Why now is the right time for Lebanon’s banking industry to embrace digital transformation.
As digital transformation takes every industry by storm, Lebanese banks have to adapt and evolve in order to meet the needs of the digital-savvy customer. This evolution includes having a strong digital presence, and in order to truly succeed, banks have to adopt new strategies that embrace technological innovation while maintaining a high market share. The banking industry’s journey toward digitization includes three key steps: innovation, communication, and identifying new opportunities.
INNOVATION. Before the digital ‘revolution’, banks used to attract audiences by launching special products for their target audience. Now, however, the one-size-fits-all approach cannot be applied to the entire consumer base. Within this target audience, there are several segments, or micro audiences, that need to be targeted with different communication messages and strategies. In the digital era, it’s all about the “omni-channel experience, the digital banking innovation and the mobile payment evolution,” says Krystell Jaber, head of retail communication at Blom Bank.
The majority of banks in Lebanon are enhancing their digital services through mobile apps, which allow users transfer funds, order balance inquiries, and make card payments. But, the functionality and experience of these apps – and digital banking services – continues to remain in its nascent stages. “Advanced functionalities are still rarely available, whereby some of them are planned on the solution roadmap, such as Personal Financial Manager (PFM), and others are challenged by regulation limitations like customer onboarding where a wet ink signature is needed,” explains Gebran Gebran, head of customer experience at Bank Audi.
COMMUNICATION. As brands embark on this digital transformation, it’s also important for them to stay in touch with their consumers. And so, advertising has played a huge role in communications with the banking sector accounting for more than 11 percent of the ad spend in Lebanon during 2017, according to Jean Traboulsi, head of marketing and communications at Bank Audi. “In 2017, media-monitored figures for banks’ communication jumped from $170 million to $195 million,” he adds. As part of an overall increase in ad spend, digital’s share has increased but not significantly.
However, the growth of digital services offered by banks has accelerated with Bank Audi alone launching a host of offerings such as 500 advanced self-service machines (ITMs, ATMs and Novo), digital channels (online and mobile), phone banking, online chatbots, and the expansion of more than 190 branches into advanced analytics, integrated payments, remote advisory and servicing, Artificial Intelligence (AI) and smart servicing models.
With overall increasing budgets, communications targeted at younger generations have also increased. Seeing the potential of this demographic, banks have launched different account types to introduce young individuals into banking. And while it might be easier to lure younger audiences through special offerings, it isn’t as easy advertising to them.
Today’s youth is exposed to a vast variety of media channels and content and is becoming more opinionated. “Young people’s needs and aspirations are evolving permanently, which means that, strategically, we need to constantly innovate in order to provide them with new products and services, and smart solutions,” adds Traboulsi.
NEW OPPORTUNITIES. Online banking and mobile apps are the basics of banks’ digital transformation. The next step is AI, especially in customer support. For example, Bank Audi’s chatbot, Andi, is the first of its kind in the region. “It is fit to answer a wide number of questions and can support customers in calculating and submitting loan requests, locating branches and ATMs, assessing the waiting time at a given branch, and much more,” explains Gebran.
These technologies don’t necessarily need to come from the brand or the agency. Startups are adept at providing new technologies due to their innovative and agile nature, and have the potential to accelerate digital transformation in the banking industry – especially after the Central Bank of Lebanon’s initiative to allocate banking investments toward innovative startups. And some banks are already working with startups. “Bank Audi extends its support for innovation by participating technically in start-up acceleration programs, ideation events, sharing expertise/challenges, and sponsorships which encourage young talents and university students to innovate,” says Gebran.
THE FUTURE. There is no doubt that the future of Lebanon’s banking industry will be marked by digital and technological innovation. This is especially crucial considering that the largest potential customer base for banks is millennials, who are the next generation of banking customers making it crucial for banks to start building relations with them early on. Millennials are “more prone to accept change than older generations, which makes it easier to introduce new concepts and solutions that improve their experience and answer their concerns,” says Gebran.
During this transformation, it is important for banks to maintain a “human-centric approach”, as Gebran says. At the end of the day, no matter how many chatbots or apps are launched, consumers will still be humans.