Retail banking in Lebanon needs to stay abreast of new technologies to maintain growth, experts at a banking summit held at the Radisson Blu Martinez Hotel advised Monday.
“Retail banking was not highly affected by the economic slowdown because we live in a consumer society,” Philippe El Hajj, deputy general manager and head of the retail and banking division at Fransabank, told The Daily Star. “People want to take loans to buy real estate or cars in the absence of proper public means of transportation,” he said on the sidelines of the summit, which was organized by Efma.
Retail banking is the provision of services by a bank to individual consumers rather than to companies, corporations or other banks. Services offered include savings and transactional accounts, mortgages, personal loans, debit cards and credit cards.
Hajj said retail banking in Lebanon had grown significantly over the past five to seven years to constitute around 50 percent of the operations in the balance sheets of Lebanese banks.
“Consumer loans in Lebanon have been spreading during the past 10 years,” he added. “This is why we have a lot of bank branches and alternative channels of distribution.”
Hajj’s comments were echoed by BLOM Bank’s general manager Elias Aractingi, who said retail banking had grown to a reasonable level over the past few years despite the economic slowdown in Lebanon.
Aractingi attributed the growth in retail banking to consumers’ need for retail services.
“We are doing very well in retail compared to other countries in the region,” he said.
Despite the reasonable growth in retail banking, experts emphasized the need to address a few challenges facing this industry in a bid to ensure further growth in the near future.
One of the main challenges facing retail banking, Hajj said, was banks’ ability to integrate technology into their daily operations.
“A key challenge facing banking institutions is the need to adopt new information and communication technologies within the organization in a timely manner [without] disrupting the embedded solutions needed to operate the business,” he added.
“Banks that are able to apply these financial technologies and support new channels using new payment instruments will survive to serve customers from now on,” he added.
Aractingi echoed Hajj by saying that the government had a great role to play in issuing laws and regulations pertaining to the digitization of retail banking operations.
“We should move to digitizing the entire process of opening a bank account, for instance, without the need to go through paper procedures,” he told The Daily Star. “This needs the government’s intervention in allowing digital signatures.”
Hajj believes that digitization would be of a great help in the future but people will need time to adapt to this new trend.
“Digitization would help for sure but we cannot forget that we are a human-based market so it will take more time to adapt to this new trend in Lebanon than in other markets,” he said.
Experts also underlined the importance of innovation in retaining retail clients. “Banks should be innovative in order to be able to deal with an uncertain future,” Hajj said.
His comments were shared by Grace Eid, the head of retail banking at Bank Audi who said that lenders should be able to issue new products in a bid to retain their clients.
She added that retaining customers at an average of one addition per month translated to an annual growth increase of 3 percent.
“Increasing customer loyalty is important to maintaining a good market share,” she said.
By Dana Halawi
