Digital Adoption Key to Changing Business Dynamics

Customer Centricity

Doha Bank hosted knowledge sharing session on “Strategic Customer Profitability” through “Customer Centricity” followed by dinner at the Doha Bank Auditorium on 23rd February 2019. The event was attended by Dr. Bala V. Balachandran, J.L. Kellogg Distinguished Professor of Accounting & Information Management, Northwestern University, USA, he is also Founder, Dean & Chairman, Great Lakes Institute of Management, India. Dr. R. Seetharaman, Chief Executive Officer of Doha Bank introduced Dr. Bala V Balanchandran. The session was also attended by prominent professionals and top corporates.

Dr. R. Seetharaman spoke on the fourth industrial revolution and emerging digital trends. “The fourth industrial revolution combines technologies in innovative ways, reshaping the way people live, work and relate to one another. Industries are being redefined, the work space is undergoing changes, robotics and artificial intelligence are going to play important roles and the customer will be more empowered in the digital environment,” Banks need to manage the change by redefining their business models to deal with stake holders such as customers, regulators and shareholders. Customers are information-centric and not location-centric. To adopt to the digital changes you need to be quick. Realignment of resources will happen because of technological developments,” Digital eco system is significantly more than digital banking, it takes a holistic view of the customer. The connectivity between various service providers is lot more in a “digital eco system” than in a digital banking environment. Qatar offers an e-commerce market worth almost $1.5bn in 2019. The Middle East and North Africa (Mena) region is projected to record e-commerce sales growth of 21.4% to reach $28.5bn in 2019. “Qatar is first among Arab countries in terms of engagement with mobile services and applications. Qatar reached the highest score 6 on the GSMA Global Mobile Engagement Index (GMEI). Doha Bank received the ISO 27001 accreditation which is a testament to commitment towards information security and data protection. At Doha bank, it is of great importance to following the best standards in maintaining the confidentiality and integrity of information assets and our focus has always been on continual improvement of people, processes and technologies to ensure the robustness and resilience of our information management infrastructure in the face of changing consumer needs and the evolving security risk landscape. Doha Bank has launched first Qatar Exchange Traded Fund listed on Qatar Stock Exchange under the symbol ‘QETF’. Doha Bank and MasterCard launch suite of new Contactless Debit Cards. For the first time, Doha Bank customers will also be able to carry out e-commerce transactions with the added security of Mastercard SecureCode® and QPAY (Qatar Central Bank Payment gateway system) using their Mastercard debit cards. Doha Bank has also launched a new Arabic Doha Sooq website with driver delivery application. It has launched several other new propositions in 2018 such as Al Jana series 7 aimed at longer term savings, Al Dana 2018 scheme, online banking loan origination for Doha Bank customers, What’s app chat service integrated with FB messenger and Hello Doha, enhanced mobile banking app version 6.1.0 with several enhancements as well as enhancement of services through our online and mobile platforms such debit and credit card activation, e-statements and other such features.

Dr. Bala V.Balachandran spoke on achieving Strategic profitability through Customer Centricity. The 4th Industrial revolution has brought in AIMLA (A Combination of Artificial Intelligence, Machine Learning and Analytics). The new revolution is morphing the business environment, resulting in changing workforce, new competitors, decreasing margins, global competition, changing technology, demanding customers and manufacturing/service excellence. It’s not just start-ups that are leading this technology revolution. Several companies are going mainstream and gung-ho into new technology. In fact, AI is so common, even the biggest online giant Google uses it, which you can see while performing a search on the latest cricket score or even any country’s election results online. The catboats in several customer service calls are AI based and several companies are now dedicating wings for developing AI based catboats. Alexa (Speaking robot advertised on TV) is an amazing example of AI in the palm of our hands. So companies are already making great strides in AI and the space is actually getting quite crowded. Gartner predicts that by 2020 AI would have created more jobs than it has eliminated already. The report states that there will be several High skilled and management jobs in the field of AI in the future but will also create low skilled jobs.

Dr. Balachandran also discussed on levers to maximize profit by 1) Cost Management and 2) Revenue Management. An effective strategy lies in managing the variable cost as a percentage to increase or decrease in sales prediction. The relentless pursuit to eliminate Non-Value added activities and optimize resource utilization effectively and efficiently is defined as Cost Management. For effective improvement in profits, making cost as a core competency will help in defining the drivers to profitability. Revenue management is the art and science of predicting real-time consumer demand at the micro market level and optimizing the price and availability of products. The objective of the revenue management is to sell right product to right customer at right time for right price. At any point of time for the purpose of effective cost management, Variable costs not to exceed 50% of the total revenues of the company and for effective revenue management Revenues should be more than 50% of the variable costs, this helps the organization in maximizing the profitability.

Dr. Balanchandran spoke on the business models of the mega size corporation across the globe. This multinationals focus on Activity based management, the technique requires focus on core process & Quality as a ticket to entry. He mentioned on Fed-Ex, Wal-Mart and CostCo focusing on operational excellence, whereas Airborne, Home Depot and Nordstrom focusing on customer intimacy and Nike, Merck and Sony focusing on Product Innovation/ Leadership, the core focus on the strategic process management driven by objectives like 1) Constancy of purpose 2) Performance measures 3) Value, Revenue, Cost Drivers 4) Informational needs 5) Organizational needs, will lead to effective profitability management. He mentioned about golden rules for entrepreneurship in today’s digital World are 1) Be Distinct or Get Extinct and 2) Your Network is your Net worth. The examples like Uber, Google, Facebook, Amazon and Apple just merely represent set of the universal pattern today. We have moved from an age where technology was a business opportunity to a time when technology is the driver of all businesses. Today, the market is replete with options from both financial institutions and other unorthodox investors eager to fund ideas with any potential. The entrepreneurial landscape today therefore, is vastly different. It is certainly more challenging but for different reasons. The biggest challenge lies in conceiving that great idea that has the potential to make profits. Digital adoption is key to changing business dynamics.