When creating a consistent online business and marketing strategy, the Gulf Cooperation Council (GCC) banking entities are experiencing a significant growth in market share and profitability. For over 10 years, KEC has teamed up with the main banking companies in the area to help them release their online banking potential.
The internet has transformed banking for good, bringing with it new and novel new ways of engaging with customers. All encompassing, multi-functional channels have altered the landscape, and developments mean that almost the entire spectrum of financial services is never more than a few clicks away.
Online banking usage evolution
Statistically speaking and based on our region experience, only a third of all GCC bank customers have signed up for online services, and only half of those are active online. When comparing it with developed markets with average 20% active online banking users, we realize it is still maturing, although with 77% mobile penetration rate in the area, mobile online banking is extremely promising and is delivering results to those banks pioneering the market in the region.
Online consumer behavior
The key topic for online banking in the area is the changing in online consumer behavior. Currently, demographics of over 40 years old are the most active in terms of usage and transaction generation, typically known as digital deniers. This profile tends to feel more comfortable with traditional face to face interactions and is considered as sceptic when relating to online banking. On the other hand, because of demographic dynamics, this group is being outnumbered by the so called Facebook generation, a native online demographic keen to any online services management. The banks should tackle this issue by keeping the digital deniers satisfied with their online banking expectations, such as fast consultation and secure transaction generation, whilst gathering the Facebook generation by providing a modern (specially mobile) and out of the box online banking experience.
Online banking business objectives
The area’s banking entities expect online banking to help them gain more sales, increase savings in fixed and variable costs, and improve customer service. In our experience, banks can effectively leverage online opportunities by taking action and steering its online banking strategy. Usually two objectives are fast adopted by all banking organizations, reduce costs from retail structure while improving its productivity and traditional customer acquisition improvement. Therefore, the banks should choose and make a conscious decision in what the want to achieve with the channel on the next five to ten years to come, whether is to reinforce its current structure and business model or reinvent its entire banking business while focusing it on a pure online model.
Written by Jaime San Martin