COVID-19 – a springboard for digital transformation
With 2021 came multiple growth opportunities for Al Rajhi Bank as we expedited a digitisation journey that was already in motion. Customers coming out of the pandemic were looking for end-to-end digital solutions that not only provided efficient accessibility, but also helped them better manage financial transactions in an increasingly cashless society. We stepped into the year focused on shifting our digital value proposition from execution to action and insights, and providing the best customer experience by enhancing the value of data with digital intelligence.
On account of COVID 19 and complexity in digitising workflow processes, we faced challenges due to lower-than-expected digital penetration in select lending products, which the digital and IT teams addressed through fast tracking product development. During the year under review, the Bank’s digital and IT teams delivered transformational changes supported by digital infrastructure and a flexible workforce that sustained agility and innovation beyond the pandemic. Some of the key achievements included:
- 9.7 million active digital banking customers for the year under review
- Aggressive 145% YoY growth in digital onboarding with 90% of all retail customer accounts opened during the year opened via digital channels
- Payroll solutions for e-business customers
- A high performing, rapidly evolving mobile ecosystem with both the best-rated retail and business banking mobile apps in the Kingdom
- Delivery and roll out of end-to-end digitised Mortgage and Auto Lease financing solutions
- A 275% increase in assets powered by digitised personal finance products, and a significant increase in liabilities fuelled by non-profit bearing liabilities
During the year under review, Al Rajhi remained the ‘First Choice Bank’ with the leading Net Promoter Score (NPS) in the Kingdom, improving its digital NPS by providing a superior customer experience underpinned by elevated digital capabilities.
Unlocking the full potential of digital in Retail Banking
2021 saw a significant increase in the Bank’s digitally active customers to 9.7 million, making more than 80% of the Bank’s total active customer base. Digital channels contributed significantly to key businesses; 85% of all remittance transactions and 83% of SADAD payments were executed via digital channels, while 80% of all cards issued by the Bank were also applied for via digital channels. The migration reflected robust YoY growth of 175% in e-commerce transactions, 125% increase in card issuance and 23% in marketplace transactions.
A number of financing products and services were digitised during the year under review including the complete request-to-execution functionality of Watani 2 and Watani 3 personal finance lending products. The instant approval feature was rolled out for personal finance and revolving credit cards, greatly contributing to online transaction efficiencies. End-to-end mortgage solutions for off-plan requests, auto financing solutions including a balloon financing product were launched online.
Opening of future accounts and minor accounts were enabled as well as additional accounts in multiple currencies for existing customers. Applications for digital cards, cashback cards, debit cards, revolving cards and Riyadh Season prepaid cards were made available online. We also enabled host-to-host transfer for high-volume corridor partners, diverse insurance, savings and protection products, launched a digital gold wallet to enable gold trading over the app and also allowed users to open mutual fund investment accounts online. Adding to the ease and convenience the split payment option enabled requests for sharing of payments while the native experience of accruing and redemption of loyalty points enhance the customer engagement and experience. We introduced mobile PIN (mPIN) as an authentication method for convenient access, with 50% of the current logins utilising mPIN and biometric authentication.
Balancing innovation, regulation and risk in the shift towards high-speed transactions, Al Rajhi Bank rolled out the ‘One Minute Approach’ to enable end-to-end transactions and services within one minute. Credit cards, digital wallets and the Bank’s flagship Watani 1 product were among the first to go live with the near-instantaneous one-minute approach, while the agility upgrade for Watani 2 and Watani 3 as well as Takaful Protection and Savings products, Mortgage Top-Ups, Emkan Products and a few Refinance options are currently in development.
Establishing our position as an enabler of the Kingdom’s Vision 2030, a number of developments under the Open Banking initiative were tested and reviewed in 2021 to enable secure interoperability between Al Rajhi and other financial and third party service providers through retail as well as e-business platforms. Under the same mandate, the Bank also remained persistent in developing and going live with a number of key services under its branchless banking initiative. The digitisation of the Bank’s contact centre also continued during the year with 13 key services identified for digitisation.
Digitising the Corporate Banking value chain
The year under review recorded a significant increase in new e-Business accounts opened online, 83% of all accounts opened during the year, a 58% YoY growth. The number of digitally active customers increased to more than half of all active corporate and SME customers. The Bank launched prepaid cards and a pilot offering of Point of Sale (PoS) financing in 2021, with financing products for e-Business customers currently in development.
Cost and resource optimisation
The Bank continued to conduct self-evaluations and leverage existing tools, technologies and systems to provide optimum business solutions, while also upgrading technology infrastructure with API improvements and issuance of digital certificates. This prudent approach to managing and optimising resources resulted in the improvement of the cost to income ratio for the Bank.
As a result of COVID-19 restrictions and safety protocols, the Bank faced logistical issues when onboarding new team members as well as resources present outside KSA facing travel restrictions. By carefully identifying the most crucial skill gaps we needed to bridge, we hired a number of highly proficient new team members while also enhancing the Bank’s institutional knowledge.
International recognition for digital excellence
Our expedited digital journey during the COVID-19 pandemic and our continued efforts saw us win 13 regional and global awards during the year under review:
- Best Digital Bank in KSA 2021 at the Global Banking & Finance Awards
- Digital Banking Initiative of the Year and Mobile Banking & Payment Initiative of the Year at the Asian Banking and Finance Awards
- Best Digital Transformation Bank at the Global Business Outlook Awards
- Best Mobile Banking Application and Best Digital Bank at the International Finance Awards
- Best Online Banking Saudi Arabia and Best Mobile Banking App Saudi Arabia at the International Business Magazine Awards
- Best Digital Banking Solutions Provider by the Banking Tech Awards
- Digital Banking Experience of the Year at the Seamless Awards 2021
- Best Digital Banking Initiative at the Digital Banker Awards
- Best Mobile Banking Service Implementation – Saudi Arabia and Best Online Banking Service – Saudi Arabia at the MEA Finance Awards
The BOTF strategy to transform technology and become the Best Digital Bank by 2023 will move us from our position as a Digital Challenger to a Global Digital Leaders. Our digital strategy will continue to nurture an Ecosystem with the best customer experience through tailored journeys and future-proof digital financial solutions at competitive prices. With over 1.9 million new active digital customers in 2021, the bank will continue to increase active users by 2023 with an endeavour to continuously improve customer journeys, focusing on the Voice of the Customer, continuous regional and global benchmarking, new technical enablers and benchmarked talent. For Corporate Banking customers, our 2022 e-Business roadmap includes a Business Hub that aims to introduce new services provided by third parties as part of Al Rajhi’s digital offering.
We are also steadily repositioning our marketing approach for digital, focusing on messaging, creativity, partnerships and technology for both retail and business segments to support the new ecosystem.