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Hottest information about 2nd Annual Retail Banking Technologies MENA Summit

19 SEPTEMBER 2018

PHILIP KING

Global Head of Retail Banking
Abu Dhabi Islamic Bank

5 Questions For Philip King

Era of Artificial Intelligence and Machine learning: what has been implemented already and what is going to be over the next years in your bank? What are the benefits and disadvantages of Robotics usage in retail banking?

Digital banking represents a central pillar of ADIB’s growth strategy and, today, over 90% of ADIB’s cash transactions are conducted through our digital channels. We know that customers are constantly looking for digital banking services that offer a more intuitive user experience. In future, artificial intelligence will likely play a major contribution to this, although it is currently in a nascent stage.
While we recognise the significance of digital, we understand that we must not lose sight of the importance of direct and personal interaction with customers. Our research shows that many customers in the UAE still value the personal touch and would prefer to visit our branches. To cater to this, and in addition to our current traditional branch network, we have launched a new class of efficient branches called ADIB Express, with higher levels of automation, and relationship managers to give a highly-personalised service.
Therefore, while robots and AI may represent the future, customer experience will always come first at ADIB, and any technology will have to cater to this key priority.

Does the fast rise of FinTech represent a challenge or an opportunity for the banks? What is the right way of successful collaboration among banks and FinTechs?

While ADIB continues to embrace digital technology with a strong internal team committed to enhancing the range of channels, services and products we offer to customers, out approach has always been to embrace the latest financial technology, not fight it.
To that end, one of our biggest transformations yet has been partnering with Fidor Bank to launch the region’s first ‘community based digital bank’, smartbanking. The new online platform is designed to fit the lifestyle of millennial consumers, also known as Generation Y, as well as those looking for a digital offering that matches their banking needs.
Therefore, while banks are increasingly paying closer attention to what is happening in FinTech, both to learn from these innovative enterprises and to partner with them. The presence and growth of the FinTech sector has been an exciting wakeup call for many banks, although many do not yet have the scale and track record to fully compete with banks by themselves. The future is in partnership.

Is MENA banking industry ready for cloud computing?

Traditionally, banks have always kept their IT systems closely guarded under lock and key, due to the extremely sensitive nature of the personal and financial, and there has naturally been a wariness of using cloud computing. However, developments in cloud computing security have led to banks adopting this technology, which enables the scaling of service more rapidly and efficiently.
Cyber security remains a key priority for all banks, and considerable investment has gone into building robust defences. Each bank and financial service organisation will have varying needs and different business cases to address, thus will need to assess whether cloud computing is right for them. However, with the right approach there is no need to fear this technology and banks should certainly look to evaluate whether now is the right time to introduce it.

How might Blockchain technology be used to help turn the region into an international leader in Islamic finance?

While the full benefits of blockchain are still being investigated by Islamic banks, there is no doubt that the technology, which represents a decentralised and immutable blockchain network, has the ability to form a key part of any financial institution’s digital infrastructure in future. Blockchain could represent a more efficient and effective tool to speed up Sharia’a-compliant transactions, particularly those which are cross-border. Such solutions offer different Islamic structures and financing options for any underlying transaction with streamlined and standardised documentation, while also offering the ability to minimise risk. Most Islamic banks, previously not known for their technological agility, are successfully adopting transformational programmes and can become industry leaders in the digital era.

Are bitcoin and cryptocurrencies still a grey area in most of the MENA countries?

The extreme volatility of Bitcoin and other cryptocurrencies over the last year, and the lack of regulation around this new asset class, means that there continues to be a great deal of scepticism around its use. To date, the utility of cryptocurrencies over fiat money in everyday situations is still not clear and until its role in socioeconomic situations is better defined, it will then continue to only have a sideline role.

