Strategic Direction

In the years leading up to 2020, “Back to Basics” proved to be a winning strategy and right for the times.

The “ABCDE – Back to Basics” strategy (2016 – 2020)

Al Rajhi Bank’s strong result in 2020 is the outcome of a solid foundation built upon the Bank’s “ABCDE – Back to Basics strategy”. Launched in 2016, the strategy was designed to enhance regulator confidence, improve controls, engender prudent growth, establish a strong stake in digital banking and create better value for its stakeholders. The Bank posted robust growth in its core retail banking franchise with a doubling of its share price over the past five years and a market leading financial performance in KSA. Its strong balance sheet is well provisioned and the brand is powerful; backed by a broad distribution network and improved digital sales and service capabilities. During the year under review, the Bank’s net promoter score (NPS) increased to nearly 66%, while its employee engagement index rose from 66% in 2019 to 70% in 2020. In addition, the Bank’s active customer penetration in its digital application reached nearly 86%.

The Changing Environment in KSA

The backdrop to these achievements was a rapidly changing environment. Key challenges that the Bank navigated during the year under review include new regulations; which the Bank welcomed and was well prepared for, continued reductions in the Saudi Arabian Interbank Offered Rate (SAIBOR); evolving competition and impacts of COVID-19. Pandemic related restrictions began in the Kingdom from early March 2020; including curfews and work from home requirements. During that time the Bank took all necessary measures to safeguard customers and employees but at the same time sustaining business operations and high levels of customer service. This was made possible by the Bank having the necessary infrastructure already in place to migrate seamlessly to remote working for many of its employees, together with extensive on-line sales and service capabilities for customers.

While mergers and acquisitions used to be uncommon in the Kingdom’s banking market, there is now increased M&A activity taking place both within Saudi Arabia and in the wider Gulf Cooperation Council (GCC) region. Non-banking players and foreign banks, which are looking to set up branches within Saudi Arabia, are already providing the Kingdom with an increasing range of digital offerings. The Saudi Central Bank (SAMA) is encouraging digital innovation and the move to a cashless society. This provides many opportunities for a bank such as Al Rajhi Bank which is already contributing towards financial inclusion in line with Vision 2030. With social restrictions imposed during the year under review, the Bank’s digital infrastructure was tested and proved to be up to the challenge with a record 7.9 Mn. active digital users in 2020 and a digital-to-manual ratio of 83:17.

Vision 2030 is providing significant growth opportunities across the Kingdom as the move from public to private sector gathers pace; bringing with it significant opportunities for growth in financial services. The government has indicated that the Public Investment Fund (PIF) will increase CAPEX investment in the Saudi economy through mega-projects, the issuance of Sukuks and by accelerating privatisation of government entities. The government’s Financial Sector Development Program (FSDP), which contributes towards Vision 2030, is designed to allow financial institutions to support private sector growth without compromising stability. Business groups across the Bank will be looking to make the most of this increased focus on the private sector by expanding their range of solutions beyond traditional transactional banking services. The increasing penetration of banks, greater demand for housing and better credit reporting within the Kingdom allow for strong credit growth potential for both the retail and SME customer segments. Meanwhile, government investments are opening up opportunities for the corporate banking sector and the growing Sukuk market is providing greater opportunities for Treasury services.

Al Rajhi’s success in executing the “Back to Basics” strategy over the past five years is evidence that it can take on and successfully execute an ambitious agenda over an extended period – regardless of the challenges in the operating environment. This success gives the Bank confidence to face the challenges and opportunities ahead.

The new BOTF strategy is designed to ensure that it remains future-ready in terms of its business and stakeholder groups, as it continues to focus on providing market leading customer experience.

The new Bank of the Future Strategy (BOTF) (2021-2023)

In the face of the changes in the market, the Bank is adopting a new strategy to guide it through the 2021-2023 planning period. This strategy is designed to help the Bank to realise its stated vision to become “The Bank of the Future”.

By successfully executing the BOTF strategy, the Bank sees strong prospects for continued profitable growth through two key areas. Firstly, through protecting the Bank’s core retail franchise – where it will focus on transitioning from Public to Private sector while continuing to build on market leading digital capabilities as it continues to pivot from physical to digital delivery.

