The death of branch and traditional banking was a top theme at the Digital Banking Summit – Fintech Surge 2021. Held at Dubai World Trade Centre, the conference saw a number of panels featuring founders, executives, regulators and fintech experts, discussing the implications of the growing fintech landscape on banking.
Some speakers suggested that branch banking, while not likely to die, would be forced to evolve.
The industry was “at a tipping point… where the branch banking experience won’t disappear, but it will change,” Philip King, Global Head of Retail Banking at Abu Dhabi Islamic Bank(ADIB), said.
King noted that ADIB was seeing wide-scale digital adoption – ADIB has seen digitally active customers grow 30% in H1 this year, while 90% of its corporate transactions are completed digitally, according to a statement. The bank also recently launched a chatbot feature, as well as a digital youth banking solution.
And yet, customers were still visiting branches, King said.
In fact, he noted that 30-40% of transactions were done via branches, a bulk of these in the wealth management division.
King noted that branch roles were changing, now focused on higher value transactions as well as a hybrid model, with a mix of digital elements.
E-commerce has largely changed customer behaviour, he added, with customers now looking for solutions that are simpler, faster and more convenient. Branches need to respond to these new expectations, he said.
At the same time, others noted that banks had absorbed much of the new tech that’s been developed, and so the prediction that they would be made obsolete was flawed.
This was the perspective shared by Masood Khan, General Manager at Yap, at a different panel. Khan noted that the focus was now on collaboration between fintechs and banks, instead of just competition.
Customers want more than digitalisation from banks
At a separate panel during Fintech Surge 2021, panelists Imane Elmajdoubi and Petr Klimes echoed this thought.
Elmajdoubi is Director – Financial Services Industry – UAE, Microsoft, while Klimes is Global Head of Marketing and Digital Business, ADIB.
They noted that customers were looking for more than just a digitalised experience. Rather than a digital revolution, it is a revolution of customer expectations, Klimes said.
For banks to stay in business, the starting point is not just digital transformation, but how it is used to address customer needs, panelists also discussed. For instance, Klimes noted that often customers don’t have an issue with the use of their data by banks, but that the data was being used to upsell, rather than make banking smarter for them.
Meanwhile, Olivier Crespin, Co-Founder and CEO of Zand, said that for banks to use technologies such as AI/ML effectively, they need to get the basics right – knowing who their customers are – in order to give them products or services that make sense for their profiles.
Are regulators slowing fintech down?
Madiha Sattar, Senior Director for Strategy and Partnerships at Careem Pay, highlighted the need for regulators and fintechs to work together in order to remove any friction between innovation and regulation.
The differences were a result of the regulator’s aim of ensuring safety of all consumers and market players involved, Pooja Singh, CFA International Organisations Expert, Securities and Commodities Authority, said at a separate panel at Fintech Surge 2021.
Further, the regulatory response time does not run in line with the pace of innovation, with regulation being a more reactionary process, she said.
In this respect, developments such as sandboxes, accelerators and suptech solutions can help to bring some harmony between regulation and innovation, she said.
Featured image credit: edited from Unsplash