Emirates NBD, an almost perfect digital transformation

An increase in mobile penetration rate and connectivity speed in the emerging markets and the Middle East specifically has opened the road for disruption in several industries. Big players long advantaged not only by years of experience but also by strong state connections and lack of competition, can no longer rest on their laurels.

When it comes to banks, new players have benefited from advancements in Artificial Intelligence and smart bots to disrupt incumbents and offer similar services at a lower cost and higher convenience to consumers. What is called fintech seriously threatened the incumbents that found themselves rushing to win the digital race before consumers leave them. Retail banks in the region which offer basic services were the most apt to disruption. The services provided by those institutions could be easily simplified and automated. Whole processes that traditionally required a physical visit to the brick and mortar branch could be completely automated for the most and fully integrated online using mobile phones, tablets, and wearables. Not needing to get into a car, get stuck in traffic, find a parking, and get stuck in traffic again seemed like a great value proposition for consumers by its own. Add on top of this the promise of a seamless, speedy, secure, and self-driven service and you have a competition to be feared.

In the UAE with a 92% internet penetration rate, 80% of consumers expect today to be able to have an exhaustive online banking experience according to a study conducted by Mckinsey. As such incumbents rolled up their sleeves (a bit late) and put in place digital strategies. A leader in the field is the Emirates NBD bank that committed in October 2017 billion Dirhams for a digital transformation strategy. The digital strategy’s aims is to “offer a seamless and enhanced customer experience” and was based on five pillars: “end-to-end process transformation, smoother faster and more responsive customer interface, omnichannel experience, fortification of cyber security and anti-fraud capabilities, and enhancement data management and analytics”. The goal was to optimize both the back-end (internal work) and front-end processes, for an efficient and fast back-end system is a prerequisite for an efficient and fast front-end delivery. With more decentralization, and as more data becomes in the end users hands on their mobile phones, the risk of cyber attacks increases. As such it was very important to enhance cyber security and anti-fraud capabilities. With such a strategy in place, the bank was able to roll out innovative and secure products with a great value proposition. For example FaceBanking was created. It is a video banking portal that connect customers with bank advisors 24/7. The bank also launched products tailored for millennial such as Liv. A future lab was created also to invest in startups and act as an accelerator. This will allow the bank to stay close to talent and breakthroughs.

Whilst this strategy is very solid and is covering most of the elements of a successful digital transformation a key aspect was overlooked: internal culture and talent. Whilst the digital lab allowed the bank to stay close to talent it doesn’t nurture talent from within. Talent could be transferred but a careful strategy should be put in place to benefit from that proximity and attract talent. The bank did indeed struggle from this gap in the strategy. In fact, with the old culture of risk aversion, employees were reluctant to take risks thus limiting innovation. When facing agile startups that are by definition risk takers, an incumbent should work to artificially change the culture at the beginning until agility becomes the norms. Besides risk aversion of employees, managers were also very short sighted. For example, as they were trained to always care about profitability and the bottom line they would be reluctant to invest in technologies/projects that had only negative impact on the bottom line. Although a closer look at those projects would show that indirectly they add a lot of value to customers which indirectly affects bottom line. Some of them could also be critical to maintain profitability in the future. Another related struggle was human capital attraction. Specifically the banks had a hard time attracting top technical talent that would be naturally bond to go work for agile startups or more digital savvy companies. By failing to put in place a solid recruitment strategy the bank was lacking critical relevant talent.

However despite all the challenges mentioned above NBD realized in time the importance of the digital transformation and put in place a solid digital strategy that resulted in innovative products that stopped the competition from stealing customers. At this basic stage the bank was able to deliver with the status quo talent and culture. However, this will not be the case as fintech becomes more sophisticated. As such and in order to prepare to compete in this sophisticated world the bank should focus on a sixth pillar : culture and talent. This pillar should consist of two main sub-points 1) how to change the current culture to an agile and risk taking one and 2) how to attract top technical talent.

Changing those cultural aspects in combination with the strategic shifts should be enough to win a war against new startups as the big banks have an asset that new startups cannot buy nor build fast enough: trust. For no matter how agile the world goes, consumers and human beings will always need trust when it comes to something as important as their wealth.






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Student comments on Emirates NBD, an almost perfect digital transformation

  1. Interesting post Lama! I really appreciated your points regarding the cultural and talent issues that Emirates NBD is facing. Your point about the difficulties of attracting top technical talent reminded me of the GE commercials that watched in class earlier this semester:


    It sounds like NBD faces a very similar struggle to that of GE: convincing young talent that a seemingly “old” company can operate at the forefront of digital transformation. I wonder if NBD could start by hosting competitions at some top regional universities in which they ask students to pitch ideas for some of the most technically interesting problems that the company is working on. It could be an easy way to get some face time with talented students and show off the fascinating work that they’re doing. In addition to helping to rebrand the company and recruit talent, these competitions could be a valuable way to crowdsource innovative ideas.

    Regarding internal culture, it seems like NBD needs to embrace more of a “test and learn” and “fail fast” mentality. This new attitude needs to be championed by company leaders. They should begin presenting awards with a name like “Boundary Pusher” to employees who have come up with ambitious ideas and led efforts to test them. Most importantly, these awards must be given even if the result is a failure to demonstrate an understanding that the future of the company will be predicated on the team’s ability to be bold and take risks.

    1. Interesting comment PD. I like your analogy to GE, as Emirates NBD is internally very resistant to change. The BSSE theory of disruption does tell us that it is very hard to change the culture, without changing the resources, processes and priorities. It seems that priorities at the top-level might appear to be changing, but it is at the middle- and lower- level that EmiratesNBD needs buy-in. The business model would need to change. I do believe that the business model is what makes it the hardest to change here. If you look at how Emirates NBD is organized, different units operate as profit-centers, and that makes them very reluctant to implement the changes that will disrupt their profitability – especially if their jobs are on the line. As you correctly pointed out, there is a lot to turn from the GE case.

      Nevertheless, according to the theory, the best way for Emirates NBD is to disrupt itself by creating a separate unit that will disrupt it internally – similar to how Netflix disrupted its DVD delivery model.

  2. Interesting blog post Lama. I also appreciated your points on the importance to change the internal culture and attract talent, to instigate changes and for Emirates NBD to embrace the opportunities that lie ahead through digital innovation.

    Nonetheless, I would be interested in your opinion as to where Emirates NBD has truly prioritized digitization or is it a marketing ploy? Is the 1billion dirham invested in the right places? What has been the internal response?

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