With digital transformation constantly and consistently changing the way banks operate, the need for speed has never been greater. If you’re not fast enough, by the time you've installed a new system you're already behind again.
Amid the cut-and-thrust of international banking, it’s hard to set a truly global benchmark for the world’s biggest banks. With the sheer diversity of local markets, it’s not always possible to compare apples with apples.
By one’s region’s standards - say, the well established Western Europe banking industry - the movements in a developing territory like Southeast Asia might seem small by comparison. But an educated observer would recognise the dynamism and potential present within Southeast Asia’s banking scene at the moment.
The digital banking revolution is all about keeping customers happy. In order to do that, banks need to “have compelling value propositions for the customer,” according to Siam Commercial Bank’s president Arak Sutivong. In order to present value in 2019 and beyond, disruption is required.
We often think of disruption as a sudden change, predominantly because of the rise of tech startups. Uber changed the way we take cabs, Airbnb revolutionised holidays, Netflix disrupted our viewing habits. In fintech, companies like Monzo in the UK or Alibaba in China have introduced digital-first products that have made waves in the industry almost overnight.
In the last few years, a wave of change has swept through the Middle East’s traditionally conservative banking sector.
Bumper oil revenues had kept the region’s economies afloat, and substantial public investment by governments brimful with cash had transformed nations like Saudi Arabia and the UAE into modern, wealthy economies. During the era of stable oil prices, the Middle Eastern banks were happy not to rock the boat. With this intransigence came a marked lack of disruption and change in the sector. The banks that were the largest two decades ago remain the main players today.
Banks and collections teams have a data problem. The issue isn’t the data itself or even a lack of data. Indeed, banks with thousands of customers are swimming in data.
Instead, the challenge is data governance and management. Large banks are complex entities with more than one core banking system. And it’s not only difficult to find the right information in the right system but also to sketch a holistic portrait of individual customers.
A cursory internet search will reveal a number of sobering stories relating to debt collections in the Middle East, but it’s important to understand that the region is still developing. Insolvency laws are still unclear, court practices are evolving and the payment terms are often incredibly generous.
What might be further delaying progress in the region is the cultural stigma that surrounds debtors.