Doha Bank Group CEO Dr R Seetharaman has said innovations in digital banking have revolutionised bank-customer relationships with local GCC banks appear to be well-positioned to build on a solid banking trend.
“Banks must connect with their customers on a daily basis. To be successful in the market, banks must engage every day and to do this they must also promote and sell non-financial services. Social network enables banks to be in close touch base with customers. Digital banking has revolutionised bank-customer relationships,” he said.
Seetharaman made the statement during the 4th Annual Middle East Banking Innovation Summit held at the Jumeirah Emirates Towers on September 29 and 30 where he participated in the session “An Economists Perspective on the ME Banking Landscape and Impact of Innovation.”According to Seetharaman, digital banking will be a new channel to improve revenue growth and cross sell.
He said financial institutions will aim to improve customer experiences through better offerings through digital banking.
Seetharaman also gave his outlook on the GCC banking sector and noted that key sectors such as tourism and corporate services are performing strongly, particularly in Dubai.
In the real estate industry, Seetharaman said the strong rebound in real estate prices has improved the loan demand in the country.
The credit growth in the first five months of 2014 in the UAE was 4%, Seetharaman said, adding that the UAE banks will benefit from robust corporate activity and consumer consumption, and planned infrastructure projects should improve corporate lending. In Saudi Arabia, private sector lending has grown by 8.6% as of July 2014 while public sector lending dropped by 0.7% for the same period.
In Oman, lending growth was 8% till July 2014 while in Kuwait bank lending to the private sector grew 7.4% year-on-year for the same period. In Qatar, lending growth was close to 6% year-to-date as of August 2014.
“The costs of regulation and competitive pressures will lead to industry consolidation. Technology has transformed the way we bank and is one of the main drivers behind the accelerating pace of innovation in this sector,” Seetharaman said.
He added, “Online banking, mobile banking, chip, and pin have now become part of our way of life for everyday banking. New non-competitors have emerged in financial services industry.”
On cyber security and related risk management, Seetharaman said technology has increased many of the traditional information security risks associated with banking activities.
“With the significant change on how banks do business these days the rules have changed and the information security risks are greater than ever.
The risks have further compounded today due to privacy concerns, vulnerabilities, cyber terrorism, insider sabotage, mobile computing, wireless access, and spyware,” Seetharaman explained.
He added that regulations in Qatar have also changed to support managing Information Security Risks for financial institutions.
Many banks have established information security function as part of its key functions and formed Information Security Councils, supported by bank executives.
