.
Stay ahead for the Everything Customer: Continuously add new capabilities such as text chats in video calls, enriching customer journeys based on knowledge management databases, resolving complex issues based on customer preferences, proactively messaging customers to improve experiences, and providing security in-app using predictive analytics.
Better customer insight will drive sales
The research shows that GCC banks are collecting more and more data as improving customer insight in a time of great change becomes a priority. Ten out of the 12 executives surveyed said that the analysis of customer feedback and its synchronization with CRM data delivers an effective CX template.
Although regulators in the industry are risk-averse, data rules enable the marketing of personalized products and proactive messaging to drive sales in the consumer segment, the research found, with all respondents looking to develop the ability to anticipate customer needs through more complete pictures of them.
Avaya’s view: Stronger data, stronger business
GCC banks’ analytics strategies in an incredibly fast-moving world should enable business agility and not cripple it. Analytics should be fast, responsive, adaptable and flexible to enable banks to make fast decisions. Here are 3 recommendations for a solid insights strategy:
Solve the problem at its root: GCC banks should make customer self-service effortless and embed virtual assistants to guide the customer journey, answer inquiries, and predict next-best actions.
Make it a win-win: Workforce engagement solutions should be employed to give teams the deep, real-time insights they need for a timely resolution, every single time.
Work with the experts: GCC banks should. work with providers who are well-versed in the use of customer data, and how to be compliant. Experience in GDPR compliance, and business agility to quickly propose solutions for fast-changing regulatory environments, should be essential.
Hybrid working popular now, popular in the future
Seven out of the 12 executives surveyed for the research confirmed that they are pursuing flexible working models, with employees working from the office part of the time. This shift happened as a result of Covid-19, but it’s likely that new attitudes towards work and the office will carry through to a post-pandemic world.
All the GCC banking executives interviewed acknowledged that, to realize these hybrid working ambitions, unified communications (UC) will be the key contributor to their success.
Avaya’s view: Cultural drivers, rather than cost drivers
As GCC banks move towards workstream collaboration, defined by Gartner as a market made up of “products that deliver a persistent conversational workspace for group collaboration and can be arranged into public or private channels”, it’s important to understand that remote work is unlikely to be a cost-saver.
Instead, workstream collaboration solutions can be used to realize and foster the cultural transformation that has come about as a result of increased remote working. As workforces adapt to the new, hybrid world of work, the intelligent use of workstream collaboration solutions can open up supply to vast new workforces who are happy to work from anywhere, as well as ensure a maintenance of business continuity in the event that office-based work is disrupted.
A cloud learning curve, enabled by banking regulators
Eight out of the 12 executives surveyed support cloud migration as a key enabler for agility, but some are wary of the security risks and required approvals from regulators across GCC countries.
Despite reservations, there is a consensus among GCC banks that cloud services can help deliver better customer and employee services. Many of those interviewed have made cloud a priority for the next 12 to 18 months. And if cloud is approved by regulators then local-based solutions are viewed as the best, with a preference for private or hybrid cloud.
Avaya’s view: Design your own journey to the cloud
Avaya sees the cloud not as a destination but as a set of tools that facilitates business agility while addressing the concerns of regulators. In the financial industry, it is clear that those with mature cloud strategies are able to reposition quickly, and scale up and down as needed.
Fintechs raising the bar
Nine out of the 12 executives surveyed value the benefits of cooperating with fintech (financial technology) providers, being attracted to their ability to deliver innovative services at low costs, with high agility and compelling ease of use. However, some view fintech companies as a threat, and would prefer to build their own solutions in-house – to stay on the right side of regulations, if nothing else.
Avaya’s view: More Power with ecosystem
With the goal of enabling banks to innovate at the edge and achieve speed to value, Avaya has and continues to build an ecosystem of alliances (fintechs and others). Some examples include:
AI capabilities in the customer experience journey through the Avaya alliance with Google Contact Center AI and Koopid for AI orchestration.
The Avaya alliance with Semafone for payment security and compliance across all customer touchpoints.