Abdullah Al Tuwaijri: Digital banking is in Boubyan’s DNA, and it will be central to achieving Kuwait’s goals for economic growth, social development, environmental sustainability, and responsible trade practices in alignment with UN’s Sustainable Development Goals. Among the most important developments introduced by the Central Bank of Kuwait are regulations to foster innovation in financial technologies and services.

Digital banking is reshaping Kuwait’s banking sector by enhancing operational efficiency, providing innovative financial solutions, and meeting the evolving needs of consumers.

Kuwait enjoys a high adoption rate for digital services today: over 85% of our Islamic banking customers use digital banking and the majority are under the age of 30, demonstrating Boubyan Bank’s leadership in this market segment. Moreover, around 99% of all financial transactions occur on our mobile app, making it the go-to channel for our customers. Our digital banking channels make managing personal finances convenient and accessible for all customers.

Our digital banking leadership makes Boubyan an important partner to Kuwait’s digital banking strategy.

GF: What new technologies provide the best opportunities for Boubyan?

AAT: Boubyan is committed to being Kuwait’s leading Islamic Bank for innovation, and we are excited to introduce AI-backed services to our customers. When we launched Msa3ed (Mosaed), we were the first bank in Kuwait with a digital assistant. We incorporated Msa3ed into Boubyan’s Omnichannel Journey to enhance the customer experience and serve their needs more rapidly.

By continuing to evolve Msa3ed with AI capabilities, Boubyan is innovating our top-tier financial digital solutions and expanding the app’s practical uses. For example, customers can use the app for customized expert services or augmented reality.

Moreover privacy-enhancing technologies protect our customers. Boubyan’s technological and policy development help us to fully realize AI’s potential while ensuring customer privacy and security.

GF: Does Boubyan partner with fintechs in the region?

AAT: Boubyan actively partners with fintechs in a structured and dynamic approach. From a B2B perspective, Boubyan is in partnerships and productive discussions with fintechs globally and regionally to ensure we are acquiring and using the best technology for the bank and providing the most secure services for our customers.

Boubyan also partners with fintechs to integrate their services within Boubyan as well as to provide Boubyan’s services to fintechs and distribute our financial services through fintechs. Boubyan’s services for fintechs span multiple verticals, including accounts and services for payments, cards and lending. 

Boubyan’s primary focus is Kuwait, and our main partnerships are with fintechs operating in Kuwait or looking to enter the Kuwait market. Our existing fintech partnerships include Enabill, Baims, Tap, and Bookeey.

GF: Following the launch of Nomo in 2021, what are the main growth opportunities for Boubyan?

AAT: Boubyan Bank’s successful strategy is based on capturing growth opportunities and scaling up our core businesses domestically and internationally. We have strengthened our international presence by establishing a leading wealth management proposition and entering into unique strategic partnerships within the GCC by activating our Group Wealth Management Plan.

Boubyan is continuously exploring growth opportunities and is now focused on our “Boubyan 2028” five-year strategic plan. In alignment with the bank’s vision and mission, the goals of Boubyan 2028 are to grow and strengthen our existing local and international presence and diversify products and services, all while operating efficiently and according to our ESG principles. We will continue scaling our core businesses and Boubyan Group products in addition to exploring strategic partnerships to continue our strong growth momentum.

Being a pioneer seems to be in Converse Bank’s DNA. It has consistently applied best practices across its operations, creating business processes informed by knowledge and customer experience. In particular, technology has been a key focus, with regular updates to mobile applications, automation of the back office and the development of a call centre.

“We have always been at the forefront of innovation in the banking sector, introducing groundbreaking solutions that have significantly impacted our development,” said Andranik Grigoryan, Converse Bank’s chief executive officer.

Converse Points has been a good example of this. Introduced more than a decade ago to promote non-cash transactions, it is now the longest-standing customer incentive project in Armenian banking, allowing customers to collect points for non-cash transactions and exchange them for gifts.

Other notable initiatives include the mConverse mobile app for individuals, and mobile and electronic card services for legal entities.

“With a flexible approach, modern services and transparent customer interactions, we are a reliable partner for businesses and individuals,” Grigoryan added.