Secondly, it will participate in new growth opportunities; expanding in sectors where the Bank has some existing but under developed capabilities and currently has smaller market shares. These growth opportunities include Private Banking, Bancassurance, Corporate Banking, Small Business Banking and the new Emkan Finance Company. These sectors are growing significantly, and the Bank is already making good progress in building new capabilities to profitably grow its share.

As the Kingdom forges ahead towards achieving Vision 2030 the Bank already has the basics in place. Al Rajhi Bank is well positioned to take advantage of these opportunities given its existing strengths in terms of liquidity, distribution, and talent.

Growth plan and priorities for 2021 to 2023

Build on the core

The Bank will build on the core by building on its existing capabilities in Retail, Corporate and Micro and Small Business Banking and Treasury Products to protect its core franchise.

In Retail Banking the Bank is currently number one for its share in Personal Lending, Auto and Mortgage Lending. It has also moved to the number one position in its consumer mobile banking capabilities. The Bank continues to invest in these capabilities and build on its already strong brand and customer engagement.

In Corporate Banking, where the Bank is currently ranked eighth in the market, the focus will be on deepening selected customer relationships in target industries with specific names. While Saudi Arabia's corporate banking market is sizeable, the Bank has maintained healthy profitability levels thanks to low cost funds, low cost of risk and low operating expenses. The Bank will also build on its Treasury investment book to improve its yield and maturity profile.

SMEs have traditionally found it difficult to secure bank financing. Al Rajhi Bank is looking to capitalise on its distribution strength and create the leading offer for this segment by providing more convenient and efficient banking services for this customer segment through automation to speed up decision and delivery timelines.

Deepening its presence in the Small and Medium Enterprise segment and taking advantage of the growth in this sector will be another important focus area.

To expand its reach in consumer lending the Bank is also increasing its focus on Private Sector employees and Mortgages, by working to increase its share in non-Real Estate Development Fund (REDF) lending. Additionally, the Bank will be working to meet more of their Affluent customer’s Bank Assurance needs as the Saudi market matures. The Bank’s digital capabilities continue to expand in both sales and service with the online migration of current account opening and the full range of Watani personal lending products and mortgage applications.

Outperform the market

The Bank aims to lead the market in the areas of customer experience, employee engagement and regulatory conduct. Creating value for all stakeholders including its regulators, shareholders, employees, customers and business partners will continue to be a priority. Each business line will aim to lead the market in their chosen area with a strategy to do so clearly laid out for all employees with individual KPIs aligned with department goals.

Employee recruitment, training and development, engagement and retention will continue to be a priority to ensure that the Bank’s people continue to be ready to meet the challenges of the changing operating environment. To execute this strategy, Al Rajhi Bank continues to invest in its people with a focus on building the right capabilities while enhancing and modernising its IT infrastructure and streamlining processes.

The Bank will continue to diligently ensure that its people receive the awareness and training required to be compliant with both the letter and the spirit of all regulatory requirements.

Transform technology

Al Rajhi Bank will build resilience and a platform for innovation through a continued focus on modernising technology, leadership in data driven insights and agile working. The Bank will also look to support the growth of its digital banking offering by continuing to upgrade and modernise its critical infrastructure. Customers increasingly turn to digital options in all areas of their day-to-day lives, from shopping to working and staying in touch with family and friends. They will expect the same level of ease and convenience from the bank of their choice and Al Rajhi Bank stands ready to deliver.

The Bank’s strategy focuses on delivering the best digital bank value proposition in the market, leveraging its digital banking capabilities across a wide range of customer groups, providing the best customer experience and having a differentiated and focused digital marketing approach across all segments served. This will be supported by digital-ready platforms that are responsive and scalable; aligned with business strategy and the demands and trends of the market.

Fulfil more Customer Needs

The Bank will expand into key growth areas such as finance, wealth management and payments – to serve more customers and deepen existing relationships. The Bank’s growth story beyond its traditional retail core is worth mentioning as it is a low risk area for expansion, thanks to the Bank’s strong natural assets of balance sheet, distribution, respected brand and leadership talent.

