REGIONAL BANKING COVERAGE

Oman 2020 | FINANCE | B2B

As the government pushes forward with its privatization drive and PPP program, Ahli Bank and BankDhofar are investing in cutting-edge technologies and partnering with leading fintechs to enrich the customer experience and come out on top.

Said Abdullah Al Hatmi
SAID ABDULLAH AL HATMI
CEO
Ahli Bank
Abdul Hakeem Al Ojaili
ABDUL HAKEEM AL OJAILI
CEO
BankDhofar

How do you expect the current macroeconomic situation to impact the banking sector in Oman?
SAID ABDULLAH AL HATMI Oman's banking sector witnessed steady growth in 2019 despite the challenging market conditions and the overall complicated macroeconomic environment. Within this context, the Omani government is proactively taking various measures to improve the economy. More recently, within the context of diversification through the Tanfeedh program, the government enacted several key legislations to attract investment and privatize state-owned enterprises. These measures will positively impact the banking sector, as there will be more opportunities to provide term loans and working capital facilities to the sectors in focus, advising government entities and private companies in raising funds locally and internationally, and offering other financial advisory services.

How is the banking sector positioning itself to successfully capitalize on new digital trends?
ABDUL HAKEEM AL OJAILI Products and services in any industry can be copied. What cannot be copied is organizational culture and customer experience, which is the foundation on which thriving businesses in the service sector stand. At BankDhofar, for example, we have successfully created an organizational culture where we treat our customers like Omanis treat guests. We offer them the highest service quality in the most professional and convenient way. We have equipped all our outlets with cutting-edge technology to further enrich customer experience. We also have a dedicated team of relationship managers, who are trained to cater to our guests, meet their requirements, fulfil their needs, and even exceed their expectations. Our pledge is to offer the best customer experience through service excellence, nurture creativity and innovation, implement a lean operating model, and create a sustainable performance culture that would bring value to our stakeholders.

Which sectors will drive demand in the medium term?
SAAH In the short and medium term, growth in the banking sector is expected to be driven by the key industries outlined by Tanfeedh. Looking at a longer-term horizon, demand for credit from power projects also represent a key area of profitability. The government seeks to increase private-sector participation and monetize its assets to increase its revenues. This will lead to more opportunities for banks to provide corporate finance advisory services. With regards to infrastructure projects, there will be opportunities to set up and operate sector-focused funds for real estate, education, and healthcare. Last but not least, there will be more opportunities for advisory services for PPPs in the field of education and healthcare.

What measures has the bank put in place to achieve its digital strategy?
AHAO We are currently in the fifth year of our comprehensive transformation journey. We have revamped all our digital channels, upgraded our core banking and customer relationship management systems, introduced an enterprise resources planning program, and updated all internal and external processes and procedures. We have also invested in the development of our team's capabilities across all organizational levels. We realize that fintech is the future of the banking industry, so we are currently laying out the infrastructure for further digitalization. For example, we introduced international instant transfer through RippleNet, a brand new blockchain-based remittance service, via BankDhofar mobile banking app. In terms of robotics, we have automated many processes in the back office. We launched a flagship drive-through banking service for the first time in Oman as well as a number of multifunction kiosks in selected BankDhofar outlets.

How is the banking sector engaging with SMEs?
SAAH For banks, the key problem when financing SMEs are the methods used to analyze the creditworthiness of SMEs and the conventional loans granting system. To hedge their risks, commercial banks, together with the government, are running education and tutoring centers, as well as government-backed loan programs. In the long run, these initiatives will reduce banks' risks and increase the appetite for SME lending in Oman. We are starting to see major improvements led by the authorities, which have shifted the focus to Industry 4.0, where many SMEs can develop along the supply chains of bigger players and offer a valued-added proposition.

How do you expect the relationship between banks and fintechs to evolve?
AHAO Banks are gradually shifting toward technology-based applications. The relationship between banks and fintechs is more of a partnership than a competition. We invest in the latest fintech to protect our customers and stakeholders from any security breach. There are some regulatory challenges in terms of information sharing, but the central bank is open to new changes. It is currently reviewing a banking law that would serve the interests of banks and customers.