Inevitably, as a relatively young bank, digitisation is central to the strategy. And according to Grigoryan, this is driven by customer expectations. “They demand the creation, development and implementation of digital tools that simplify their lives, provide quality services effortlessly and allow them to manage their finances without visiting a bank branch.”

For instance, Converse Bank recently introduced biometric identification and account opening options through its mobile app, enhancing security and convenience. Other new digital tools offer the ability to change PIN codes and make card-to-cash transactions without a physical card via online banking.

For businesses, meanwhile, digital platforms, products and services have been implemented to enhance the efficiency of the bank’s operations for these customers.

To deliver such services requires various solutions and tools to meet the needs of the market. With this in mind, one of Converse Bank’s main current projects is digitising lines of credit and creating a digital archive.

This initiative will also serve as a blueprint for automating other bank processes in the future – in turn accelerating business operations, saving time for customers and delivering quality services in a timely manner.

At the same time, greater automation will support more objective decision-making and cybersecurity. “As a result, customers will soon be able to conduct their banking activities entirely through mobile banking, eliminating the need to visit a physical branch,” explained Grigoryan.

Business customers are also able to leverage a currency conversion platform, with preferential rates across roughly 35 currency pairs at the moment, and plans to expand the functions over time to include more financial market tools.

In sync with its digital ambition, mobile banking remains a key part of Converse Bank’s agenda.

The main features of its mobile platform include access to accounts, cards, loans, investments, transfers and payments, ensuring all essential banking services are available to customers on the go. “It’s important for us that all basic banking services are presented and accessible in mobile,” added Grigoryan.

The mobile app also allows customers to subscribe to various banking services without visiting a branch, such as opening accounts, ordering cards and accessing services on special terms.

At the same time, there is a strong commitment to the ongoing development of these tools, driven by user feedback. This is reflected in regular updates, with a completely updated and more comprehensive mobile banking app soon to be rolled out, to further enhance the customer experience.

This next phase of mobile banking highlights the desire to continue innovating as part of a broader digital journey.

“Our goal is to provide a comprehensive suite of online banking services that are user-friendly and meet the diverse needs of our customers,” explained Grigoryan.

Plans include further automation of business processes to enhance efficiency, and the delivery of high-quality advice through digital platforms – all within a safe and inclusive environment for users.

Ultimately, Converse Bank’s branches will only be needed to give customers technical support. “Our vision is to become a trusted friend, partner and advisor to our customers in all their financial matters, providing them with the convenience of conducting most banking activities online,” said Grigoryan.

Financial institutions have been facing tough challenges between economic uncertainty and an unprecedented technology-powered speed of change, especially since the Spring Bank Run of 2023.

Banks are now prioritizing four key areas: liquidity management with a balanced portfolio view including commercial real estate (CRE), enterprise protection with anti-fraud
and cybersecurity, operational resiliency and sustainability with climate risk and green products. Overall, balanced risk management is the ultimate goal for banks.

Addressing these risks will make institutions more resilient, deliver services efficiently and build stickiness with customers. But this requires, artificial intelligence (AI) to connect the dots from the decades of accumulated data and reimagine business processes. By becoming an AI-first financial institution, they can navigate challenges and become a trusted orchestrator of the economy by exploring innovative business models with open finance across the ecosystem.

Advancements in AI and generative AI have significantly influenced institutions like JP Morgan that leverage these technologies to enhance their digital, data and cloud infrastructure. Generative AI finds diverse applications, from streamlining software development and managing adverse media (Deutsche Bank) to analyzing Federal Reserve speeches and detecting fraud (JPMorgan), and even offering personalized financial advice and recommendations (Morgan Stanley).

Almost 25% of American financial institutions already use business value generating solutions, with generative AI spending up 67% from 2023 to 2024. While only some institutions have made early investments, going AI-first is an imperative for growth and efficiency. It also has a direct bearing on all connected stakeholders – enabling faster, smarter customer decisions, amplifying employee potential, and distributing higher capital to low-risk shareholders.

But, what does an AI-first financial institution look like?

An AI-first financial institutions fully leverages data and AI to automate tasks, streamline workflows, enhance products and services, and differentiate against peers with utmost efficiency and ethical decision-making. A value-based approach can leverage the existing power of digital and cloud to evolve quickly with complete transparency and auditability. This is especially important with changing expectations of the stakeholders, such as customers, regulator, shareholders, and broader communities.

