The precautionary measures taken to curb the spread of the novel coronavirus (COVID-19) has created great opportunities for banks to expand in digital services, says Mohamed Farag, Deputy Chief Operating Officer at the Commercial International Bank (CIB) – Egypt.
In an interview with Daily News Egypt, Farag added that CIB has adopted a long-term strategy over the past years to develop digital channels and automate payments.
He noted that the number of transactions via Internet and mobile banking increased by 100% following the emergence of the virus. He revealed that CIB intends to provide facilities through these services in the coming period.
What are the most important opportunities and challenges for banks to expand in digital services after the emergence of the coronavirus?
Undoubtedly, the COVID-19 emergence created great opportunities for banks to expand in the provision of digital services. We can say that the post-coronavirus era will differ significantly, changing many daily habits and activities of citizens, such as visiting a bank branch or even using ATMs. Therefore, banks should focus on encouraging their customers to adopt digital channels tools, such as Internet banking, Mobile app and mobile wallet, as an alternative to traditional methods, such as ATM cards that could pose the risk of infection.
Perhaps one of the most important challenges that banks may face in this regard is changing the banking culture of customers to rely more on digital channels. This can be achieved through launching awareness campaigns on the importance of digitalisation or cutting fees on digital banking services.
What are CIB plans to develop its digital infrastructure to cope with these developments?
We adopted a long-term strategy over the past years to develop digital banking systems and automate payments. It led to the increase in automated operations at the expense of manual ones. Therefore, the bank continues to implement its strategy for developing electronic systems.
The bank always has short- and long-term plans to develop its digital channels, either before or after the pandemic, as it is not related to the coronavirus, in particular, but rather to increasing digital transactions.
CIB was one of the first banks in the Egyptian banking sector to realise the importance of digital services. We were one of the first banking institutions to provide these services to our corporate and individual customers, such as Internet banking, mobile banking, smart wallet, and Zaki the bot (the virtual digital assistant), among others. Customers can enjoy these services without the need to visit bank branches and carry out operations the traditional way.
What are CIB’s new digital products in the coming period?
The bank adopts several routes in line with the Central Bank of Egypt’s (CBE) plan to enhance financial inclusion. One of these routes is the transformation into a cashless society through the development of digital products.
The bank has some under-implementation digital channels and services that will be announced once completed, in addition to developing the existing services.
How do you see the future of digital banking after COVID-19?
Digital banking is the only way to limit cash dealings, in line with social distancing measures. CBE has adopted several measures to facilitate registration for digital channels such as smart wallets. We also allowed registration for smart wallets through only sending SMS with the National ID number and the last 4 digits of a bank card (debit – prepaid – credit) to “4435”, to open new wallet and link it to bank cards without even leaving the house.
The smart wallet service is available to all Egyptians, and it does not require having a bank account. Through this service, customers can perform many transactions, such as money transfer, bill payment, online shopping, and purchasing through QR Code.
How far have customers adopted new digital banking services since the emergence of the coronavirus?
We have witnessed a noticeable increase in the use of Internet and mobile banking services after the emergence of the coronavirus. The number of banking transactions through these means increased 100% year-on-year (y-o-y) in July 2020.
The total number of mobile and Internet subscribers in July 2020 increased by 20% compared to December 2019.
We have also monitored an increase in the number of subscribers to the smart wallet service for individuals by 17% as of July 2020 compared to December 2019, maintaining the highest activity rate in the Egyptian market, which reached 21%.
Additionally, the number of transactions over corporate Internet banking increased by 27% y-o-y in July 2020.
CIB is ranked 1st in the electronic governmental payment over Corporate Payment Portal (CPS) in the market across all operating banks in both volume and value of transactions.
The bank has also made available new services such as transferring money to e-wallets through automated clearing house, which provides a same-day fund settlement.
In general, the digital banking channels and services for companies have witnessed a big leap since the beginning of the crisis, due to the customers’ full dependence on these channels as an alternative to cash transactions and paperwork procedures.
The bank is in the process of providing loans and facilities through mobile and Internet banking in the coming period, while this service is available currently through the bank’s website.