The GCC’s banking industry witnessed a revenue growth of seven per cent in 2011, while profits increased by 15 per cent last year, according to a study by the Boston Consulting Group (BCG). Loan loss provisions during the year also fell slightly by two per cent.
However, despite the positive trend, the study found that banks in the region have to improve operating models and process efficiency to cut costs.
“In terms of customer service we still a lot of possibility for improvement,” Reinhold Leichtfuss, senior partner and managing director of BCG’s Dubai office told Gulf Business.
The processes they follow especially need to improve, he said.
“How effective and efficient are these processes? How automated are they? When we observe processes in individual banks, we find that there are a lot of steps that they don’t really need. They should simplify and leave out certain steps,” he added.
According to the study, operating costs of banks in the region rose by ten per cent in 2011. Rising investments are vital and essential because the industry is still growing, said Leichtfuss, but warned that banks should develop more cost efficient systems.
Those banks that want to win market share need to improve their value propositions for different customer segments; exploit the full potential of new technologies; increase sales orientation; and most importantly, become more customer centric, the study said.