- Technology in banking driving customer satisfaction, operational efficiency and growth opportunities
- The banking industry must overcome challenges in integrating new technologies with existing system
Interview with Mr Khalid Tawab — Chairman, Tawab Group of Companies
PAGE: Tell me about yourself, please:
Khalid Tawab: I am Chairman of the Tawab Group of Companies, a renowned name in the manufacturing of paper, board, and steel. I have served as the Senior Vice President and Vice President of FPCCI (Federation of Pakistan Chambers of Commerce and Industry) and the Karachi Chamber. I have been the honorary Consul General of Mozambique since 1989.
In recognition of my outstanding public services, I was awarded the Sitara-e-Imtiaz by the President of Pakistan in 2009. My company has received the FPCCI Exports Award twice and the International Asia Award once for the highest exports. I am also a philanthropist and a trustee of the Aiwan-e-Tijarat-o-Sanat Hospital. I have had the privilege of serving as a Minister in the caretaker government. Presently, I am chairman of the Audit and Finance Committee of FPCCI – the most important committee of FPCCI.
PAGE: It is presumed that in the steeply evolving digital landscape technology has been pivotal for delivering gorgeous services to customers in the banking sector. Please elaborate on details.
Khalid Tawab: In the rapidly evolving digital landscape, technology plays a crucial role in enhancing customer services in the banking sector in several ways, which include:
Convenience: Technology enables banks to offer convenient services such as online banking, mobile banking apps, and digital wallets. Customers can access their accounts, transfer funds, pay bills, and even apply for loans or credit cards from the comfort of their homes or on the go.
24/7 Access: With digital banking services, customers have round-the-clock access to their accounts, allowing them to perform transactions and inquiries at any time of the day or night, regardless of branch operating hours.
Personalisation: Advanced analytics and artificial intelligence (AI) technologies allow banks to analyse customer data and behaviour to offer personalised recommendations, products, and services tailored to individual needs and preferences.
Enhanced Security: Technology has led to the development of advanced security measures such as biometric authentication, tokenization, and encryption to safeguard customers’ financial information and prevent fraud and identity theft.
Efficiency: Automation of routine banking processes through technologies such as robotic process automation (RPA) and chatbots improves operational efficiency, reduces processing times, and minimises errors, leading to faster and smoother customer service delivery.
Expanded Service Channels: Beyond traditional brick-and-mortar branches, banks now offer a variety of service channels, including online portals, mobile apps, chat support, and social media platforms, providing customers with multiple touch-points for assistance and interaction.
Innovative Products: Technology enables banks to introduce innovative products and services such as digital payments, robo-advisors for investment management, peer-to-peer lending platforms, and blockchain-based solutions, catering to changing customer needs and preferences. Overall, technology has revolutionised the banking sector, enabling banks to deliver seamless, efficient, and personalised services to customers, thereby enhancing their overall banking experience.
PAGE: To stay competitive, banks must leverage the power of innovative technologies to enhance customer experiences, optimise operations and drive growth. What is your standpoint on it?
Khalid Tawab: My standpoint on this statement is that it accurately reflects the reality of the banking industry in today’s digital age. Leveraging innovative technologies is not just advantageous but imperative for banks to remain competitive and relevant in the market. There are a numbers of benefits and upgrade services following technology in the banking, which include:
Enhancing Customer Experiences: Innovative technologies such as artificial intelligence, data analytics, and machine learning allow banks to gain deep insights into customer behaviour, preferences, and needs. By harnessing this data, banks can personalise their offerings, provide targeted recommendations, and deliver seamless and convenient experiences across various touch points, thereby enhancing overall customer satisfaction and loyalty.
Optimising Operations: Technology streamlines and automates various banking processes, reducing manual intervention, minimising errors, and increasing efficiency. Robotic process automation (RPA), for example, can handle repetitive tasks like data entry and transaction processing, freeing up human resources to focus on more strategic and value-added activities. Additionally, cloud computing enables banks to scale their operations, improve agility, and lower infrastructure costs.
Driving Growth: Innovative technologies open up new avenues for revenue generation and business expansion. For instance, digital banking platforms enable banks to reach untapped customer segments, offer innovative products and services, and enter new markets with minimal physical presence. Moreover, technologies like blockchain hold the potential to transform traditional banking processes such as cross-border payments, trade finance, and identity verification, unlocking new revenue streams and driving growth.