Philip King is the Global Head of Retail Banking at ADIB. He joined the bank in 2013 with over three decades of banking experience across Europe, the Americas and the Middle East.
Mr. King is currently directing a strategy to grow ADIB into a leading retail bank in terms of revenue, market share and its presence in the expat market. He has achieved growth in excess of past performance and above market rates through revenue acceleration initiatives, by driving nascent lines of business such as Wealth Management and Bancassurance and by launching marketing and branding campaigns to target the expat market.
Prior to joining ADIB, Mr. King managed various retail franchises for Citibank, including 5 years with Citi in Poland, which had over 86 branches, ABN Amro, which included Saudi Hollandi Bank in Saudi Arabia with 41 branches for 30 months, and ABN Amro Latin America for 3 years. Most recently he was responsible for the start-up and growth of retail banking for International Bank of Qatar based in Doha.
Philip is a graduate of Bristol University in England and has an MBA from London Business School.

14 AUGUST 2018

P S SURESH

Head of IT Architecture & Strategy
Bank Muscat

5 Questions For P S Suresh

Era of Artificial Intelligence and Machine learning: what has been implemented already and what is going to be over the next years in your bank? What are the benefits and disadvantages of Robotics usage in retail banking?

Benefits: Automation of manual processes thru 24 / 7 process execution, improved productivity, speeds-up processing times, error free, reusable process elements for iterative processing, reduces dependencies on human resources, faster & efficient/improved/reliable customer service

Disadvantages: Expensive to implement, limited expertise available in market for implementation, major shift in organization’s internal processes and work culture, creates redundancies of human work force

Does the fast rise of FinTech represent a challenge or an opportunity for the banks? What is the right way of successful collaboration among banks and FinTechs?

Whilst fast rise of FinTech create a challenge for the Banks, the Banks’ should convert that into an opportunity thru tie-ups/partnerships with FinTechs. FinTechs bring in an innovation mind set, agility, consumer-centricity and have an infrastructure & manpower to support digital initiatives. Banks should look at leveraging these to their benefit to deliver customer-centric products & services, as their legacy systems & processes would have been holding them back. The right way of successful collaboration can be achieved thru Senior Leadership involvement to eliminate obstacles, managing regulatory compliance, with efficient Governance & Controls being in place, Risk Management, and being agile to scale-up the innovation.

Is MENA banking industry ready for cloud computing?

The ability to “flex n pay” for only the resources that are consumed whether it is storage, memory or processor power is a significant benefit for banks, as all “On Premise infrastructure” invariably have very large quantities of redundant capacity both for operational and disaster recovery purposes.

For example, the ATM & POS network of a Bank should be capable of scaling-up to support peak seasonal volumes. In the Middle East, the peak seasonal volume is typically during late evenings of Ramadan month and just before Eid holidays – this is when, we have a huge number of people withdrawing cash and carrying out retail purchases – this increases the volume of ATM & POS transactions. A higher capacity of storage, memory or processor power is required to support this abnormal spike on the operational system and also in disaster recovery system (should a failover capability is required).

Customers will certainly remember banks’ that weren’t able to dispense cash or support merchant purchases during this peak seasonal period. For the rest of the year, much of this higher capacity with the Banks’ will remain idle with maintenance bills & licences still being charged.

While the cloud providers have sophisticated, complete and secure offerings, the Banks are not fully ready to utilize them, due to the regulatory restrictions. However, Banks have started using cloud computing for Staff Learning & Development, Recruitment etc. as these do not have customer confidential and sensitive transactional information.

How might Blockchain technology be used to help turn the region into an international leader in Islamic finance?

One of the key principles of Islamic banking is that it forbids the payment or collection of interest. Another principle is Islamic banks are only allowed to create debt when it is backed by goods or services. So, Transactions need to have “material finality,” which means that they must involve a “real underlying asset”. The need to abide by these principles increases the total transactional costs.

Using Blockchain technology, smart contracts are capable of essentially automating the whole contractual process including enforcing the terms of the contract. Thus, Blockchain offers an ideal solution for Islamic bankers because it reduces costs involved in transactions and its processing thru use of shared distributed IT infrastructure. By demonstrating the ability to comply with Sharia-based regulations, Blockchain has now earned a legitimacy for itself. Also, the reduction in transactional & contractual costs reduces barriers that might normally discourage investors.