1. AI-first foundation: An AI-first institution excels in handling and interpreting data volumes. Laying the foundation becomes critical. This includes modernizing technology, infrastructure, and AI operations; managing talent and change; and making the enterprise data-ready for AI.

Yet, executives say their primary challenge is unusable data. Institutions must first establish an effective data estate, ensuring data assets are available, accessible, discoverable, and of high quality.

Equipped with customer data, institutions use AI to develop a 360-degree customer view to understand their needs and preferences, and shape business strategies that in- turn provide insights on customers. Data availability for downstream processes instantly leads to quicker user interactions, faster decision-making, and predictive policies.

2. AI-first core: It supports back and middle office operations, including credit scoring, regulatory compliance, customer service, and fraud detection.
AI integration across operations drives efficiency and ‘autonomous automation’ — from complex task execution to project management. AI algorithms identify improvement areas, optimize resource allocation, and rationalize processes, enhancing operational decision-making. AI’s capability in scenario modelling provides leaders with predictive and data- driven insights for planning and decision-making.

AI offers capabilities to assess credit, market, and operational risks. AI-driven systems are adept at tracking regulatory changes, seamlessly integrating compliance into operational decisions to avoid fines. AI scrutinizes customer data to better assess creditworthiness, minimizing default risks. AI’s internal process evaluation and predictive maintenance mitigate operational risks, forecasting system issues for pre-emptive action. In the case of risks relating to CRE, AI can act on the historical and real-time structured and unstructured data to create “what if” scenarios. This can help institutions identify concentration risk earlier and determine actions for loan diversification. This strengthens financial institutions’ resiliency and security.

3. AI-first growth: It augments front-office operations by personalizing sales and marketing at scale, deepening client relationships, and improving portfolio management and product design.

Generative AI can improve the productivity of contact center representatives by answering customer queries quicker and accurately. For example, Discover Financial Services is using generative AI at its contact center to answer customer queries quickly.

AI’s ability to analyze and interpret customer data is key to offering tailored financial services and products. AI-analyzed customer feedback and market trends help create innovative financial products and continuously improve services. Morgan Stanley, for instance, is using generative AI to help its 10,000+ financial advisors answer investor queries on personalized financial advice and recommendations.

AI-based products can use synthetic customers — human- like avatars with personality and knowledge —to interact with prospects. These avatars, based on design personas, possess a story, goal, and unique relationship with the bank, leveraging factual knowledge and personality traits of the customer base (current or intended).

Synthetic customers help create tailored proposals for each customer and demonstrate value that aligns with customers’ specific needs. It helps employees learn about product features, benefits, and services, and answer customer questions accurately and confidently.

While AI can potentially re-engineer each function and business segment, institutions must consider privacy, security, and ethical implications. Responsible design principles should guide AI integration, with human oversight in high-risk use cases. This will help financial institutions achieve higher margins, create new revenue streams, design better products, and become more productive.

Lastly, talent is key. To be truly an AI-first financial institution, the culture around embracing AI and future innovations needs to be encouraged across organizations. Since this AI era demands diverse skill sets, training and adapting resources for effective collaboration with AI systems are necessary. There will be focus on conflict resolution, trust-building, and machine “unlearning”. New roles will emerge, keeping pace with AI advancements. AI fosters a culture of continuous learning and adaptability, making institutions agile and adaptable to future advances as this new era unfolds.

The core functions have not changed, but how those functions are performed and the additional value that can be added around them, is continually evolving. By adopting new enabling technologies and digitising processes, treasurers can improve automation, efficiency, and accuracy, while reducing risk and enhancing the role of treasury as a strategic partner to the business.

Abu Dhabi Commercial Bank (ADCB) is leading the way in the UAE in leveraging technology to deliver broader, more responsive, and more strategic solutions that enable corporate treasury functions to meet the growing expectations of their clients.

