Embracing a digital-first mindset in banking
Over the past few years, Ahli United Bank (AUB) has accelerated its digital transformation strategy – encompassing various initiatives from the back office to the front and across its operations and core banking businesses. It is a strategy designed to improve the operational efficiency of the bank and enhance the service it provides to its customers. In an interview, AUB CEO, Adel El-Labban, discusses the strategy, what differentiates it from other banks’, and the areas they are targeting for digital investment this year.
Q: Thinking back on 2021, what is the best single example of the success of the bank’s digital transformation strategy?
2021 was a good year. We saw a U-shaped business rebound and a world that has come to terms with the post-Covid ‘new ways of working’ – which for us naturally meant an opportunity to take the digital transformation programme into a higher gear. I could probably mention a couple of flagship digital products, one customer-facing and the other internal, that received a great response.
The first was our revamped B2B and corporate internet banking portal. As you might be aware, corporate banking is a key area of strength for AUB.Our market position and penetration is founded on offering our customers superior and differentiated product offerings. We thus spent much time understanding the newly emerging needs of corporate businesses in a post-Covid world.
We have envisioned a future for AUB where digital is a key enabler in helping us go much beyond being just a traditional financial transaction facilitator.
By developing a deep understanding of these needs, we could completely reimagine our business and corporate banking portals, which now have a highly automated, customer-centric and seamless product suite – offering superior solutions for loans, trade finance, payments, cash, and liquidity management for our clients.
We also keep in mind our customers’ unique needs when building these offerings – whether they are small and medium-sized businesses or large corporations and government bodies. We understand how needs such as working capital management, payment approval workflows, cross-border transactions and business analytics need to be satisfied by our products differently, for different customer segments in a more simplified manner.
Another digital success story for our internal customers was the launch of our Enterprise RM workbench. What was different about this was that we charted end-to-end journeys that salespeople undertake, where often, the first or last few steps are missed out in an enterprise automation implementation.
Our approach was ‘A-Z’ automation that focused on automating these critical steps to achieve full coverage. The new capability has thus become a true ‘one-stop-shop’ for all business needs of our bank’s relationship managers (RMs). It has not just made their day-to-day functioning easier, but it also helps them keep a close eye on their markets, performance and to identify more quickly possible growth opportunities.
Q: Can AUB demonstrate that its financial investment in digital transformation is delivering positive financial returns (profit/revenue growth, lower cost-income ratio etc.), and if so, how?
It is important to preface my response by saying that, in my view, AUB’s financial investment in digital transformation is not limited to a few digital initiatives alone. Our investments are significantly dispersed across every major activity-vertical that touches either our customers or our employees and how these activities can become not just digitalised but much more customer-centric and data-driven.
We are reimagining and rebuilding our bank across all dimensions and the programme is being driven with a do-or-die mindset: we shall either succeed in rebuilding ourselves into a sleek, omnipresent yet invisible financial partner for our customers or – we face the genuine risk of being outpaced by those who may evolve faster than us in the new digital reality.
So far, the good news for us is that our digital programme has delivered signed-off benefits that score significantly higher than the internal hurdle rate that we have set for transformation programmes in the past. We have moved the needle on the group’s key efficiency and profitability ratios, where we can attribute the impact created via the digital programme. We have also learnt from initiatives that have not delivered to expectations or have run into operational delays. The key takeaway has consistently been the need for focused owner-user engagement and accountability at all stages.
Further, we have engineered new financial measurement frameworks such as Return on Customer Experience (RoCX) that provide a more holistic view of outcomes that we are achieving for our customers, which also serves as a North Star on where our future initiatives should lie.
Q: Do you believe AUB’s digital product and business offering is a competitive advantage and differentiator?
Digital products, in fact, now serve as the tip of our spear as far as outpacing the competition is concerned. Like I mentioned before, our design reimagined and digitally re-equipped B2B, and our corporate online banking experience has helped us consolidate our lead in the corporate banking business.
Moreover, our focus is increasingly shifting on creating a similar dominance in retail as well, where again, we are using a digital-first mindset to launch product journeys that are best-in-class. We made a pilot case for this approach for our retail business in Egypt, where we could rapidly gain market share.
What separates us from the pack and what we have been able to do quite successfully is create a ‘digital road-mapping method’ for our programmes that heavily emphasise standardising improvements and outcomes across all our business entities across geographies.
So, a feature that is helping us gain a competitive advantage in one geography will be quickly rolled out in other geographies as well, and that winning feature will thus come to our consumers everywhere, within a short time. Our focus is not on a winning feature’s rapid time-to-market in a single geography, but instead on that feature’s fast time-to-market – across all businesses and all geographies.
Q: What specific areas of AUB’s banking business will be the main focus for digital investment in 2022, and why?
A lot of our focus thus far, apart from delivering strong business outcomes for our customers, employees and shareholders – was on creating modular digital building blocks. These digital lego blocks were created keeping in mind broad applicability to use-cases in technology, HR, data and consumer needs. For 2022, our focus shall be on rapidly deploying these pre-assembled modular digital blocks across a wider variety of business and corporate situations.
Q: If digital transformation is a journey, where is AUB on this journey? And ultimately, what does the bank look like, and how does it operate when it has succeeded in its digital transformation?
We are in the most challenging and yet exciting part, which is somewhere in the middle of the journey. We have been able to get the programme off the ground and create an impact that has been widely felt by our staff and our customers and has been acknowledged by our stakeholders.
The road ahead will consist of products and services that serve the evolving new needs and further reinforce their trust in us. We have envisioned a future for AUB where digital will enable us to go much beyond being just a financial transaction facilitator but help us realise what we want to be. In this place, a customer can discover new and creative solutions to their financial and non-financial needs that make the most sense and remain engaged for the long term.
We have several new exciting digital products and value-added services that will take us several steps forward in this journey in 2022. I see digital as an ongoing journey of discovery and constant re-invention. My core belief is that digital technology and data capabilities are the building blocks of the future.
To read other articles by Ahli United Bank in this series, see below:
Data critical in corporate banking transformation