Abdulwahab Al-Roshood, Acting Group Chief Executive Officer at Kuwait Finance House (KFH), said that the Covid-19 pandemic was a good opportunity to test the resilience of KFH`s performance, business activities, and digital transformation strategy.
He added that during the past year, and at a time when many sectors and industries were suffering from the repercussions of the pandemic, KFH maintained its high performance and provided high -quality mobile banking services without interruption along with focusing on health and safety of its employees and customers.
During Global Finance virtual round-table meeting entitled: “Kuwait`s Banking and Finance in Kuwait,” that brought together senior officials, experts from the banking and financial services sector, prominent economic figures from the public and private sectors and representatives from financial technology companies, Al-Rashood said: “while the COVID-19 pandemic represented an unprecedented challenge with severe socio-economic consequences, our comprehensive and proactive strategy enables us to effectively manage the crisis by fully utilizing our digital tools to facilitate customer services”.
He explained that during 2020, the Kuwaiti economy was struggling with economic and social pressures such as the decline in oil price, undiversified economy, weak operating environment, fiscal deficit and demographic imbalance.
“The spread of the COVID-19 virus has added stress on Kuwait`s financial position and economic activity, limiting its ability to address the inherited socioeconomic issues. However, the pandemic has also prompted vast policy responses and relief measures by the local regulators and the finance sector to swiftly absorb the Covid-19 impacts. For instance, the banks were largely able to accommodate the unprecedented situation thanks to the higher level of capital and liquidity they accumulated compared to recent crisis episodes and the precautionary provisions they allocated based on the regulatory requirements,” He added.
He noted that the outlook for recovery rely on the recovery of the economy and the sentiment of the market which are of course associated with the status of Covid-19.
Meanwhile, Al-Roshood sees that the local economy and businesses require the government to keep spending on planned projects and also take aggressive measures to prop up the economy.
He confirmed that the pandemic hasn’t treated all sectors equally, as some sectors were hit, while others benefited from it. SMEs, Infrastructure and construction, aviation, hospitality, and transportation are the sectors that were deeply hit but still can revive fast when things come back to normal. However, some sectors like tech companies, e-commerce or even media streaming took advantage of the pandemic as the demand exponentially surged on such sectors.
Challenges of technology
Al-Roshood mentioned that the banking industry has seen huge evolution and it is undergoing a process of digital transformation where many processes are being fully automated.
He added that Kuwaiti banks are keen to invest in banking and financial technology and digital transformation. This trend would enhance the role of the private sector in the Kuwaiti economy as it is a key part of Kuwait`s 2035 vision to become a regional and regional financial and commercial hub.
Al-Roshood confirmed that the CBK’s efforts in supporting banks with their digital transformation are recognized, adding that CBK has made great strides in paving the way for applying financial technology by providing sand boxes and the suitable infrastructure.
“However, the infrastructure in Kuwait might not be compatible with all digital services. The cybersecurity has been a crucial concern for banks as they think twice before rolling out innovative services i.e, some digital services are ready to go live but the cybersecurity concern hinder them,” he noted.
Al-Roshood said:” It is highly important to involve the private sector in the development plan to lift the burden off the government in its commitment to find jobs for the citizens. The private sector including SMEs spur growth that comprises a major factor for creating new jobs and supporting the development plan”.
“SME sector is one of the main sectors that are targeted to be supported by the government and subsequently by banks to achieve Kuwait 2035 vision. KFH is considered the first bank and one of the main banks in Kuwait who designated a financing department for SME sector. Moreover, Kuwait government continued to support SME segment through a special program that would encourage entrepreneurs to start their own SME business,” he added.
He noted that banks with the supervision of the government are taking all supportive measures to sustain all affected SME clients to enable them to withstand and survive COVID 19 pandemic effects through rescheduling their debt or through subsidized finance in addition to the continuity to grant new finance to unaffected clients.
Al-Roshood expressed his hope that after the COVID 19 pandemic, the recovery of the economic sector would be quick to enable SME business to rebound and grow again.
Al-Roshood confirmed that Kuwait has played a great role in dealing with the crises at the social level as evidenced by the initiative of the CBK in collaboration with government and the banking sector to defer the installments for 6 months for all bank customers. This initiative had great impact on the families and contributed to maintaining their financial level unaffected.
He added that the Kuwaiti banks also complied with government precautionary measures of minimizing the number of staff at workplaces to avoid crowding, implemented the Covid-19 protocols in an optimal manner and took part in spreading awareness of how to deal with the pandemic.
During the round-table meeting, Al-Rashood reviewed the most advanced digital banking services provided by KFH to its customers, saying that the efficiency of KFH`s digital services was evident in 2020 as transactions completed by its customers through KFHonline on the website or the mobile app exceeded 140 million.
“Being the first bank in the world to use NCR Hybrid Solution to instantly issue banking cards via tablets, KFH has also launched the digital onboarding service “opening bank account online” for new customers, citizens and residents within minutes without having to visit the branch”. He added.
Al-Roshood pointed out some of the innovative financial solutions provided by KFH such as: the free of charge "SWIFT GPI" service to track local and international banking transfers electronically for individuals and corporates via KFHonline, deposit of cheques via mobile, cardless cash withdrawal by (QR Code, Civil ID& Mobile Number), opening a gold account with options of selling, buying and trading online, instant Cheque Printing and receiving gold biscuits instantly through XTMs available at the smart branches, KFH Go, in addition to many other highly efficient digital services.
Recently, KFH has inaugurated its tenth KFH-GO smart branch that offers customers highly efficient e-services covering over 80% of the services and transactions provided by traditional branches, making it the preferred choice for many segments of customers, especially young people.
Developing the talents
During the meeting, Al-Roshood highlighted the interest that KFH attaches to developing and training the human resources and retaining talented employees, adding that having competencies and talents in all departments helps KFH to navigate the pandemic to ensure business continuity and maximum application of digitization in line with the digital transformation strategy of the bank.
He added that despite the pandemic, KFH succeeded over the past year in designing and organizing training programs for its staff covering banking, technical and behavioral aspects.
“Also, the development of KFH employees has been high priority on 2020 agenda where they have successfully concluded a series of virtual intensive courses with Harvard Business, INSEAD, and IMD to build staff`s capabilities as KFH Group Future Leaders.” He mentioned.
Furthermore, KFH granted in-scholarships to a number of employees as part of the scholarship program being offered by the bank since 2013.
In terms of Kuwaitization, Al-Roshood confirmed that KFH leads the Kuwaiti banks and the private sector as a top recruiter of Kuwaitis where citizens made up 99% of new hires in 2020. As fresh graduates made up 70% of new hires in 2020, KFH confirmed its leadership in terms of employing and qualifying national youth talents.
He noted that that KFH is the only bank to launch the "Forsah" program for the outstanding new graduates who joined KFH, adding that the bank has been investing in this program since 2009 and during the last years KFH conducted through Forsah program training courses including field visits to Big tech companies like Microsoft and global institutions, in addition to banks of the Group in Turkey, Bahrain, Malaysia and Germany.