The Q1 2015 results are a testament to Doha Bank's unsatiated appetite to grow: Net profit was QR420 million, an increase of 5.2% compared with QR399 million during the corresponding period in 2014. The total equity announced was QR10.7 billion and return on average shareholders' equity stood at an impressive 19.7%. 

In a free-wheeling interview, Dr Seetharaman discusses the impact of oil prices on the GCC banking sector, how digitisation of banking services will make the banking experience better for customers, paperless banking, future plans including the recent opening of a Doha Bank branch in Mumbai in India, among others.

Which sector will the newly opened branch in Mumbai target to develop business in the coming years?

We will be focussing on corporate, retail, treasury, trade finance and project finance to develop our business. Some of the key products and services include comprehensive NRI 4-in-1 account packages, privileged status for HNIs, credit passportability, project finance/advisory services to link GCC markets, ECBs, and unique deposit/investment products for non resident Indians.

All these products would be appropriately supplemented by technology-driven solutions such as digital account opening, Tablet banking, best-in-class mobile as well as phone banking solutions with SMS alerts, robust Internet banking solutions, instantaneous e-remittances from GCC to India, online payment integration with utility services and a dedicated India Desk across all Doha Bank overseas locations to service its customers.

What measures will Doha Bank take in India to meet the challenge from the competitive retail banking operations with already established banks?

As a leading bank in the Middle East with a global footprint, Doha Bank has got some unique selling points for the strong non-resident Indian community. Doha Bank is establishing itself in India as "The Bank of Gulf Indians."

We will take care of the banking needs of this niche segment in the home country (India) as well as the host country (GCC). We are offering tailor-made solutions to the NRIs with competitive pricing, best exchange rates, free online instant remittances to India and within India backed by seamless service leveraging our network, gulf experience, partnerships and latest technology.

Do you agree with the reports that say GCC banks will be under pressure in funding liquidity due to falling oil
prices? If it is true, what should the banks do to avoid such a situation?

The fall in oil prices is going to impact growth in the GCC region and the liquidity as well. Liquidity in both the government and private sectors will be affected. Deposit mobilisation will be challenging for the banking sector. Banks have to strengthen their relationships with major customers to procure major deposits.

"As a leading bank in the Middle East with a global footprint, Doha Bank has got some unique selling points for the strong non-resident Indian community. Doha Bank is establishing itself in India as 'The Bank of Gulf Indians'."

What is the reason behind major Qatari banks, including yours, announcing plans to raise funds through issuance of Tier -1 capital instruments and others?

The Basel III framework focused on improving banks' resilience by elevating liquidity and capital standards. Accordingly, to improve their capital position banks planned to approach capital markets.

Additional Tier 1 instruments as introduced by Basel III as a new capital category gave an option to the banks to raise capital at an optimal rate yet strengthen the capital base. The major driver of the issuance within Qatar and other markets seems to be investor appetite for a debt-like instrument yet participation in the equity of the bank with high yields.

The yields are high but still lower than dividend yields of the shares, hence, a cheaper form of capital for the bank, satisfying both bank and investor requirements. The instrument also expands the market and liquidity horizon for issuer banks.

Can you describe how your bank is increasing focus on customer experience to gain the edge over your competitors?

On the retail front, customer retention focus is done through a number of relationship-deepening measures through cross-selling. We have recently launched Tablet Banking to acquire new customers. We will continue to market personal loans, the most suitable retail lending product in the Qatari market space with product innovation.

We will focus on high-income Qataris to attract big-ticket stable loans and improved focus on rental income loans and loans against deposits. We will also focus on cross-border housing loans, especially in the UAE and India, as well as leverage digital marketing through online marketing, online calculators, Search Engine Optimisation (SEO) and Search Engine Marketing (SEM), database marketing, online lead generation, etc, for improved penetration.

What are the latest trends taking place in the digitisation of banking services in Qatar as well as in the GCC region?

Internet usage in the GCC is relatively high, with 82% penetration in Qatar. GCC countries are already well positioned to take advantage of their customers' positive attitudes toward Internet use. In the next five years, online services are expected to triple and online sales to new customers to increase five-fold, which is going to benefit the banking industry.

In June 2014, the United Arab Emirates Banks Federation announced the launch of a Mobile Wallet project, which incorporates the facility for smartphones to be used for cashless payments at merchants and retailers in the UAE. The Mobile Wallet services will be offered through mobile applications in 2015. Banks' strategic ties with the payment industry have enhanced in recent years and have resulted in offerings such as digital wallet and tablet banking for the benefit of the customer.

Digitisation is also helping banks to offer round-the-clock services to customers without increasing capital costs of setting up full-fledged branches. Setting up electronic branches (small branches) with longer hours at more popular locations is a better solution for banks than buying/renting stand-alone locations. Digital banking allows banks to migrate day-to-day transactions to e-channels, reducing transaction costs. It allows banks to use branches for high-value advisory services.

With e-commerce and m-commerce gaining popularity, what steps should Qatari banks take to grasp the opportunity?

Retail banks are facing disruption in areas such as technology - where digital is reinventing banking; consumer - customers are redefining the rules of the game; competition - every bank must learn to innovate. Banks in Qatar also need to ramp up their strategies to adapt to this change. Doha Bank recognised the emergence of e-commerce and m-commerce by being the first and to date the only bank in the country with an e-commerce portal, Doha Souq.

Doha Bank also maintains one of the largest market shares in the e-commerce payment gateway processing space. One of the many firsts for the bank was introducing m-commerce using debit cards. Banks should equally work with regulators, that is, ICT & Qatar Central Bank (QCB) to set an e-commerce roadmap that is conducive to the changing demands of consumers.

Qatari banks are already working various tie-ups in the payment industry and telecom operators and should continue to explore new such tie-ups to provide various services to customers. The e-commerce value chain is different from actual physical commerce, and each element needs to be modified to capitalise on this growing trend. Banks should also come up with innovation in products such as tablet banking which Doha Bank has introduced recently for the benefit of customers.

What is the future for online banking in Qatar when we can see paperless
banking in the coming years?

Online banking is evolving every day with the emergence of smartphones. This is the ultimate way to serve customers and stay connected to your customers anywhere anytime. At this pace, paperless banking is no longer a dream, it's a reality getting clearer day by day.

Steadily, digital forms are replacing the printed forms, viz. statements, online forms, etc. We are already seeing paperless banking coming up in Qatar's retail segment on account of m-commerce and e-commerce developments, though it may take some time to achieve 100%. Once the digitisation factor is also adopted in the corporate segment, then paperless banking can be fully achieved.

© Qatar Today 2015