Wesam Abdulaziz Baqer, Head of Corporate and Institutional Banking, Bahrain Islamic Bank (BisB) speaks with Islamic Business & Finance about the institution’s push towards innovation
Tell us about the launch of BisB Corporate Digital. What does this mean for BisB?
We have been planning the design overhaul of the of e-banking portal along with the development of the mobile banking application since 2016, as part of our greater strategy to automate our operations and completely transform the traditional banking experience for our corporate customers into a digitised, hassle-free deed.
BisB Corporate Digital was launched in March 2018 with unique differentiated features, comprising a completely revamped e-Banking portal and a brand new mobile application developed with the latest state-of-the-art technology. We believe in a customer-centric strategy; therefore we developed the platform to fulfill the needs of our corporate clients; including a truly bilingual interface, seamless navigation and a centralised overview of their facilities, accounts, cards and investment; and an unparalleled level of customisation enabling our users to control the level of privacy of their account and dictate how the transactions themselves are conducted. Invariably, we prioritise the security of our customers and their data; the electronic portal is embedded with the latest security features and our mobile application is equipped with real-time notifications and fingerprint authentication.
The launch of BisB Corporate Digital will catalyse the migration of our customers online, taking basic transactions out of the branch allowing them to focus on more complex service. This will lead to an increase in efficiency and growth in revenue.
How else has Bahrain Islamic Bank progressed on its mission towards greater digital innovation?
With the rise of competition in the financial industry we have made enormous progress in the delivery of the IT infrastructure platforms to support the launch of our line of banking products and services to our retail and corporate customers further differentiating ourselves through various key strategies. One of the projects we are most excited about is the in-house BisB Innovation Lab, an inspired step towards empowering the bank’s digital team from being merely a support unit into a business enabler and creative space that leads to idea generation.
We were also the first Islamic Bank to successfully partner with Benefit to provide our corporate clients with smart solutions to accept payments through ‘BenefitPay”, the national e-wallet of Bahrain. This is a considerable milestone for Bahrain, joining other nations across the globe that continue to make remarkable progress in the race towards cashless economies. We continue to work in conjunction with the efforts led by the Bahrain Economic Development Board (EDB) and the Central Bank of Bahrain (CBB) in order to create a fintech innovation ecosystem that serves Bahrain and the region as a whole.
Tell us more about your work with the Bahrain FinTech Bay.
In response to the fintech revolution unfolding, traditional banks are realising the need for innovation, embracing the digitisation drive to rise above competition. As a result, the majority of banks across the world are either closing off branches or shifting the focus of internal financial operations towards increased digital transformation initiatives. BisB has emerged as an expert advisory voice to the country’s digital evolution, strategically working alongside the Bahrain Economic Development Board (EDB) to support the great strides taken by the Kingdom to solidify its position as a leading Islamic financial center and pursue its strategy to establish itself as a fintech hub in the Arab world.
This partnership supports the Bank’s commitment to help spur the growth of digital banking, and was heavily supported by both the Government of Bahrain and the Central Bank of Bahrain. After close collaboration, Bahrain FinTech Bay was successfully launched in February 2018, the Bank served as a founding partner in order to foster the growing Bahraini start-up ecosystem and further economic prosperity in line with the country’s 2030 Economic Vision.
What was the rationale behind the deal with PayPal?
The past few years witnessed a trend in traditional banks extending digital coverage beyond retail customers to other areas such as corporate and SME banking. As a result, the growing start-up culture has given rise to a flock of newly-formed SMEs, however a majority of these ventures fail within the first two years of their launch. Bearing in mind the challenges and problems that face start-ups in Bahrain, we wanted to further support businesses and help them mature to local success stories.
