How have digitization services affected banking services in the Kingdom, and how is Bank AlBilad positioning itself?
Among the four things Bank AlBilad has been focusing on, first and foremost is digital transformation. Saudi Arabia is one the leading countries globally in terms of accessing information through technology, and the banking sector is at the forefront of this. As such, we have reorganized our resources internally to implement an agile model to accelerate the delivery of our products, helping us to better position ourselves in the market. We were one of the first banks to launch a digital bank account in the Middle East, and our clients are now authenticated through our integration with the Ministry of Interior portal. The digitialization of banking services has significantly changed the way people conduct business, with disruption coming from many different players, even small ones. We will look at different players in the market for integration that can add further value. Introducing technology is necessary to reduce costs and generate more margins, though customers should not feel left out. We had to really revamp our customer experience to increase our engagement with clients and make sure they are served in a professional, personalized, and prompt manner. We now have a 24/7 social media engagement team in addition to our traditional call center.
What role can the banking sector play to increase access to affordable housing?
Supporting the government's initiatives to increase home ownership is also one of our top priorities. We have launched nearly 20 products with the Ministry of Housing and Real Estate Development Fund. Different people have different risk profiles and needs, and we have been raising awareness on savings and financial management, which is still not at the required levels. As such, we have launched several products that will help the national savings initiative. The Saudi Arabian Monetary Authority (SAMA) has changed the way it looks at certain ratios in banks' balance sheets to support these efforts. For instance, deposits through long-term saving schemes are given higher weight, improving the loan-deposit ratio and giving banks some liquidity relief.
How can Saudi Arabia position itself as a destination for international investors and funds, and how can the banking sector benefit from the opportunities being created?
The scale and the number of reforms that have taken place in Saudi Arabia, along with the importance of implementing them, are significant. However, we will not see the benefits of these changes immediately, as some hurdles and interruptions could occur along the way. In light of the new economic agenda and reforms, rating agencies have confirmed the robustness of the Saudi economy. Notably, the government recently announced the highest budget in the history of Saudi Arabia. We are truly in a different era, and the new government projects and initiatives will spur demand for credit and foreign equity investments.
What challenges do you expect to encounter, and what is your strategy to turn them into opportunities?
The main challenge lies in the implementation, especially from a human resources point of view, because the huge number of initiatives and strict KPIs require skilled talent. Entities, private and public alike, will have to invest a great deal of time and money on training. Bank AlBilad has tripled its training budget for this purpose, placing human resources at the heart of its work.
With Tadawul upgrading to MSCI status, how do you see the financial sector evolving?
Some government initiatives will give corporations opportunities to move away from traditional banking relationships. One of the key government initiatives is fast tracking the establishment of a debt management office and the appointment of primary dealers, because without a government benchmark, the capital market will never develop. The government is also moving toward sharia-compliant securities and sukuk. We have also seen different forms of financing, and this will increase the diversity of capital, finance, and liquidity for companies.