ADCB is working with multiple treasurers who are upgrading their treasury management system (TMS) and Enterprise Resource Planning system (ERP) to support connectivity, for example, including the use of APIs and Swift to drive automation, as well as enabling information to be shared on a near-to-real-time basis, and providing automated reporting that supports streamlined reconciliation. Similarly, its digital supply chain platform enables seamless, paperless transactions between all parties, helping to facilitate liquidity management, aid cash forecasting and optimise conversion cycles; while the bank’s liquidity management solution enables it to tailor effective structures to support centralising cash positions through automation.

The solution provides 24/7 online access to a consolidated cash position and tools to empower treasurers in managing their liquidity either locally or globally in a fully automated and seamless manner. It provides a consolidated overview of companies’ structures and balances across all accounts, enabling treasurers to control budgets across subsidiaries, change sweep types according to needs and access customisable dashboards in a single click.

A case in point is its work with a client that included seven different business verticals with over 100 accounts overseen by a central treasury function.

Key challenges faced by the client were the overall visibility of daily cash management and working capital needs at the group level. Enormous time and effort were being spent on reconciling multiple accounts across different verticals and subsidiaries. The cash surplus was not being efficiently optimised and was only sporadically centralised at head office.

ADCB’s team invested considerable time working with the client to understand its reconciliation operations and pain points. As a result, the solution implemented combines different products and customised reports that automate the client’s operations across the seven business verticals, providing full visibility and control at head office, while maintaining the subsidiaries’ autonomy for collections and payments processing. The solution comprises multi-level two way sweeping, daily budgets at business vertical level, end-of-day cash concentration to treasury head office, host-to-host and customised reporting with different frequencies auto-mapped to the client’s ERP for auto-reconciliation and dashboards.

Developments in the payments sector have also progressed at a rapid pace over the last decade. The need to enable a real-time or near-real-time, multi-currency, 24/7 payments capability is a growing focus for treasurers looking to optimise cash flow. From a consumer perspective, the main drivers are convenience and speed – expectations that are increasingly prevalent in the corporate space, where the need for fast, constant access to data is becoming the norm. As such, banks are having to continuously adapt to keep up with the growing demands.

Here, too, ADCB has enhanced its payments landscape through its continual investments in digital systems and channels. Its flagship ProCash platform provides a highly reliable and secure online banking cash management solution. It enables companies to initiate, reconcile and manage multiple types of payments, providing an exceptional level of customisation to meet specific needs. Through ProCash, more than 90% of transactions achieve straight through processing (STP), without the need for any manual intervention. The platform also provides real-time full visibility of the payment lifecycle using Swift GPI integration. Swift is also helping to simplify treasury and cash management processes. This reduces the risk of errors while providing global reach, enabling companies to manage their financial transactions and accounts with enhanced visibility and security.

Working with a banking partner with a strong track record of digital innovation and client focus is essential if corporate treasury functions are to fulfil their potential as valued, strategic business in this fast-digitalising world.

With its reputation as one the Middle East’s most innovative banks, ADCB is well placed to provide the solutions, systems and support that enable corporate treasury functions to achieve their objectives and build long-term success.

Sponsored by:

Banks across North America, Europe, and Asia Pacific were asked how they approached digital transformation amid cost optimization. Over half (52%) of the senior technology executives identified artificial intelligence (AI) and machine learning (ML) as one of their top investment priorities over the next 12 months. Other key investment areas for digital transformation include legacy transformation, end-to-end process digitization, and data and analytics. Importantly, over 60% of executives reported significant success in modernizing inefficient tech infrastructure through their cost optimization strategy. Additionally, 47% said increased automation and personalized customer service were major benefits.

Despite the wide benefits of cost optimization initiatives, these efforts at banks remain inconsistent with limited results. We asked our survey respondents about the barriers to sustained cost optimization initiatives at their banks – and as we explored these, three key challenges stood out.

Cost inefficiencies often stem from complex legacy systems in established banks. As banks grow, new systems are added without removing existing ones, leading to further complexity. Subsequent cost transformation efforts are often isolated away from the necessary. With the right expertise, leaders can commit to consistent and complete transformation to help break the pattern of compounding complexity for their bank – and fully optimize costs.

Cost optimization can be a moving target, with shifting goals and timelines – impacted by changes in the macroeconomic environment. This can become a burden, especially in times of strong growth. Simplifying existing processes, transforming the operating model with cloud and AI to ensure resilience and agility are crucial for sustainable cost optimization.