In summary, embracing innovative technologies is not just a strategic choice but a necessity for banks looking to thrive in today’s hyper-competitive landscape. By leveraging technology to enhance customer experiences, optimise operations, and drive growth, banks can stay ahead of the curve and secure their position as leaders in the industry.
PAGE: It is widely believed that banking IT spending is projected to reach $761 billion by 2025. How would you comment on it?
Khalid Tawab: The projected increase in banking IT spending to $761 billion by 2025 reflects the growing recognition within the banking industry of the critical role that technology plays in driving innovation, enhancing efficiency, and staying competitive in an increasingly digital world. Here are a few comments on this projection:
Investment in Digital Transformation: The surge in IT spending underscores banks’ commitment to digital transformation initiatives aimed at modernising their infrastructure, systems, and processes to meet evolving customer expectations and industry demands. This investment is crucial for banks to remain agile, resilient, and responsive to market dynamics.
Focus on Customer Experience: A significant portion of IT spending is likely to be allocated to initiatives focused on improving customer experience, such as enhancing digital channels, launching innovative products and services, and personalizing interactions through data-driven insights. Banks recognise that delivering seamless, convenient, and personalised experiences is key to retaining existing customers and attracting new ones.
Cyber-security and Risk Management: With the increasing adoption of digital technologies comes heightened cybersecurity risks and regulatory compliance requirements. Therefore, a portion of IT spending will be allocated to strengthening cyber-security defenses, implementing robust risk management frameworks, and ensuring regulatory compliance to safeguard customer data and maintain trust.
Adoption of Emerging Technologies: Banks are expected to allocate a significant portion of IT spending towards adopting emerging technologies such as artificial intelligence, machine learning, blockchain, and cloud computing. These technologies offer opportunities to streamline operations, automate processes, enhance decision-making, and drive innovation across various banking functions.
Competitive Landscape: In a highly competitive banking landscape, where fintech startups and tech giants are disrupting traditional banking models, banks must continually innovate and invest in technology to differentiate themselves, capture market share, and stay ahead of the competition. Therefore, IT spending serves as a strategic enabler for banks to maintain their competitive edge and sustain growth in the long term. Overall, the projected increase in banking IT spending reflects banks’ recognition of technology’s pivotal role in shaping the future of banking and their commitment to embracing digital transformation to meet the evolving needs of customers and the industry.
PAGE: Is it true that I integrating new technologies with existing system is one of the top challenges in implementing digital transformation initiatives?
Khalid Tawab: Yes, integrating new technologies with existing systems is indeed one of the top challenges in implementing digital transformation initiatives. Here are some reasons why this is the case:
Legacy Systems Compatibility: Many organisations, including banks, have legacy systems that were developed years ago and may not be designed to easily integrate with modern technologies. Integrating new technologies with these legacy systems can be complex and time-consuming, as it often requires customisations, data migrations, and compatibility testing to ensure seamless operation.
Interoperability Issues: New technologies may not always be compatible or interoperable with existing systems and infrastructure. Ensuring that different systems can communicate and work together effectively is essential for successful integration but can pose challenges, especially if they use different protocols, data formats, or architectures.
Data Silos: Organisations often have data stored in siloed systems or databases, making it difficult to access and share information across different parts of the organisation. Integrating new technologies may require breaking down these data silos and establishing mechanisms for data integration and synchronization, which can be complex and resource-intensive.
Security and Compliance Concerns: Integrating new technologies with existing systems can introduce security vulnerabilities and compliance risks, especially if proper security measures and regulatory requirements are not adequately addressed. Ensuring data privacy, protection, and regulatory compliance throughout the integration process is critical but can be challenging.
Resource Constraints: Implementing digital transformation initiatives often requires significant investments in terms of time, money, and resources. Organisations may face constraints in terms of budget, skilled personnel, and infrastructure needed to effectively integrate new technologies with existing systems, leading to delays or suboptimal outcomes. Despite these challenges, successful integration of new technologies with existing systems is essential for organisations to unlock the full potential of digital transformation, enhance operational efficiency, improve customer experiences, and stay competitive in today’s rapidly evolving business landscape. It requires careful planning, strategic investments, collaboration across departments, and a phased approach to implementation to mitigate risks and ensure successful outcomes.