As MENA regional Banks like Saudi Arabia’s Islamic Development Bank, UAE’s Emirates Islamic Bank and few other Bank’s adopt Blockchain technology, this move would help others to jump into the fray and thereby the region could possibly turn into a leader in Islamic finance.

Are bitcoin and cryptocurrencies still a grey area in most of the MENA countries?

Even though cryptocurrencies are not a relatively new concept, there is still a lot of uncertainty surrounding it. Regulation is a grey area as they do not rely on central banks, and many have pricing to remain highly volatile. Compounding to this, the fear about a “cryptocurrency bubble” puts off many entrepreneurs as it’s perceived to have a higher degree of risk.

In February 2018, Dubai Multi Commodities Centre (DMCC) became the first organization in the Middle East to be licensed to trade cryptocurrencies. This could be a great step forward for bitcoin & cryptocurrencies making a breakthrough in the MENA region.

P S Suresh holds a Masters in Business Administration from University of North Carolina Kenan Flagler Business School specializing in Innovation, Entrepreneurship & Strategy. He has over 32 years of experience in the field of Information Technology of which last 22 years has been in the Banking industry. His background includes vast and diverse experience in applying high-impact technology solutions to critical business objectives, yielding capabilities that transcend traditional IT operational boundaries. Suresh also has certifications in the areas of Project Management, Technology Architecture, Information Security, Technology Risk Management and IT Governance.

7 AUGUST 2018

LINDA ELTANY

Head of Internal Control
Attijariwafa Bank – Formerly Barclays Bank

5 Questions For Linda Eltany

Era of Artificial Intelligence and Machine learning: what has been implemented already and what is going to be over the next years in your bank? What are the benefits and disadvantages of Robotics usage in retail banking?

In an environment where there is pressure to digitize operations, artificial intelligence enables rapid implementation, delivering significant and sustainable value in short timeframes as it can be incorporated into organization’s legacy systems and manual processes.

Organizations of varying scale, size and structure can leverage RPA to streamline and automate specific manual processes.

Advantages:
· Reduction in manual error and faster service.
· Improved data quality and data collection techniques.
· Full adherence to rules and regulations while reducing fraud and gross misconduct concerns.
· Improved business results and reduce wage costs etc.

Disadvantages:
· A successful rollout of artificial intelligence requires huge effort, time and money regarding consideration of the full framework, development of a digitization strategy, governance approvals, development, testing and deployment, and implementing the right infrastructure.

Does the fast rise of FinTech represent a challenge or an opportunity for the banks? What is the right way of successful collaboration among banks and FinTechs?

A very successful collaboration. The creation of a scalable FinTechs operating model is a vital undertaking to balance strategy formalization, business enablement, technology integration, and communication and coordination.

Is MENA banking industry ready for cloud computing?

Yes, it is. While taking into consideration the central bank rules and regulations.

How might Blockchain technology be used to help turn the region into an international leader in Islamic finance?

This will require IT expertise to automate tasks. This may differ from traditional software by working at the user interface level, replicating the exact actions a human user would take.

Activities might include performing double data entry, copying and pasting data between computer systems, reconciling and cross-referencing data between different systems, and implementing high-level decision making at key points along the business process.

Are bitcoin and cryptocurrencies still a grey area in most of the MENA countries?

Yes, they are.

Linda Eltany, is the Head of Operational Risk in Barclays Bank Egypt. Linda joined Barclays Bank in 2010 after holding various positions in operational risk, internal audits and quality assurance management in different multinational organizations. Starting May 2018, Linda Eltany is a newly appointed Head of Internal Control in Attijariwafa Bank Egypt (Formerly Barclays Bank). Linda also has vast experience in finance, credit and audit fields throughout her wide spectrum of exposure in Ernst and Young Egypt, Carnival Cruise line USA and Citibank Egypt. Linda undertakes operational hindsight reviews that involve understanding / analysing the main pillar of bank’s processes and revenue generators to identify strength and weaknesses of controls and making appropriate recommendations to mitigate the incurred operational risks.

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