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Reimagining Banking During and After COVID-19

Shafique R Ibrahim, Group IT Head- Payment, Al Fardan Exchange L.L.C argues that while the technologies were always there, it is the adoption rate that has now picked up.

What are the 2 key challenges for banks during the COVID19 crisis and the lockdown scenarios?

BFSI industry plays a key role in any country. Not only in the country where they exist but also the countries that they work with. Now, COVID is something that was not expected or planned for.  In the current situation we are looking at serving the banking customers digitally and then serving those customers for FSI, who are a different segment. So we have a bank segment and we have one unbanked segment. The bank segments are served by the bank, the unbanked are served by the BFSI. Currently, especially in UAE, bank customers are served via branches or branch outlets.

Like somebody walk into the branch or somebody goes to them and that is how they operate.
Digital platforms are still new to them. Adoption is very low, though there is a lot of push. I am talking about cash in the economy and getting everyone on a digital platform. But that has slow adoption there.
With the current situation, there is a big disconnect between the customers who cannot walk into your branch now.  Some regulatory aspects as well are involved as to when you are serving the customers, it means on-boarding of the customer as well. There is a process to it, which means there is a physical verification of the customer. Now that in the current situation is not possible. So if you ask me the two challenges in terms of reaching out to the customers, this is the first one.

The second challenge that we talk about is, how do you solve this dichotomy? How do you serve them within the governance that you have already laid down earlier? With the regulation that you have in place suddenly now you want to break through that governance, that regulations and reach out to the customers who are waiting for the service to be provided. You now want to educate them on a digital platform so that they can start availing the services. It is a journey where we are pushed into which was not planned earlier.

We have a lot of strategies that we set for a couple of months and quarters. But everything is not shrinking and this is what the current challenges are like. How do you expedite these processes? We had a challenge of making sure that all the operations is done from back home so everyone can work from home, and they can start doing their duties at the same time. But at the same time, they have to serve the customers.
In a nutshell, the two key challenges  include serve the customers, abide by the governance that you have and then you enable the people to work from home, which we never expected them to do, especially in a financial institution where we have a very controlled environment, where the processes are very much under control, the end points are in control. But now certainly we are moving them from home, which means they are not part of your own secure zone.

How effectively are the newer technologies like AI, analytics, bots helping banks and NBFCs reach out to their customers?

Technology has been an enabler for the business since quite some time. It is nothing new. In fact, all that we speak about, like AI, Blockchain and RPAs are old technologies that were there, which was available. It was just a matter of adoption.
For BFSI and the banks, the focus was more on the distribution channels.  How do we serve the customers? How do we get the customers onboard? The focus was on that side of it. Suddenly when the work from home model came up, we realized that it is not just the front end channels we have to look at but the backend channels also. Backend process also has to be analyzed have to be optimized and automated. And that is where it is now. So if there is a big shift. Earlier it was POCs about how we can use RPAs but then there was no real implementation that was happening. BFSI did not found revenue in investing into the backend process, automation, than investing into the front end.

Now because of COVID and work from home, there is a lot of more adoption. I am personally speaking, a lot of process that we are now trying to automate using RPA. Today, we all are closely working with compliance department, Treasury Department to see where all they can automate the process end to end. There has been a lot of adoption like that and these are the things that we are discussing. It is not that we did not know about this. It is just a matter of when are we going to adopt this technology.

If you talk about compliance, for example, AI is the right solution, which was there and which was being used to automate. Now analyse the transition we are going through, then escalations can be handled by the other humans. But then most of the scenarios can be done by AI itself. AI and ML can do that like when we speak about Chatbots, the AI based Chatbots which are available. Now, there is a drive, the institutes are adopting those technologies. Why as the dependency on human is reduced just because they cannot be there right now. So this is where the shift is happening.

There is an opportunity for CIOs to really now take the lead and start implementing what we have in talking about and we have been preaching for so long. This is one thing and it is also an opportunity now to go back to the regulators and giving them a lot of real use cases. So earlier, it was more hypothetical, like what if something happens right now? What we are doing in UAE right now is, saying this is what has happened, and now
how do we do it? To be honest, there had been some quick decisions were made just to accommodate and this is going to stay and we will get used to it. And even when things get better, this will be the new norm that we will be following. It was a slow shift, a slow migration. But now it is a quick shift that everybody is adopting to and that is going to remain. About the CIOs, this is opportunity and it is the time for them to lead. I mean, we have preached enough and now it is time to lead. Get into the areas and kind of drive to show

With BFSI organizations now going for technology adoption how would you add them developing in 12 months time?

The business has realized the importance of technology, and the importance of having automated process. This has not happened earlier because work from home was a luxury. But with the adoption that is happening today, businesses have realized that the less you depend on the human, the better it is for the business in certain areas. And that is what is happening now and this realization was due to budgets and now because of the current situation.

The human has become a weak link not only in security, but also in the operational process. And that is where that technology is coming in. Now, look at this, because if you ae not working from the office, then there is somebody else doing that work like Chatbots, robotics and AI. So you have data and you have AI and bots, all three things together. Once you have three things together and they will do the best job, then the business will continue. Why? Because as of today, the business has invested in it and they want to leverage this investment for coming years, which also means today you see job cuts and workforce reductions. This will continue for a longer period of time, because now the business is looking at alternate options, alternate to humans.

At the front line it is like changing into the digital channel like the omni- channel,  social connect, mobile apps and all the possible interfaces that we can give to to the customers. The frontline is slowly moving away from the traditional and that is what we see today. But now we also see the back office is being moved away. Twelve months down the line, we can see that technology has taken over many of the places that we did not expect them to take over and that is precisely the major change.

So, yes, this is going to be a huge impact on the economy in terms of how the job cuts that you see. And that trend will continue for quite some time. The only thing that I would say is, we need to kind of unlearn and learn new skills as a people. If I am doing something, I need to take this opportunity now to learn new skills, because the skills that I have today will not work anymore. It is a big change when technology is taking over and as a human, we need to start adapting to new skills.

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