Banks are amongst the oldest institutions of our society and the industry is at an inflection point, with a clear need to move away from the traditional short-term, profit-driven model. Embedding cost optimization and transformation strategy across all operational areas supports long-term competitiveness.

The focus of cost optimization is usually more fixed on “cost” as a key measure. An honest discussion teams need to have at the onset of cost optimization efforts is about the valued benefits of change – and the necessary cultural transformation. Getting the right industry perspective is incredibly useful – to help ensure more complete understanding of the measurable ROI of transformation.

Optimization often leads to efficiencies that improve employee experience and productivity, empowering them to achieve more for their customers. This goes beyond better aligning the products and services the bank offers. It’s about access to the right information, enabling the bank to provide timely support when customers need these insights to make better decisions and enhance their overall financial wellbeing.

As industry disruption escalates, banks are discarding piecemeal, siloed, and fragmented approaches. Our survey results show that they must also prioritize cost transformation, as they plan for growth. A committed, structured approach, supported by trusted partners who bring specific expertise working with financial services leaders, will enable banks to rapidly realize exponential returns from cost optimization. Teams can then move forward with agility, fully leveraging AI and emerging technologies to deliver differentiating products and services, ensuring banks remain progressive and competitive in the present and future.

The Infosys report, ‘Banking on continuous improvement,’ includes data from the referenced survey along with further insights.

Thank you. BAWAG has a long and rich history of over 140 years dating back to 1883 with its foundation firmly rooted in Austria. Today, we are headquartered in Vienna, Austria and serve 2.1 million retail, small business, corporate, real estate and public sector customers across Austria, Germany, Switzerland, Netherlands, Western Europe and the United States. Our goal is to deliver simple, transparent, and affordable financial products and services that our customers need. We launched a strategic transformation in 2012, took the company public in 2017, and today, BAWAG ranks among the most profitable and efficient banks in Europe. This transformation over the past decade is the foundation which has allowed us to plant the seeds for growth in the coming years.

In 2023, BAWAG delivered another year of record results…

That’s true, 2023 was another record year for BAWAG Group: We delivered a net profit of €683 million, a return on tangible common equity (ROTCE) of 25% and a cost-to-income ratio of 31.8%. Since our IPO in October 2017, we have delivered a total shareholder return of 67% and outperformed the two largest and most representative European bank indices by an average of 31 percentage points (as of Q1’24). We have grown earnings per share from €4.50 in 2017 to €8.31 in 2023, representing a CAGR of 9%. However, despite our record performance in 2023, our best years are still ahead.

Our strategy has been consistent throughout. Our 3 strategic pillars have guided our transformation over the past decade and will guide us over the coming years.

Pillar 1: We want to grow in our core markets by serving our customers with simple, transparent and affordable financial products and services.

Pillar 2: We drive efficiency through investments, simplification, and operational excellence.

Pillar 3: We maintain a safe and secure risk profile.

We are focused on the developed and mature markets of the DACH/NL region with a primary focus on retail & SME banking. Our focus has, and will always be, on execution and doing our best to consistently deliver results for all stakeholders. We are a patient and disciplined commercial lender with no investment banking, trading or capital markets business.  Patience and discipline require thinking beyond the immediate quarter, which is not always obvious or understood. However, we are rewarded over the long term when unique opportunities present themselves and we have the capital and liquidity to take advantage of such opportunities.

Disciplined capital allocation and M&A in specific is key to our strategy and how we run the bank.  Underpinning our capital distribution plans is our strong profitability, which allows us to accrete significant amounts of capital each year. We then use this capital to invest in our franchise and teams, extend credit to our customers, acquire businesses, and distribute to our shareholders. By saying that we aim to be good stewards of capital, we mean that we want to make sure we are prudent in our capital distribution plans, maintain our fortress balance sheet, and be ready to capitalize on unique opportunities. Since our IPO in 2017, we have extended €47 billion of credit to our customers, supporting our customers while growing the franchise and self-funded 9 acquisitions. We delivered a progressive dividend, starting with €0.60 per share in 2017 to €5.00 per share in 2023. In total we have distributed €19.70 per share in dividends, equal to € 1.7 billion, in addition to completing € 900 million of share buybacks, allowing us to reduce our overall share capital by over 21% since our IPO.

