Business Technology

Bank of Beirut: Navigating the future

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Salim G. Sfeir, Chairman and Chief Executive Officer of Bank of Beirut

editor's pickSunday 11, November 2018

Could you describe, in holistic terms, your vision for the bank’s digital transformation strategy?

Holistic is the perfect term to describe our digital transformation strategy. At the most basic level we all appreciate the value of more efficient business processes and transactions. Digital transformation is at risk of becoming a ‘one vision fits all’ proposition. Digital transformation should focus on the specific measurable values, unique to each institution. Banking anywhere, anytime, will become generic.

The key is to provide positive and effortless access to the most relevant options. A challenge is to balance real risk of uncertain opportunity, and make sure that digital transformation does not get in the way of or depersonalise our services. A true holistic digital strategy will genuinely nurture personal relationships with clients, customers, staff, regulators, suppliers and communities. Digital strategy is not a transformation substitute, but just one more important way to be effective. In the case of Bank of Beirut, it’s better described as “continuous evolution” as opposed to a 'transformation'.

How have you sought to compete with new disruptive fintech companies operating in the finance and banking industry?

 Over next three to five years the prime threat will not be fintech companies, but rather the incumbent banks which can better leverage fintech innovations in increasingly regulated environments. Optimising technology vendors, managing efficient technology transfer and developing the talent to excel are all more consequential than directly competing with mostly edge non-core fintech markets. Fintech collaborations can always be on the radar, when properly risk-managed. It’s all about digital ROI.

What role has Big Data played in the bank’s digital transformation journey?

Big Data has become an ambiguous term. In banking, Big Data emerged when datasets became too large and complex. As a result, Big Data management became the primary focus for major financial institutions or new entrants trying to build a customer base from scratch. Commoditised banking services and new entrants will remain under intense pressure, and better big data analytics can help separate those particular winners and losers. Digitally credit scoring the unbanked is different from negotiating Letters of Credit or buying your first home.

At a certain point, it becomes a zero-sum proposition for purely digital relationship banking. Bank of Beirut set out to deliver simple, direct, client-centric, differentiated products and services. Equally, our slogan: “Banking Beyond Borders” has resulted in a unique International footprint. Being present in ten countries, focusing on and understanding the genuinely unique needs of each local diaspora will be helped but not fundamentally transformed by Big Data. If and when Amazon or Facebook decide to deliver fintech-banking solutions, the largest data-dependent fintechs will be the most at risk. Niche bankers with deep client loyalties like Bank of Beirut face different challenges and data needs.

How have you addressed the challenge of reskilling staff to support new technologies?

When we started as a small outsider bank with five branches and less than 100 staff, we had to be agile and constantly deliver innovations in a risk managed environment. That set us up to grow a sustainable cultural competitive advantage. From there, we developed a success-training center, the Bank of Beirut Academy. Reskilling is a far deeper, direct challenge for the megabanks. Over the next five years, talent management will become even more important. National training and reskilling requirements will increase. This is one of Lebanon’s many challenges.

Developing the workforce of tomorrow, building great vocational training environments, creating jobs for our many underserved communities requires an urgent commitment from our national, municipal and educational leaders. The good news is that Lebanon’s educational institutions are strong, and we count on them to respond. For the record, we will welcome and support the best vocational training initiatives.

Beyond driving down costs and improving efficiencies, what are some of the other advantages from pursuing overall digitalisation?

Replacing back office, paper-based document systems was a priority long before today. Not only will our clients benefit from technological progress, our staff will enjoy increased job satisfaction, working with faster and more powerful support systems. With our new hybrid and digital branches, it will be easier to recruit and grow talent than for the traditional back office paper-based jobs of the past. It’s an exciting time to join the financial services industry.

What are some of the risks that have arisen due to the advent of the new digital economy and how has Bank of Beirut sought to mitigate them?

There is wide recognition of the potential, even existential risks from cryptocurrencies and cyberthreats. Both provide compelling incentives to work ever more closely with our regulators and the Association of Banks in Lebanon. On a more practical level, banks need to better address the risks of ‘digital distraction’, with virtually guaranteed budget overruns.

Do you see a role for artificial intelligence and blockchain in Bank of Beirut, and if so, how?

Today we see artificial intelligence as a very useful tool which is still quite narrow and reactive. The general consensus is that the real value of AI will come to fruition over the next decade. It’s the same for blockchain. You have to ask: how is this moment like solar energy at the beginning of the 21st century? Are the current start-up AI and blockchain solutions the ones which will prevail in five to 10 years? Probably not.

Can you talk a bit about PAYMENT GATEWAY, Bank of Beirut’s internet payment solution, and how it differentiates from other products in the marketplace?

Setting up an e-commerce solution or online store needs to be faster, more secure and genuinely intuitive. Bank of Beirut’s Payment Gateway provides clients with tokenisation, multiple checkout options, a high level of security and real-time management reporting tools. But this goes back to your earlier question about training and the value we place on staff being supported by technology rather than technology being supported by staff. Our big difference is there are real people to talk to and our client support ratios should be among the best in the industry.

How has the customer journey changed and what role has focusing on omnichannel solutions had?

Of course, we seek to identify and acquire new customers, particularly the next generation of customers, and the omni-channel solution plays an enormous role. Over time, every channel contributes to understanding your customer 360 profile. Each customer journey depends on the starting point. Our first duty is to retain and develop existing customers. A key focus of our omni-channel solution is to make certain that the most relevant content appears in the right channels. I have just returned from an extended trip to meet with our customers and staff in Australia. I learn and gain real insight, every time I meet personally with customers and staff. It’s still the best part of my job.

TAGS : Bank of Beirut , Payment Gateway

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