(MENAFN- Arab Times) KUWAIT CITY April 28:Gulf Bank Chairman Omar Kutayba Alghanim delivered the first keynote address to over 500 Harvard alumni and regional business executives at the Harvard Business School Crossroads meeting which was held at the JW Marriot Marquis in Dubai on April 16 2015.
Other key note speakers included: His Excellency Sheikh Nahyan bin Mubarack Al Nayan UAE Minister of Culture Youth and Community Development; Osman Sultan CEO Du; Dr B R Shetty CEO of NMC Healthcare UAE Exchange and Neopharma; Yogesh Mehta CEO Petroleum Middle East Ltd; Badr Al Olama CEO Strata Manufacturing; and Timothy Butler Director of Career Development Programmes Harvard Business School. Speaking on the conference theme of 'disruptive innovation' in the context of the retail banking industry Alghanim said: 'Let's be absolutely clear most innovations in financial services are NOT disruptive. Interest-bearing checking accounts 24-hour call-centers ATMs and online banking are all relatively new offerings that have a huge benefit to customers. Today they are available through virtually every bank and are almost indistinguishable in form and function. These are the things that we spend most of our time on and where we compete with each other all the time behind a regulatory framework. They are things we have to do to remain competitive but they rarely result in any sustainable competitive advantage. Real disruptive innovation causes upheaval in the industry. Often it leaves certain banks out of the game entirely. Disruptive innovations shake things up they destabilize the status-quo hopefully by offering something completely new to customers .' Alghanim went on to outline a number of innovations he saw as having a potentially major impact on the future of the region's banking industry. One important innovation is the emergence in the industry of companies not traditionally involved in banking that are better able to deliver payment apps and meet customer demand. The availability of mobile technology has also led to the rapid development of new innovations in financial services such as the development of third-party agent networks which can offer a full range of retail banking products. Mobile technology also enables front-end payment systems without the need for a traditional banking infrastructure. Peer2Peer lending which connects retail borrowers directly to lenders is a further area of innovation. It builds on the tradition of lending circles which have been around for a long time in communities in East Asia India and the Middle East. A fourth area of innovation combines managing risk in micro lending with traditional supply chain financing. Alghanim cited the example of Alibaba which finances small businesses in China by linking borrowers directly to investors and integrating the SME supply chain and its financing without the need for involvement with traditional banking services. Putting this in the context of the Gulf region Alghanim said that Bain & Company a top international management consultancy believes that as much as 30 percent of traditional bank revenues in the region could be affected by innovations. This estimate was based on the profile of the Gulf population young with an appetite for new and innovative products and services and with a high penetration of technology. Also the Gulf is characterised by smaller markets where cost-of-entry is lower and customers are generally wealthier. To underline his point Alghanim referred to findings of recent research from Gulf Bank. The bank asked over 2700 individuals across the GCC questions about their attitudes to and use of mobile banking. This research found that 76 percent of respondents were already using online or mobile banking and around 50 percent were using their phone for payments. A third of respondents interacted with their bank via social media and a similar number use Paypal or similar payment products. For 'new and innovative products' customers said they would look to their current bank first. But if they were to switch out: 1) they would prefer an Apple or a Google over a bank for payments; 2) they would not care who it is they are borrowing money from; and 3) they would only slightly prefer a bank for their savings. Perhaps most telling of all Gulf Bank found that 57 percent of the respondents said that they expect innovations to come from the tech giants like Apple Google or Facebook not from the banks. In concluding Alghanim said: 'Bottom-line our customers are tech-savvy and already exploring new products. So we need to be aware that our customers are fertile ground for innovation from outsiders. We cannot should not merely rely on regulatory walls to protect our businesses. We need to figure out how to better serve our customers and to bring them new products that excite them. We need to make sure that when disruptive innovation opens new markets customers or value propositions outside of traditional banking we are prepared. And finally we need to work with regulators to make sure that disruption does not mean instability. There is no reason why the two should be the same. At Gulf Bank this is something we think about all the time. We are working hard to embrace innovation at all levels both conventional and disruptive and we're building a culture that seeks to keep us ahead of the game. We believe innovation is not only a critical part of our business but the key to future growth and success.'
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.