We are living in one of the most dynamic and transformative periods of banking. The years ahead will bring about rapid change as the traditional banking model is challenged by new and evolving technologies, changing customer behavior, new methods of engagement, and the embrace of AI across all aspects of our business. The future guarantees only one thing: change. Commercial banking is becoming more commoditized in the way that it enables financial institutions to truly benefit from technology to create seamless processes. Defining core competencies, being laser-focused on a handful of core products and services, maintaining discipline and prudence in lending, and simplifying end-to-end processes across the organization are key to delivering simple, transparent, and affordable financial products our customers need while also ensuring the long-term competitiveness and profitability of the franchise. 

There are two key areas we continue to focus on that we believe drive long-term franchise value to our business, and fundamentally leads to shareholder value. First, we continue to make investments driving growth and efficiency across the business. As an example, we invested approximately €600 million into technology and our branch footprint over the past decade. We are continuously looking at how we remain competitive. The banking landscape continues to change and by investing, we stay at the forefront of emerging trends around customer engagement and delivering quality products and services. And second, we are focused on disciplined growth. We run a multi-brand and multi-channel lending and advisory platform across our core markets. Our history is a mix of organic growth and M&A, and we’ve leveraged this strategy in both situations. We continue to plant seeds in our core markets, which will lead to stable and sustainable profitable growth long into the future.

Today, I am more excited about our future growth opportunities than I have ever been. Our transformation over the past decade has positioned the franchise for long-term profitable growth and has allowed us to pursue several strategic growth opportunities. My colleagues and I could not be prouder of the BAWAG team.  We look forward to delivering on behalf of all stakeholders in the many years to come!

Anas Abuzaakouk has been with BAWAG since 2012. Before becoming Chief Executive Officer and Chairman of the Management Board in 2017, he served as Chief Restructuring Officer and Chief Financial Officer.

Sponsored by:

FORWARD LOOKING STATEMENTS

This article contains “forward-looking statements” regarding the financial condition, results of operations, business plans and future performance of BAWAG Group. Words such as “anticipates,” “believes,” “estimates,” “expects,” “forecasts,” “intends,” “plans,” “projects,” “may,” “will,” “should,” “would,” “could” and other similar expressions are intended to identify these forward-looking statements. These forward-looking statements reflect management’s expectations as of the date hereof and are subject to risks and uncertainties that may cause actual results to differ materially from those projected. These risks and uncertainties include, but are not limited to, economic conditions, the regulatory environment, loan concentrations, vendors, employees, technology, competition, and interest rates. Readers are cautioned not to place undue reliance on the forward-looking statements as actual results may differ materially from the results predicted. Neither BAWAG Group nor any of its affiliates, advisors or representatives shall have any liability whatso-ever (in negligence or otherwise) for any loss howsoever arising from any use of this report or its content or otherwise arising in connection with this document. This report does not constitute an offer or invitation to purchase or subscribe for any securities and neither it nor any part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. This statement is included for the express purpose of invoking “safe harbor provisions”.

The race to stake a claim in Asia Pacific’s e-commerce boom is on. Based on growth forecasts, this is no surprise. The region’s e-commerce market size is estimated to hit US$4.2 trillion in 2024, and then to reach US$6.76 trillion by 2029, reflecting a compounded annual growth rate of 10% during that time.¹

For companies looking to benefit from this surge in consumer demand, creating a commercially viable e-commerce strategy is easier said than done. Partnerships play an increasingly important role as a route to success. “Partnerships can elevate e-commerce businesses across sales, marketing, customer acquisition and retention, especially if businesses use technology and data to support them” explained Terence Yong, Group Head of Sales, Global Transaction Services at DBS.

More specifically, he explained, management should look to leverage existing relationships with financial and other strategic partners to drive e-commerce growth.

Working with banking partners, for example, can enable a company to reach a wider pool of targeted customers directly.

This might be achieved by offering customers a discount on a product or service if they pay for it using the credit card from the partner bank. Such promotional activities can be as broad or targeted as a company wants.

This also offers potential for directing warm leads to a company’s e-commerce business. For example, if a white-goods company is looking to sell products directly to consumers online. They could partner with a bank to tap on their home loan customer base and these new homeowners are warm leads as they are likely be seeking offers on new home appliances.

