Banks and financial institutions (FIs) have been around for hundreds of years. They are large organizations that employ thousands of people globally. But they are now being seen mostly as large bulky bureaucratic organizations that need to be more agile, tech savvy and better in touch with the consumer pulse.
As technology is growing consumers are becoming aware of the options around them, which has led to the globalization and disruption of conventional forms of business. Banks and FIs may be old institutions, but in this day and age that no longer guarantees safety from disruption. To navigate this wave of change, they should not just embrace new technologies but set examples of agility and innovation.
On that note, here are some of the trends that will be reshaping financial services in the Middle East and some things that banks and FIs need to keep a watchful eye on.
Blockchain and Crypto Currency
With the evolution of technology, people are becoming more and more interconnected. Due to the growth in business and globalization, transactions have grown but sadly interoperability has not. There was a need for a digital transaction mechanism, something of a global currency that could move things along faster and transcend each territory’s transactional hurdles and limitations.
In comes Blockchain, a distributed database that maintains a tamper-proof record of Bitcoin-based transactions. Ripple is one of the pioneers when it comes to designing Blockchain-based solutions, to help settle cross-border payments in real time.
They recently facilitated the first end-to-end cross-border transaction for a collection of banks. This is seen as a huge success for the Blockchain community as more and more banks are moving from experimenting on Blockchain towards using platforms to pass real transactions.
Such cases set the direction for banks and financial institutions globally towards realizing the scope that digital currencies and their respective solutions hold. It shows a global drive towards adoption, as multiple countries are now making block chain part of their innovation initiatives.
The Middle East is no stranger to innovation. The Global Blockchain Council—launched by the Dubai Museum of the Future Foundation, in February 2016—is one such initiative. Mr. Saif Al Aleeli, CEO of the Dubai Future Foundation, recently spoke of plans in motion to implement Blockchain technology and if done right this could help the U.A.E. to speed up transactions and serviceability.
Beacon-based Proximity Marketing
Nowadays most of us carry smartphones, which are amazing machines with applications and computing prowess to make the most cumbersome tasks easier. But one drawback is that they are blind to the world around them.
That’s where beacons come in. These are small devices that you can stick to your wall, bike, merchandise, etc, to turn them into smart objects. The beacons when paired with a mobile-based application have the power to transmit signals and help blind devices like your phone see the world around them. Imagine walking by a store and discovering the latest deals/products on offer, or learning that the building you are admiring has three apartments available for rent that fit your monthly budget. Recently launched in the Middle East, Proximate is a region-first mobile marketing platform that lets brands broadcast consumer specific communications such as deals and promotions to people in their vicinity.
The Rise of the Consumer Experience
The Middle East is seeing a new breed of consumers enter the market, with a greater emphasis on tech and early adoption. Millennials are born in the age of the internet and have not known a world before it. They are quick to adopt technology and even quicker to dismiss anything mediocre. In the Middle East this new breed of consumers is giving rise to a movement that demands information in real time, serviceability and seamless user experience across all channels.
To cater to this new target market, banks and financial institutions are now moving towards consumer experience management (CXM) systems instead of traditional Consumer Relationship Management (CRM) solutions. This is because consumers don’t want to talk to disconnected organizations. They want to talk to people who know them and can give them a more personalized banking experience.
What consumers in the Middle East are looking for is an omni-channel experience: where ads and product offerings are based on analytics and proposed when and where customers desire them; where everything from a targeted personal loan campaign to updating your emirates ID can be done in a few clicks on your ATM screen or through the banks mobile application.
Banks realise that without catering to their consumer expectations, survival is not guaranteed. A global example of this is Barclay’s video banking initiative, which recently won silver at the UK Financial Services Experience awards for business change. With video banking customers can talk to their banking representative without visiting the branch to facilitate their basic banking needs.
This sort of innovation is a must now, as consumers become aware of technology around them they expect banks and financial institutions to drive their journey towards service excellence.
Bots and Virtual Assistance
Bots have been around for some time now. They are programs written to perform automated task. But now with the arrival of cloud computing, data sifting and analytics, bots are getting smarter pretty fast.
Imagine texting your bank and asking how much you spent on food over the past three months. A bot would do that for you, without the need for human intervention.
This is amazing, considering that almost 80% of all data is unstructured. Consumers globally are looking for the next killer application/innovation. What bots are doing is catering to a basic human need, of simplifying tasks around us. This ends up not just saving us time but making our lives less complicated.
When we think of examples such as Siri and Cortana, they are built into phones to perform automated tasks for you, as your personal digital assistants. Now with third party integration these bots want to get deeper access to your lives.
While safety is a concern for every user, having a digital financial assistant help you with your monthly spending patterns, investment options, money transfers, branch/ATM location is an undeniable advantage—one which users will openly embrace.
Technology is amazing; time and time again it redefines how we function. It shapes how we communicate and interact with the world and others around us. In the Middle East banks and financial institutions are gradually realizing the importance that technology can offer in strengthening their core operations, making them future-proof and consumer centric organizations.
We may see some of these trends hit our markets sooner rather than later, but whatever the case may be, consumers in the Middle East are in for a better financial experience in the near future.