KUWAIT CITY, Dec 9: As Platinum Sponsor, Kuwait Finance House (KFH) has recently participated in the 26th Annual World Islamic Banking Conference (WIBC) which was held in Bahrain under the patronage of the Prime Minister Prince Khalifa Bin Salman Al Khalifa, and in partnership with the Central Bank of Bahrain.
On the theme of “Mega Trends in Banking and Finance”, The WIBC 2019 was the largest gathering in the world with an attendance of over 1000 delegates including regulators, industry leaders, bankers and experts. The Group Chief Executive Officer at Kuwait Finance House (KFH), Mazin Saad Al-Nahedh participated in a panel discussion on the growth opportunities of the Islamic finance industry and the challenges and risks facing the industry with attendance of CEOs in some Islamic banks.
Managing Director and CEO of KFH Bahrain, Abdulhakeem Al-Khayyat also participated in a panel discussion featuring the objectives of Sharia and Islamic finance. The panel discussion discussed the current landscape of Islamic banking and its future trends.
Al-Nahedh said that the banking industry faces challenges in light of the rapidly changing needs of customers and their expectations, competition with non-banking companies, and the great need to invest in cutting-edge information technology.
He added that the growth of operational activities and achieving growth rates similar to those recorded in the past decades, in addition to fluctuations in oil prices and their results, negatively affect economic growth in general since government spending represents the main driver of growth in this region.
To address these challenges, Al- Nahedh explained that banks are developing a highly sophisticated planning model to be better prepared for any potential future risks using new emerging technologies that rely on artificial intelligence, and data analyses to meet the growing expectations of customers. He noted that the innovation which is based on new digital financial technology (FinTech) would change the business model of banks, while banks would achieve operational excellence through adopting the best practices and meeting the requirements of the relevant regulatory authorities.
Fintech and BigTech
Al-Nahedh emphasized that “KFH”, like the largest global banks, invests strongly in banking innovation and the latest technology while co-operating with “Fintech” companies to meet growth, customers and industry needs.
He pointed out that digital banks were emerging as competitors to large financial institutions as they are increasingly meeting the growing consumer demand for digital services. Al-Nahedh said that there are several major obstacles inhibiting collaboration between banks and FinTech companies.
From the banks’ perspective, FinTech companies don’t provide sufficient IT security, while they point out to the differences between themselves and banks in terms of management, culture, and operational processes.
The future of the banking sector is determined by its ability to adapt to changing customer expectations and its rapid transformation, increasing competition, its infrastructure and cost management. These can be achieved using technology and the support of regulatory authorities and by monitoring the sector, he added.
Al-Nahedh explained that customer satisfaction now is not easy to achieve, and that his behavior is linked to global trends is more sophisticated than before, especially since he has access to more information and lower cost channels.
He considered that improving the customer experience is only one way of enhancing the bank’s position and financial performance compared to other banks while when it comes to launching a new product, the customer prefers reliability and credibility over other considerations.
In this respect, today’s customer takes into consideration the value of the service/product as well as banking experience. Al-Nahedh also stressed that with increased reliance on modern technologies, banks have taken a greater role in fighting financial crimes and protecting user data and financial infrastructure, especially as they operate in a highly regulated industry.
It is worth mentioning that 2019 WIBC edition discussed the harmonization of Islamic finance standards, the digital transformation, sustainable finance and M&A and consolidation in the GCC region. The conference hosted special session on where the industry is heading with respect to the objectives of Shari’ah.
In addition, experts shared their expertise and assessment about the global economic outlook while focusing on the opportunities, challenges and the way forward for the Islamic finance presented by the Belt and Road Initiative of China, as in earlier years, WIBC also hosted a CEOs power table to discuss what keeps the CEOs awake at night.
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