Consumer Banking Group at National Bank of Kuwait said that banks in Kuwait embarked on their digital transformation journey many years ago, beginning with the fundamental steppingstones of digitalization by successfully upgrading their IT infrastructure, acquiring vast experiences, and developing their human capital, as evidenced by their effectiveness and competitiveness in providing state-of-the-art digital banking services and products. As a result, the banking industry in Kuwait has established itself as a regional leader in this field.
According to Al-Othman, open banking services are a prime example of the natural progression of this digital transformation and an inevitable trend of FinTech’s fast development. Furthermore, Kuwaiti banks have differentiated themselves by staying ahead of the curve as they continue to offer cutting-edge digital services and products, as well as the latest payment solutions.
The MoneyTech Summit organised by Aljarida Summits, kicked off its first panel discussion on Monday, November 14th with a session titled: The Open and Digital Banking Opportunity. “We are ready for the future generation of FinTech owing to our huge capabilities, and in this regard, we have developed our Group Digital Office to capture and create value and cultivate innovation”. Al-Othman stated at the panel discussion.
Al-Othman underlined that the COVID-19 pandemic presented an opportunity in 2020 to accelerate the pace of providing digital services. Organizations with a solid IT infrastructure were able to accelerate the development process and improved their digital offerings to meet customers’ needs. They also successfully motivated industry laggards to accelerate their digital investment in order to catch up with the digital race.
The pandemic has also resulted in a significant increase in government initiatives to build digital services, as e-services have emerged as a way of life. As a result of this remarkable expansion, the banking sector and FinTech service providers have benefited immensely.
“This advancement would not have been possible without the Central Bank of Kuwait’s significant development and excellent efforts in building a regulatory and supervisory environment that supports the advancement of the digital transformation route. In 2018, the CBK launched the Regulatory Sandbox Framework, promoting the introduction of digital products, services, and business models and providing a safe space that allows for experimentation with innovative products, the most recent of which was giving the green light to test a first-of-its kind product for open banking in August 2022,” Al-Othman explained.
“We at NBK capitalized on this rapid development and captured the government’s digital evolution and various initiatives that started to roll out, most notably “Kuwait Mobile ID” which was instrumental to expand our digital offerings. A few days ago, we launched our authentication of the digital civil ID and digital signature to our customers, a key step in our strategy to increase reliance on digital channels for making transactions, without the need to visit the branch, including for instance: applying for a loan, credit card, or increase credit limit, etc.,” Al-Othman added.
Al-Othman explained that these developments had a noticeable impact on consumers’ behavior and motivated them to rely more heavily on digital channels, adding that a digital culture has emerged, and is continuing to spread across a broader range of customers, not only young people.
He highlighted that this evolution was reflected on how banking transactions are conducted for all financial industry players in Kuwait. NBK has increased its reliance on digital channels to cater for the huge surge of services and to continue improving our digital offerings, especially when it comes to NBK Mobile Banking, with our digital channels accounting for 98 percent of all banking transactions at the end of last year.
“Kuwait’s young demographic, with 64 percent of the Kuwaiti population under the age of 34, played a significant influence in this growth, as did the fact that our internet and mobile application usage rates are among the highest in the world. ” Al-Othman noted.
Al-Othman emphasized that NBK is constantly at the forefront of the digital transformation curve, as it continues to provide the market with the latest digital services. “We are well positioned and fully equipped with the necessary tools to improve our digital channels and deliver on our customers’ expectations.”. Al-Othman added.
“Having said that, the younger generation, particularly those in the 15-24 age group, have has specific needs. Despite our digital leap, we discovered that people demand dynamic financial products that represent their modern identity and swiftly adapt to their routines. As a result, we launched the first digital bank in Kuwait.” Al-Othman continued.
Al-Othman explained that “Weyay” is an innovative banking experience that was introduced a year ago and is experiencing rapid growth. It is largely built on direct engagement with young clients by recognizing and meeting their requirements in such a way that suits their personality and lifestyle, especially since the bank’s executives are themselves of similar age and understand their generations’ demands firsthand.
Al-Othman pointed out that Weyay Bank exceeded its customer acquisition goal by 300 percent.
The Future of Bank Branches
In response to a question on whether branches will continue to operate in the future, Al-Othman said: “Physical branches constitute a key element of the banking industry, and they are not going anywhere, but they will not look like they are today.”
“At NBK, we are keen to accelerate the implementation of a comprehensive vision to improve the traditional branch concept by integrating it with digital channels to jointly create an integrated and rich banking experience for our clients. This goal is realised through creating and offering services, utilising cutting-edge technological solutions, and assuring the speed and comfort of transaction completion.” Al-Othman responded.
Al-Othman further explained that certain banking services, such as advisory services and offering various investment products necessitate direct engagement with customers, and that branches must assume the significant responsibly of integrating their services with the rest of the digital channels.