We realised that the majority of start-ups in Bahrain are either Instagram-based businesses or rely on Instagram and other online platforms to build their customer base; and customers are increasingly moving away from traditional cash payments. Consequently, we partnered with PayPal given their reputation as one of the world’s most trusted and innovative online payments platforms, in order to offer alternative means of payment for our customers and local businesses alike. Our integration with PayPal will allow existing businesses and startups in Bahrain to offer their customers ease of payment and increased exposure to e-commerce on a global scale.
Our PayPal services will be available for our corporate clients in Q2 of 2018, allowing them to open PayPal accounts through the Corporate Digital Banking facilities, and conversely withdraw from their PayPal accounts. This has been offered as a part of our strategy to transform the face of traditional banking in the region, we are constantly improving our level of services offered to our retail and corporate customers, seeking new innovative solutions to facilitate a smooth banking experience in today’s modern world.
What digital innovations are you most focused on developing further?
We are planning to launch our first Digital Branch this year wherein our customers will be invited to experience the new ground breaking digital banking system first hand. BisB’s Digital Branch in the diplomatic area will automate access for customers to execute their banking transactions online at the branch by themselves, completed with advanced video linkage to the Bank’s call center. As part of our digitisation strategy, we will be We plan to introduce new payment gateways solutions to simplify the lives of our corporate clients and explore blockchain technology to decrease the processing time of remittances; further advancing our portfolio of products and services in order to transform the banking industry as a whole.
Tell us about your women in leadership initiative.
Our people are our most valuable asset. We have incessantly prioritised the need to develop leaders in the industry by virtue of inspiring a transformation mind-set and harnessing a culture of innovation. We wanted to develop a programme that served as an extension of our existing corporate strategy and deep rooted ideology of supporting the development of professional women in the banking industry and the country as a whole. Invariably, the pace of executive roles requires impactful leadership and established professional expertise.
Our ‘Women in Leadership’ programme aims to fine-tune and align female professionals with need-based attributes required at different stages of development, establishing the fundamental building blocks required for success. The Bank continues to actively support women in leadership roles, our commitment to gender equality is reflected in the fact that women comprise 50 per cent of our Corporate & Intuitional Banking team. Taking into account the knowledge we have today on workplace dynamics and the importance of achieving a work-life balance, the programme features a series of workshops, mentoring sessions and networking events.
The programme offers a more complex understanding of issues related to professional women. Moreover, examining the opportunities, challenges, and organisational dynamics experienced by women within the organisation and across the world, we equip them with right set of tools enabling them to develop into the future leaders of tomorrow.
What other milestones has the bank achieved in the last year?
Our digital ecosystem achieved significant milestones in 2017 through the modernisation and automation programmes that were implemented across the consumer banking network, with the constant aim of offering customers an efficient and seamless banking experience. The Transaction Banking department was introduced last year within the Corporate & Institutional Banking team, with the objective of offering Cash Management, Liquidity Management and Trade Finance solutions to our corporate customers.
How has the bank performed in 2017 and so far in 2018?
Recently, the GCC witnessed more game-changing geopolitical activity than at any time in recent years; overshadowed by continued low oil prices, this lead to increased volatility and instability in the financial markets. As a result, we focused on strengthening the liquidity base whilst diversifying funding in order to meet the Bank’s obligations and maintain a healthy growth in our balance sheet in line with our overall strategy. In 2017, We executed our maiden Sukuk Repurchase transaction of $88 million and a bilateral transaction of $50 million; tapping into capital markets for our first ever syndicated facility whereby $101 million was raised from regional and international financial institutions.
Our Retail Banking division thrived in 2017, in both financial and operational aspects of the business. In a continually aggressive competitive retail banking market, net income after provisions improved by 14 per cent from the previous year; a positive growth was also effectuated in assets and customer deposits. As for Corporate & Institutional Banking, assets grew by 29 per cent, correspondingly deposits grew by 59 per cent; as a result of proficient drivers of growth. Up until the first quarter of 2018, we were still in the process of disposing our non-yielding assets and reducing our non-performing facilities.
