Full speed ahead

The Internet is still in its infancy in the Kingdom of Saudi Arabia and nobody knows whether WAP will ever take off. So why is National Commercial Bank making the development of electronic channels such a core part of its entire strategy?

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By  David Ingham Published  September 6, 2001

Why WAP?|~||~||~|It wasn’t competitive pressure that led National Commercial Bank (NCB) to become the first bank in KSA to introduce WAP banking last month. Neither was it the reason why NCB was also KSA’s first to introduce Internet banking in June 2000.

Look at KSA and you see a country where brand loyalty is intense and it’s not unusual for companies to have more than 50% share of their market. NCB boasts over one million retail customers and just reported massive first half profits before provisions of SR1.184 billion (US$315.7 million.) In this environment, it would be all too easy to sit back and avoid any pressure to innovate.

However, Al-Hamedi M. Alanezi, business system manager and one of the main architects of the WAP service, says NCB was discussing the Internet in its management meetings as early as 1996. And even though the number of AlAhliOnline users remains modest (around 5000), investment in electronic delivery channels continues apace, with more ideas in the pipeline.

Basically, NCB is in this for the long haul, confident that the return on investment will come with time. “The strategy was developed both by the business and by the IT sides [of the bank],” says Alanezi. “Both realise what the opportunities are. Maybe at this time it isn’t making money but sometime down the road it will be profitable.”

The reason why this multi-million Riyal initiative will pay off, he believes, is the convenience factor. Take the ability to pay STC bills online, for example. Alanezi believes the bank’s customers will love being able to avoid the queues at payment offices.

He also supports the commonly-held view in the Middle East that WAP services will be a hit because of the region’s mobile culture. Never mind the failure of WAP elsewhere, he argues.

“On the Internet, people have to be more computer literate,” says Alanezi. “On the mobile, it’s a different story. It is in your hands and the amount of knowledge you need to use it is very minor.”

He calls on informal figures from STC to support his view that the mobile phone is where it’s at. According to those figures, around two million SMS messages are zipping around the Kingdom every day, many of them written in Arabic.

As of early August, around 700 people had applied for the WAP banking service, dubbed ‘AlAhliMobileBank’, and around 200 accounts had been activated. At this stage, therefore, it’s really too early to make a guess on whether AlAhliMobileBank will be a hit.
||**||But will WAP take off?|~||~||~|
Look outside KSA, however, and the case for mobile banking, or indeed any other kind of mobile data service, is unproven. Analysts still can’t decide whether the concept of accessing data on the move is something users don’t want, or if they’ve just been turned off by the text heavy, graphics free world of WAP.

Alanezi is clear about one thing, however. As wireless technology develops, NCB intends to be at the forefront.

Alanezi and his team are in constant communication with STC and he has nothing but positive words for the much-maligned state telecomms provider. “We’re working with STC and we know what they will deliver in September or October,” says Alanezi. “We know that they are evaluating GPRS and plan it for sometime next year. We’re moving forward and taking on each wave of technology one after the other.”

NCB has also done a couple of things to try to make sure that AlAhliMobileBank has the best possible chance of success, WAP’s imperfections notwithstanding. One is to pack the service with features and to support transactions, making this more than just an information retrieval mechanism.

There’s account enquiries and transfers; request for statements and cheque books; credit card enquiry and payment; and STC bill payment. Coming soon, there’ll be funds transfer to other NCB customers and even to third party banks.

Another thing that Alanezi’s team has done is to try to replicate the underlying look and feel that exists on NCB’s Internet services. “The menu structure is the same regardless of which delivery channel [you use],” he says.

This integration across channels is something that business analysts say is crucial to the success of electronic services strategies. Ashim Pal, international director for Web & collaboration strategies at Meta Group, says that companies failing to provide an integrated experience could lose out.

“Organisations will have to provide single views of customers across all channels,” he says. “If you don’t, you’ll lose mindshare and customers.” For example, having an excellent Web site is all very well. But ring the same company’s call centre and find there’s no knowledge of an online transaction and the customer will be turned off.

In order to achieve this cross channel integration, companies have to select a single software platform that supports all the different functions of WAP, Internet and call centre. NCB plumped for the software and services of Logica, a major player in the banking software world.
||**||Internet offerings|~||~||~|
Whilst the introduction of WAP banking is a recent innovation for NCB, work continues on its Internet offerings. This year has already seen the introduction of AlAhliBrokerage, which offers online trading in US equities.

Recent additions to AlAhliOnline include the ability to pay your STC and NCB credit card bills, and transfer funds to third party banks. Electricity bill payment is also expected soon.

NCB’s range of investment funds is also being integrated into the site. You can now view your fund balance and trading history online, and the ability to do fund transactions is coming.

The aim of all this development work is to create what analysts frequently call the “single window,” or what Alanezi calls the “single user method.” This envisions a bank customer being able to access all the financial services s/he requires through the convenient browser interface.

The most obvious benefit of this approach for the bank is to cement user loyalty. A further benefit, however, is the possibility on the bank’s part to ‘cross-sell’ and ‘up-sell.’ The thinking is that a customer is more likely to utilise additional services (such as investment funds) online that s/he might not otherwise have considered offline.

The single window vision could become really exciting once Saudi Arabian Monetary Agency (SAMA) brings ‘Tadawul’ online. Tadawul is a new settlement and clearance system that aims to facilitate dealing in shares of Saudi companies.

Alanezi says that NCB will look to integrate the application, which is Internet-based, into AlAhliOnline. So from AlAhliOnline, a customer will be able to go straight into Tadawul and instantaneously debit his account as he buys shares through the system.

The number of future plans in the pipeline further shows the importance of the whole electronic services strategy to NCB. The launch of an Internet payment gateway, similar to what Comtrust offers UAE merchants, is imminent. This will allow business to consumer e-commerce to be carried out securely, with NCB taking a small cut of transactions carried out through the system.

A further step in the evolution of the strategy is to begin offering services focused squarely on corporates. Retail services were developed first because that is where most of NCB’s customer base lies. However, “we are working on a very big project for our corporate customers,” says Alanezi. “They require more specific functionality.”
||**||Conclusion|~||~||~|
The investment made in NCB’s electronic services strategy so far is significant. All the signs indicate that this investment is only likely to continue. “We only launched [WAP banking] last month, but we’re going to keep on adding new services that add value for the customer,” says Alanezi.

It certainly helps if you have the financial might of an organisation like NCB behind you. The bank’s solid first half profits were achieved on customer deposits totalling SR 76.3 billion (US $20.4 billion) at the end of the period and total assets of US $26 billion.

Still, even if you’ve got the money, you have to spend it wisely. At this early stage in the Kingdom’s ‘e-development’, it’s impossible to say whether or not NCB’s electronic services strategy will be a hit. What does seem certain is that the investment and commitment on the bank’s part will all be there.||**||

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