How digitalisation benefits the personal finances of customers

Banking in our region is transformed. With exceptionally high levels of smartphone penetration – 91 per cent in the GCC — consumers in our region have rapidly and enthusiastically adapted to the digital economy. This has created enormous opportunities for banks and other financial services providers, but they face growing competition from lean, agile, and innovative fintech start-ups.

To deliver the benefits of digitised financial services, banks need to transform how they engage with their customers and how they deliver their products and services. They also need to approach product development with blue sky thinking, to reimagine and reshape the future of finance. With research showing that nearly 77 per cent of consumers in Saudi Arabia and 61 percent in the UAE prefer to do their banking online, traditional banks have little choice but to adapt.

Mirroring the trend is Abu Dhabi Islamic Bank (ADIB), which saw an 11 per cent rise in digitally active customers in 2021. The bank now has more than 700,000 digitally enabled customers, which represents a record of 75 per cent of customers who are active on a daily or weekly basis. Currently, around 40 per cent of new ADIB customers open their accounts digitally through its facial recognition feature — the first bank in the UAE to launch the capability.

Personalisation is fundamental

The ease of being able to open a bank account using biometrics is fundamental to delivering what consumers need in the age of the digital economy: instant, safe, reliable onboarding and the immediate availability of financial products. The bank’s digital infrastructure also grants real-time access to the UAE Credit Bureau, making it possible to instantly understand the nature of the individual customer’s needs, personal circumstances and suitability for financing. And its statistics show the voracity of appetite amongst consumers for personalization and immediacy.

Around 30 per cent of the bank’s customers obtain instant and digital personal finance through its application. Meanwhile, digital remittances account for 98 per cent, while the process of updating customer profiles digitally is at 79 per cent. Cash withdrawals and check deposits have decreased within branches, and 98 per cent of withdrawals are conducted digitally, representing an increasing reliance on digital payment services.

Achieving such a sustained adoption of digital banking by so many customers requires a deep understanding of the digital economy and how it delivers on the needs of consumers. The integration of AI and advanced analytics makes it possible to introduce hyper-personalized services at every stage of the customer’s financial journey. In this respect, the bank becomes a lifelong partner, helping the customer to make the best financial decisions at every milestone.

AI-driven remote sales platforms allow customers to interact with their banks, accessing personal finance, credit cards, takaful and other banking products without leaving their homes. The use of analytics during the bank’s sales processes means that every customer can receive a highly personalized suite of products and financial solutions: a tailored approach that consumers expect throughout their interactions with the digital economy.

Inclusion and literacy

This deeply personal approach also allows banks to help customers make better financial decisions and reach out to communities and cohorts previously unreachable. For families, this can provide new opportunities to teach their children and themselves as young adults how to build a sound and independent financial future. When ADIB launched Amwali — the world’s first Islamic digital proposition targeting youth between the ages of eight to eighteen — it opened up a completely new and exciting way for young people to understand the basics of banking. The service brings together an entire suite of banking products and innovative technologies that introduce youth to digital finance with paperless, signatureless and branchless financial services.

When developing such innovative platforms in-house and through collaborations with external fintech developers, traditional banks gain the ability to create digital banking platforms, solutions and products that are inherently accessible, easy to use and inclusive in nature. Technologies like bots that clear cheques, integrated digital kiosks and smart automation of everyday banking tasks also deliver operational efficiencies to the bank. The result is an ecosystem that helps reduce waste, maximize human capital and spend more time innovating new solutions: an incredibly exciting digital revolution that delivers financial inclusion like never before and a win-win for consumers and financial institutions alike.

Sameh Awadallah is a acting global head of retail banking at Abu Dhabi Islamic Bank. Views expressed are his own and do not reflect the newspaper’s policy.