The results are typically win-win situations – the e-commerce store acquires more consumers, while the bank processes more transactions and is able to offer additional value to its own customers beyond traditional banking services.

Such partnerships can go beyond promotions to embed more integrated strategies to boost activity for both parties. For example, companies can potentially develop an online subscription platform in conjunction with the bank to enable customers to pay for certain goods or services via fixed monthly amounts. In turn, this might give them certain privileges, such as early upgrades, depending on the product.

Levande’s platform, which offers all-in-one appliance subscriptions, has found this type of approach to be effective, especially in a market that has so many messages out there. “To do that, we have to forge partnerships,” said Gaurav Julka, Head of Appliance-as-a-Service for Electrolux in APAC and MEA.

DBS Marketplace is a prime example. “We put our products online so DBS consumers looking for home renovation loans or other services from DBS come on the Marketplace page and can access our products from our own website,” Julka explained.
 

A successful online shopping experience also relies on customers receiving their purchase as swiftly as possible. Without a physical store presence, it is essential for companies to manage the process of delivering the product to the right person, as well as handling any returns efficiently.

This requires reliable partnerships with third party logistics (3PL) firms that specialise in handling end-to-end e-commerce fulfilment. These 3PL players have the ability to manage business inventory, warehousing, taxes and custom duties, and even refunds.

E-commerce fulfilment can create further value for the business in terms of generating insights from the large amounts of transactional data that gets created. Some useful metrics that businesses harness to make smarter business decisions include real-time inventory levels, sales orders, delivery times and purchase-to-refund ratios.  

“This information can also be used by companies to seek better financing terms from banks,” explained  Yong.

In particular, the granularity, precision and real-time nature of the e-commerce data offers lenders a more accurate and holistic picture than traditional merchants can provide. “This also potentially extends to a new source of credit for online merchants,”  Yong added, “where e-commerce platforms can also partner with banks to offer alternative data-led financing for their merchants. JD Logistics achieved this with DBS to provide financing to Hong Kong-based SMEs to fund their cross-border e-commerce import businesses.”

Sustainable e-commerce growth also relies on banking expertise that supports companies which might be selling online for the first time, or want to expand into overseas markets given the borderless opportunities that exist.

For newcomers to e-commerce, they might suddenly start receiving queries and requests from customers in multiple countries. They will need the ability to collect payments in different currencies, as well as pay a variety of merchants and suppliers who could operate in other countries and, therefore, different currencies.

These same companies must also ensure they can access inventory on e-commerce platform providers to sell an aggregated pool of items – either as part of a general resale or on a proprietary basis.

Similar challenges await those companies looking to deepen their e-commerce footprint. In their case, they might need greater capacity to keep up with the growth and complexity in order or payment volumes.

“These needs make it essential for companies to partner with a financial institution which has experience in a specific region, to be able to address potential hurdles around payments and currency regulations that may arise,” said Yong.

That approach can accelerate a firm’s growth. “Building our own capabilities, especially in an asset-heavy industry, can be time-consuming and challenging,” added Wee Hou Kooh, Head of Commercial for Ninja Van. “Forging partnerships with industry experts allows us to tap into the partners’ expertise and we get to leverage their existing infrastructure and latest innovations and technologies without the need to build them ourself.”

Ultimately, whether through acquiring and retaining customers, gathering data-led insights to fuel expansion, or facilitating transactions, aspiring e-commerce leaders cannot underestimate the degree to which success in Asia Pacific will hinge on a mutually beneficial banking partnership.

“E-commerce is multi-faceted. We have worked closely with many companies on a variety of areas to support their growth ambitions,” said Yong.

For businesses large and small with an e-commerce ambition, DBS offers a path to open doors for strategic and profitable growth. The bank has worked closely with many companies to provide solutions ranging from optimising customer payment acceptance, facilitating global collections and settlements, cultivating warm leads to grow business to leveraging e-commerce data to meet future financing needs. Partnering with a bank that has the necessary expertise can lead to smarter decisions and ensure e-commerce success.

(Read more insights in the DBS white paper on ‘Accelerating growth in the age of e-commerce’ here)

Sponsored by: