With the growing number of apps downloaded on people’s smartphones, a new trend has emerged in recent years; the rise of the Super App where services from payments and banking to lifestyle and shopping are combined into one single App, creating a more seamless experience for customers. Proponents of the technology argue that the integration not only provides more convenience for users but also increases engagement and loyalty.
However speaking to Seamless Xtra at the Seamless Middle East show, in Dubai, last week, CEO of Invest Bank, Ahmad Abu Eideh emphasized that banks, in particular, need to take a more specialised approach.
“When it comes to Super Apps specialisation is so important. Yes, these Apps can be extremely useful for the end user, but banks can’t be a jack of all aces. Not only do we need to be focused on what we want to achieve out of this Super App but it’s extremely important to have a specialised Super App revolving around a theme.”
A Super App choice?
The viewpoint of the Invest bank CEO follows a recent Accenture report on the top trends in banking that suggested banks were facing a crucial moment where they would each have to make a Super App choice about how best to respond to this phenomenon. It came up with three paths. They can stay the course and ignore the whole thing, partner with a Super App or thirdly, try to build their own Super App.
Currently, a key focus for Invest Bank is developing a lifestyle platform on the cloud, a strategy that has accelerated since it selected Temenos Banking Cloud to help with this digital transformation in partnership with NdcTech toward the end of the last year. As part of the deal Invest Bank is adopting an end-to-end retail and wholesale banking solution on the Temenos Banking Cloud, becoming one of the first in the UAE to adopt a full SaaS model for its digital and core banking platform.
“Additionally, the Cloud will provide resilience to the bank to meet growing customer demand, especially Gen-Z and millennials. At Invest Bank, we believe that the best approach is to provide tailor-made financial offers based on the preferences and habits of our customers,” Abu Eideh says.
The front-to-back capabilities of Infinity and Transact delivered as SaaS on Temenos’ open platform for composable banking is expected to help Invest Bank to modernise legacy platforms and bring new products to market more easily than before. Planned enhancements include instant onboarding and origination with automated approvals based on AI-based rules, Abu Eideh says.
Abu Eideh calls it a “digital transformation journey”, explaining ‘it starts from changing our own core banking system to something that is fully cloud native, that is full SaaS model with AI embedded in the core.
“Exactly six months ago, we embarked on a journey to replace the existing technology we have and put in place the most advanced there is out there at a global level so the next twelve months we will continue our journey of implementation and innovation which is the ultimate enabler for us to achieve our strategic objectives.”
Finding a niche
A key driver behind the push to modernise its core banking system is partly the need to stand out in what has become an increasingly competitive market in the Middle East.
“Although it’s a way, it’s not the only way,” Abu Eideh says. With so many banks to choose from today, our industry is one of the most highly competitive industries in the UAE. You can compete with the product offering but most banks offer a similar product. You can also compete with pricing but there is only a certain level that you can come down to before you can’t go down any further. Most importantly, to my mind is providing superior client experience and if you can provide that you automatically have a niche in the industry.”
The CEO is aware that developing the appropriate technology with the right approach is both an opportunity and challenge for banks looking to replace legacy infrastructure over the next five years.
“To talk about the positives first; in this region, we have a superior regulatory environment. Not only are regulators really supportive but they know their stuff, and are very responsive. Liquidity at this point in time is a flush. The banks are full of liquidity right now while products are quite developed compared to other regions globally, but there’s always room for improvement.
“And as for the challenges; yes, there continues to be talk of a recession, especially in the U.S but to some extent we are sheltered in this region. There is usually a lack period in between a recession in Western markets compared to this part of the world. But not to the full extent.
“The challenges in the banking industry are always prevalent be it on the liquidity side, be it on oversupply in segments like the real estate market, or on the FX side so we need to continue to keep our eyes open and keep assessing the potential risks at all times.