Banks in Qatar need to consider digital transformation to ensure future growth, as the industry continues to feel the impact of advances in technology which are reshaping how organisations operate today, according to KPMG’s head (Digital Transformation) Farhan Syed.
In his keynote speech at KPMG in Qatar’s ‘Freshly brewed’ chief finance officer (CFO) seminar series’ at the Four Seasons in Doha recently, Syed said there were six forces driving digital transformation in the banking industry globally — mobile banking; using data and analytics for segmentation and marketing; using social platforms to encourage consumer dialogue; adopting cloud based systems to reduce cost and increase efficiency; automating processes and systems using robotics, and exploring digital currency and blockchain.
“While these forces may create some risk, they also create huge opportunities for financial institutions. The more digitally transformed a bank is, the more successful it is in creating value. Digitally transformed banks are more focused on customer needs and user interface experience, and are therefore better at appealing to the market. In addition to this, increased efficiencies as a result of adopting technology mean that digitally-focused banks can enhance their competitive advantage and boost profits.”
In Qatar, he said some banks were beginning to explore how digital technology could support their operations and sales; however, cultural preferences suggest that an element of human interaction would always be important.
Omar Mahmood, head (Financial Services) at KPMG Middle East and South Asia said, “It is clear that automating or digitalising all processes will not be appropriate for many markets, particularly in places like Qatar where traditional face-to-face interactions are favoured. However, smart use of digital forces where most appropriate can have a positive financial impact.”
A big trend reshaping the banking industry globally is data analytics. Traditional banks typically use consumer data to run mail-outs for marketing campaigns. Digitally advanced banks are increasingly using data to analyse, segment and target consumers based on their needs and interests, encouraging them to buy different or new products.
According to Syed, “Data should be treated like human capital; it’s a new resource that not only needs to be maintained, but also nurtured. Data analytics can help financial institutions significantly increase efficiency, reduce costs and drive profit.”
Robotic Process Automation (RPA) is also having a major impact on the banking industry. Specifically designed software can replace time-consuming manual processes, reduce human error and minimise labour costs.
On implementing RPA, Syed continued, “Businesses can use RPA to make changes to back-office functions at a relatively low cost, and payback on investment is often felt within a year or so. Estimates suggest that robotics could replace around 120mn roles globally by 2025, so it’s important for businesses to explore implementation but also consider reskilling their employees.”
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