Furthermore, we continued to apply a prudent and conservative approach in financing. We continue to perform as per our Board approved budget and CIB is mainly focusing on governments, quasigovernment, larger traders and SMEs.
How have you developed your services to serve the HNWI community?
In response to the growing demands of niche consumer segments, we recently relaunched our AlThuraya Privileged Banking Services, developing a brand-new line of unique features tailor made to High Net Worth Individuals (HNWIs) with an array of additional service benefits.
We offer our HNWI customers a superior banking experience granting them exclusive access to a range of premium banking products and services requisite with their lifestyle and advanced requirements. We strategically orchestrated the launch of our Visa Infinite Card to coincide with our re-established AlThuraya account in order to satisfy the specific needs and requirements of the HNWI community.
The new Visa Infinite Card ushers in a substantial line of privileged services and benefits, such as the new BisB Loyalty Points Program and the ability to withdraw 50 per cent cash of the maximum credit limit associated with the card. Among an assortment of amenities which includes exclusive access to airport lounges in various locations across the world, AlThuraya customers will also benefit from a dedicated Relationship Manager.
Effectively, we aim to facilitate a more seamless banking experience for the HNWI, the Privileged Banking Services enables HNWI to access preferential rates on deposits and financing, take comfort in obtaining priority in queuing at the Bank’s branches and financial malls, and finally, enjoy an increased daily draw rate when withdrawing from the Bank’s ATMs and point-of-sale machines.
What are your thoughts on the broader landscape for Islamic banks in Bahrain and beyond? Are they doing enough to push forward innovation, both in terms of products and technology?
The world of banking is changing in response to the digital revolution, and Islamic banking is no exception. Since we were established in 1979 as the first Islamic Bank in Bahrain, there has been a significant rise in the number of Islamic Banks taking shape locally and regionally. In fact, across the Middle East, Africa, and Asia, Islamic banking has grown to become a prominent means of financial management, and we can see it increasingly emerging in Western economies as well. Islamic banking is starting to offer a real and attractive alternative to the conventional financial services, and as we become part of a global economy, the competition is fiercer than ever, and the banks that do not evolve will get left behind.
The smaller size of Islamic Banks also benefits them in being more agile and flexible for change. I believe that in order to achieve sustainable impact that is truly transformative banks need to embrace innovation as a mindset from within. Islamic Banks in Bahrain need to cooperate with local government bodies and organisations in order to develop the national digital infrastructure to facilitate the innovation in products and technology. Islamic Banks also need to work harder on achieving efficiency internally, by implementing time saving technologies within their operations and processes, while continuing to train their staff in order to truly push innovation.
What else do you think the industry needs to work on?
The industry needs to continue to work on driving market share, differentiating themselves and embracing technology and innovation. Moreover, Islamic Banks need to collaborate to address other existing challenges including inconsistencies of opinions and documentations among banks in different jurisdictions. Islamic Banks need to also collaborate to grow further through M&As and expanding into additional business activities and markets.
What makes you optimistic?
I am optimistic about the future, there has been a significant growth in the Islamic banking sector mainly in the past 10 years. Moreover, I believe that the global economy is set to improve and I am confident that BisB will continue to grow in the years to come. The entire region is rapidly evolving in the wake of shifting market trends and the digitisation drive. Our nation’s start-up ecosystem is flourishing more than ever before, and the success of Bahrain FinTech Bay further proves the vital role entrepreneurship plays in accelerating diversification, encouraging growth and creating valuable jobs. Likewise, the real estate, trade and manufacturing markets are on the rise, new projects and initiatives are being developed in line with Bahrain’s 2030 Economic Vision, further cementing Bahrain’s future outlook.
On a personal note, I look forward to seeing the new innovations and digital solutions that arise as technology continues to advance. It has already become a part of our daily lives, transforming the way we do business, how we communicate, and how we go about our day. I predict that this next wave of change will fundamentally change our lives for the better.