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Finding the right mix: Innovation in financial services with Bahrain Islamic Bank 09 November 2021

Maisa J. Shunnar, Group Chief Digital Transformation Officer at Bahrain Islamic Bank, discusses how thinking like a fintech is taking the bank to new heights. 

This interview series was conceived by the Efma Future Innovation Community team to speak with those on the inside who are driving innovation agendas at leading financial institutions. 

The role of innovator inside financial institutions is not an easy one. Many factors need to be taken into account, from regulation to internal legacies, competitive forces, new technology developments, and evolving consumer demand. It is a long list. How do they arrive at the right answers? How do they know what to prioritize in a changing landscape? Where is the industry headed in coming years? 

In these interviews, innovation leaders share their views on these important questions. Their experiences are valuable as there is no silver bullet or crystal ball when it comes to innovation. And while everyone must chart their own path, we are not alone. We can leverage learnings and experiences from those around the globe who are working on the same problems. This series will provide the type of insight that community members will no doubt find valuable in their own innovation quest.

The role of innovator in banking is not an easy one - how do you personally approach the challenge? And how does your institution think about innovation with all of the existing challenges, threats, and legacies in the industry?

To adopt an innovative mindset requires thinking openly without any limitations, to allow your ideas to flow freely and avoid the tendency to undermine any idea. Innovation ought to have a separate and budgeted track in and of itself! It shouldn’t be weighed down by pre-existing legacies, and it certainly doesn’t follow the same framework followed in developing normal products or solutions. 

Having said that, innovation is not constricted to an age, profession, or skill; it’s all about harnessing newfound and non-linear ways of thinking. A strategy is not considered innovative unless you are prepared to forget any attachments to what’s no longer working. Instead, its about thinking of creating new business models, new products, and new partnerships, with unfiltered courage, determination, and perseverance! 

As financial institutions build their digital agenda, it is imperative they find the right mix between fintech cooperation, innovations labs, open programs and internal processes. How do you approach this in your institution? And how do you see this evolving in the coming years - will we see more innovation plugged into banks from the outside or innovation built from the inside? 

I couldn’t agree more, in fact, this careful mix is the secret recipe for success! I’m all for open collaboration with fintech players, rolling up our sleeves to adopt the same agile, fearless thought process as fintechs and Big Techs. Start with sponsoring a startup, running a hackathon or two, assigning a budget for innovation – or better yet, building your own innovation lab. 

As National Bank of Bahrain Group, we are a proud founding partner of the region’s first cross-border, digital innovation platform known as FinHub973. Under the supervision of the Central Bank of Bahrain (CBB), it’s the first platform of its kind that connects and facilitates collaboration between financial institutions and fintechs. 

Moreover, FinHub973 enables both local and global fintechs to connect seamlessly with the Kingdom’s financial institutions enabling further exploration, and the safe testing and prototyping through a centralized digital sandbox. In fact, FinHub973 integrates the technical testing and validation of digital solutions within the regulatory framework of the CBB. 

The fact remains, we are not merely founding partners on paper, we believe in supporting as an active partner that adds value. Currently, we are running two Proof of Concepts (PoCs) within the aforementioned platform, the he first being under Bahrain Islamic Bank (BisB)- a PoC for credit scoring using AI and data analytics. As for the second, run under NBB, it revolves around finding a host-to-host solution for our corporate customers. Both PoC’s are being developed under the Finhub973 fintech competition program. 

There is a clear trend of fintech startups becoming the new digital tech providers for banks, replacing current tech suppliers. Do you see the same trend in your institution? How do you think IT departments need to evolve to accommodate this? 

With the progressive innovation and technological advances especially in the financial industry, we are seeing a strong wave of fintechs consistently appearing in the market. 

While we do encourage fintechs, alongside their innovative mindsets, at the end of the day it boils down to the nature of request or the problem we are seeking to solve. We are firm believers in supporting fintechs as key industry players, actively collaborating with them and learning from them as our peers. By that same token, we have, and will continue to have, an established relationship with tech suppliers who have efficient solutions backed up with many years of experience and solid footing. 

Testing and piloting is one thing, bringing innovative solutions to market is far more complex. What is your experience and opinion based on how your institution delivers solutions? In your opinion, how can financial institutions succeed in bringing real innovation to the core business?

Bringing innovative solutions to the mix all comes back to listening to the customer, and carrying our solid research on who your end users will be, and who all the key players are.

Success goes beyond simply meeting customers’ needs in this day-and-age, instead it transcends into actively listening and constant adjustment. 

This comes down to every detail in the customer journey, be in simplifying their onboarding process, ensuring the provision of the latest products and services across various channels, and in response to different market segments. Therefore, it entails adopting the right mix between both physical and digital delivery channels. 

At the end of the day, our relationship with our customers must go beyond the traditional banking relationship. Instead, it’s about creating a lifetime engagement, which is founded upon transparency and trust. 

According to the Edelman Trust Barometer, the key methods of truly gaining customers’ trust is thought the provision of reliable services, with affordable options, all while maintaining a positive brand image. When it comes to providing new, and innovative solutions or services, it is imperative to address customer needs swiftly, on a personalized level, backed by honest communication, and ensuring their data and personal data is above all protected. 

In what areas do you think we will see the fastest innovation applied to mainstream services? Retail? Commercial? SME? Private Banking? And why?

While this varies by region, retail does inevitably take on the largest responsibility when it comes to innovation.

Undoubtedly, the shift towards consumer banking by Big Tech’s at the likes of Amazon, Apple, and Google, has become far more pronounced recently, and these giants enjoy higher levels of access at a much larger scale. 

In the region, we have been witnessing heightened attention towards SMEs, possibly in part of to the government incentives for this segment. Beyond this, there is a random mix of a variety innovative products available across mainstreams and segments starting with payments, fund transfers, personal finance, and traditional deposits or savings accounts; all the way to insurance and wealth management, and many more.

Join Maisa J. Shunnar and her peers in charge of innovation at financial institutions. Contact Dorota at dorota@efma.com to join the Efma Future Innovation community.

Keywords

Fintech Innovation

Geography

Bahrain

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