Building on Al Rajhi Bank’s current Private Banking business the emphasis will be on transforming from a transactional bank for this segment to one that offers broader wealth management services to meet more needs from existing customers as well as attracting new business. The provision of wealth management solutions will leverage the Bank’s Treasury services and subsidiaries such as Al Rajhi Capital and Al-Rajhi Takaful. The Group Treasury will also focus on building out the Treasury investment book; improving yields and maturity profile.

To meet the changing needs of the consumer finance market and the transition to a larger private sector in the Kingdom, Al Raji Bank has launched a new Finance Company – Emkan which is already succeeding and offers further material growth potential.

The payments market is undergoing rapid change with fintechs and new entrants providing a threat to established players.
As a leading Payments solution provider, Al Rajhi Bank is very focussed on adapting to these changes through the creation of end-to-end digital payments solutions for customers. Through innovative services, product offerings and advanced capabilities, the Bank will deepen its relationship with customers, placing them at the heart of everything it does.

Through the improvement of customer-related systems and processes, digitisation will also play a major role in improving employees’ capacity to delight customers and exceed expectations.

“ABCDE – Back to Basics” strategy – 2020 achievement highlights
Accelerate growth 2020 achievement highlights
  • Grow mortgage, private sector, affluent, ladies, and Tahweel segments
  • Enhance SME and corporate capabilities
  • Enhance international presence
  • Improve yields
  • Exceed industry
  • +6% YoY operating income growth
  • +90% YoY growth in mortgages
  • +15% YoY growth in current accounts
  • Optimised mortgage approval process
  • Micro-lending subsidiary Emkan launched
  • Emkan to cover SMEs and non-Bank customers


Become employer of choice 2020 achievement highlights
  • Engaged workforce
  • Expand development and training programmes
  • Strengthen diversity
  • Enhance employee value proposition
  • Higher engagement
  • Operations maintained without significant disruption
  • Special safety team on site to assist employees who were required to work on Bank premises
  • Offices sterilised daily and social distancing strictly enforced
  • Efficiently switched to remote working using existing IT infrastructure
  • 48,259 training days delivered
  • Full e-learning platform launched for employees


Customer focus 2020 achievement highlights
  • Update value propositions
  • Empower frontline
  • Align organisation to customer advocacy
  • Install and embed NPS across the Bank
  • Most recommended
  • 25 new products launched to cater to customers' needs
  • Distribution network enhanced
  • Unified front end (UFE) solutions delivered for provision of superlative customer experience
  • Maintained high Net Promoter Score in KSA – reaching nearly 66%
  • Highest rated banking mobile app


Digital leadership 2020 achievement highlights
  • Smartly expand channels and formats
  • Digitise customer journeys
  • Migrate customers to self-service channels
  • Innovate in payments
  • Best in class
  • SME and Corporate capabilities enhanced through first-of-its-kind eBusiness platform
  • Mobile banking platform revamped to enhance Retail Banking customer experience
  • Digital account opening and eCard capabilities enabled with 7.9 Mn. active digital users
  • First-of-its-kind e-Marketplace launched for purchasing eCards and vouchers electronically
  • 204,549 POS
  • 5,211 ATMs
  • 33 ITMs
  • 358 Self Service Kiosks


Execution excellence 2020 achievement highlights
  • World-class compliance
  • Enhance IT infrastructure
  • Centralise and automate operations
  • Strengthen risk infrastructure
  • Deliver
  • 310 bots with 27,000 transactions per day
  • Tier 4 Data Centre to migrated to new IT Centre to enhance the Bank’s accessibility
  • New Treasury System launched to enhance operations and product diversity
  • 30 key processes introduced to reduce turnaround-time and optimise costs
  • Tawtheeq – a new subsidiary focusing on lease contract registration – launched


Providing a leading Customer experience remains a core objective for Al Rajhi Bank and work continues to support and build on our customer-focused culture and continue to improve the customer experience at every customer touch point from branches and call centres to digital banking.