banking in the gcc by ey - arabnet riyadh 2015

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GCC Digital Banking Survey Arabnet 16 December 2015

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Page 1: Banking in the GCC by EY - ArabNet Riyadh 2015

GCC Digital Banking Survey

Arabnet16 December 2015

Page 2: Banking in the GCC by EY - ArabNet Riyadh 2015

Every Sector impacted but in different

ways

20Years to catch up with the cyber-security skills

shortage

Opportunities--------------------------------------------------------------------------------------

Digitised OperationsInnovation & InsightEmployee & Customer engagement

Speed & Scale

New business models

Threats----------------------------------------------------------------------------------

Cyber attacksMega-Vendors & Start-

upsTransparency of

everything

RegulationSpeed of change

Strategy Business model

Product InnovationMarketing Sales Service

Operations Supply Chain

RiskHR

FinancePartnersCompetitor

s Eco-System

52%Digital disruption has

demolished 52% of the Fortune 500 since 2000 (Constellation Research)

Globally, the Digital megatrend creates both opportunities and threats impacting organizations from top to bottom

Page 3: Banking in the GCC by EY - ArabNet Riyadh 2015

We have conducted a survey to gain a specific view of Digital disruption for banks in the region

► 2000+ customer surveyed in Saudi, Kuwait, Qatar and UAE

► 80 C-level leaders interviewed at 30 top GCC banks

► Fintech watchdog► Interview of regulators

ey.com/mena/digitalbanking

Page 4: Banking in the GCC by EY - ArabNet Riyadh 2015

In a recent research*, EY has evidenced a strong correlation between the customer’s digital experience and the bank’s revenue in the GCC

“Up to 50% of bank profit is at risk for the digital laggards in the GCC”

EY Research – GCC Digital Banking Report 2015

but only 14% of transactions are

processed on digital channels

98% bank customers are equipped with

modern smartphones

Social

Internet of Everything

SaaS

Three out of four GCC banking customers would be ready to switch bank for a better digital experience.

Omni channelAnalytics

Social

Cloud

Robotics

88% use their smartphones daily for

popular mobile applications

The vast majority of customers expect Digital to enable them to bank anywhere / anytime

64% rely on social media as a source of

information for their banking decisions.

and 80% customers consider the lack

of convenience of mobile banking is holding them back

* Src: GCC Digital Banking Report 2015 – EY Primary Research Publication

Page 5: Banking in the GCC by EY - ArabNet Riyadh 2015

An improved digital experience can also enable a comfortable growth for the digital leaders

For an improved digital experience…

of customers would increase payment usage.

of customers would increase credit facilities usage.

of customers would increase credit card usage.

of customers would increase savings usage.

of customers would increase investments usage.

71% 57% 57% 51% 43%

Page 6: Banking in the GCC by EY - ArabNet Riyadh 2015

22%InnovationsInnovation committees, innovation labs, regulator think tank and Fintech collaboration

95%Customer engagement

Online banking, mobile banking apps, social media

and wearable tech, as well as IVR, call centers, ATM and

CDM, and tellerless branches

62%Foundations

Systems and process automation techniques to

increase the level of straight-through processing (STP),

become paperless, improve the efficiency of back-office

operations and reduce processing costs

31%DifferentiationDigital assets such as data, products, rules or policies defined by banks to constitute a unique digital know-how

How do banks in the GCC define digital?2

Page 7: Banking in the GCC by EY - ArabNet Riyadh 2015

What are the expected benefits of digital?2

1st

2nd

3rd

Business growththrough customer satisfaction to improve retention and net promoter score (NPS)

Operation efficiencyto support growth through enriched straight-through processing (STP), process automation and the elimination of process errors

Scalabilityto build the business quickly, with exceptional quality and lower proportionate cost increase

Digital is not just about cost reduction anymore, GCC banks rely on digital to enable delivering their growth plan.

Page 8: Banking in the GCC by EY - ArabNet Riyadh 2015

What are the transformation challenges?2

Limited digital skills

Organizational silos and culture

Limited process automation

Limited technology support (legacy systems)

Regulatory environment

26%

21%

26%

32%

53%

5%

21%

26%

26%

32%

Larger banks Smaller banks

Page 9: Banking in the GCC by EY - ArabNet Riyadh 2015

How digital leaders look like?2

Are selectiveBy dropping projects that do not show a clear path to revenue in six months

Stay mainsteamBy being ruthless and only retaining features used by at least 20% of their customers

LearnBy celebrating failures as an integral part of the innovation process; success usually occurs at the second or third attempt

Foster innovationBy encouraging the creativity of top talents, with incentives linked to successful innovation

EngageBy co-creating products, functions and experience

Market

leading digital

organizations

Page 10: Banking in the GCC by EY - ArabNet Riyadh 2015

GCC banking industry leaders are asking EY their burning questions.2

1. How can we use innovation to gain competitive advantage?Are we doing enough?

2. How do I design an omni-channel service experience?What is the role of the branch in the digital age?

3. How should we transform to achieve leadership in the digital world?Are we ready for the future?

Page 11: Banking in the GCC by EY - ArabNet Riyadh 2015

Take five

The five principles of digital acceleration

You know your customers, but you’re not treating them as if you do.

The future of GCC retail banking is a smartphone experience that delights; think beyond a killer app.

Not every technology is right for the GCC; place your bets wisely.

Get better at executing.

Digital shift is a cultural shift; collaborate to win.

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