BANKING REDEFINED
On the path to the future Group Chairman & CEO, Mohammed Kateeb says inevitable change is afoot in the financial services industry; strategic foresight is key to navigate economic, political and financial uncertainties to achieve long-term goals.
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e have noticed several trends across the GCC banking sector. Which trends do you see shaping the future of the financial services industry for the seeable future? Digitisation has become the top priority for banks in the region, forcing many to rethink their processes, organizations, internal culture and the way they do business. This has decreased focus on branches and increased focus on eChannels. If we see the opening of new branches today, they are smart branches with fewer people and more machines. Additionally, we started to see a new breed of banks; “challenger” banks, who are either subsidiaries of existing banks or completely new digital banks. Of course, their model is completely different from traditional banks and we are yet to see how successful they will be in our region. One of the catalysts for this change is the fintech movement in the region, although it has not been as strong as other regions and has not lived up to its hype yet. This movement is likely to continue and may pick up steam if banks increase partnerships and investment in the startups, but also, we should realize that banks have been aggressively retooling to deny much space for these fintechs to operate.
Do you see these trends picking up pace for the next year or so? Over the last several months, COVID-19 acted as a catalyst for these trends to
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continue especially on the digitalization front. The usage of eChannels to conduct banking services such as Internet and mobile banking has increased manyfold. Digital banks and fintechs need to demonstrate that they can gain trust of customers. Trust is of the utmost importance here, as it will either facilitate the move from traditional financial institutions to these startups, or it will not. In addition, the speed of execution of traditional banks will also determine the need to move to these startups.
What is your organization doing differently to adapt to these trends? At Path Solutions we were early to realize the impact of Industry 4.0 as a technological and also a social revolution. We started investing in enabling technologies such as Mobility and Cloud as early as ten years ago, and since added technologies such as AI and Blockchain. Before, most of our focus was on how to add functionality to our platform and make the system richer. Since then, our focus changed to how we can utilize the technology to open our platform, hide complexity and introduce simplicity to the customer experience and build intelligence into our services by employing new technologies such as AI in analytics.
W h a t a re t h e s i g n i f i c a n t challenges confronting the banking sector across the GCC region currently? And how do you
Banking and Finance news in the MEA market
Mohammed Kateeb, Group Chairman & CEO, Path Solutions
expect these to pan out in the last quarter of the year? We have many challenges confronting the region in the short to medium-term; to name some, the geopolitical situation in the region, the US presidential election, the COVID-19 crisis and its impact on performance and budget constraints in GCC government spending, which has always been one of the main engines of growth for the financial sector. I believe the fourth quarter will be unpredictable with slight improvements from opening up some economies, but the second wave of COVID-19 continues to threaten recovery.
How do you envision the future of banking, and if I were to sit down with you again six months from now do you think you will give me the same answer? The answer to this question has been consistent for the last couple of years, although things are accelerating this year because of COVID-19, I believe a new financial ecosystem is being created that is open, fully digital and with few boundaries. Banks’ roles will change, each playing a different part in this ecosystem based on the institution’s core strength. We will move away from the one-stopshop concept for our financial services and utilize the whole global ecosystem that serves us best.
