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Digital Banking, SMEs, ESG take centre stage at prestigious Global Finance virtual event

28 March 2021

Digital Banking, SMEs, ESG take centre stage at prestigious Global Finance virtual event

Mr. George Richani, Group CEO of Ahli Bank of Kuwait (ABK), joined fellow industry executives at the Annual Kuwait Banking and Finance Roundtable held on Wednesday - March 23rd, 2021. The Governor of the Central Bank of Kuwait, Dr. Mohammad Al-Hashel, was a key participant and the event was moderated by Mr. Chris Giarraputo, the Chairman of Global Finance.

The virtual event focused on the challenges facing Kuwait’s banks, especially in light of lockdowns, movement restrictions and significant changes to customer behaviour precipitated by COVID-19.

A number of other key areas were discussed, starting with digital banking in Kuwait and recent calls for the development of a comprehensive post-pandemic economic plan for the country, and the importance of ESG practises as well as SME contribution to the non-oil GDP.

Mr. Richani elaborated on the positives as well as the challenges that come with digitization, such as the need for attracting and retaining technical key staff such as data scientists, software architects and designers, shifting the operating models in banks from waterfall approach to being more agile, ensuring that processes are automated using for example Robotic Process Automation to reduce human error and contain cost. He highlighted the importance of ensuring that society at large understands banking products well and that clients’ full awareness of cyber security is reached. He also acknowledged that the Central Bank of Kuwait’s aggressive and swift actions early on helped banks, clients and the economy to endure the pandemic.

Participants eagerly debated the issue of how to effectively support Kuwait’s small & medium enterprises (SMEs). As Kuwait accelerates efforts to localise its workforce, the majority of new jobs are expected to be created in the SME sector. These growing companies have traditionally found it difficult, however, to access the funds and expertise they need to grow.

Mr. Richani further commented on SME’s saying: “SME’s are very important to spur growth and create employment in any country, but more so in Kuwait, because it dovetails with the need to diversify away from depending on one hydrocarbon commodity. He added that almost 85% of the registered companies in Kuwait are SMEs if measured by turnover of less than KD 2 million or less than 20 staff. While Kuwait boasts a rising start-up scene supported by corporates, less than 5% of the banking sector funding goes to SMEs.

“As such, there are many SMEs in Kuwait, but the contribution of SME’s to non - oil GDP in Kuwait falls short at a mere 6%, compared to the likes of the UAE at 80%, KSA at 33%, Bahrain at 35% and Europe at 50%. Contribution of SME’s in Kuwait to total employment is only around 23% in Kuwait compared to Saudi Arabia’s 60 %, UAE’s 86% and Bahrain’s 57%. There is certainly room for improvement since Kuwaitis in general have entrepreneurship tendencies. That said, regulations do not make it easy, and the ease of doing business in Kuwait as measured by the world index is not impressive, and hence much is to be done on this front.”

The speakers went on to discuss M&A as well as job creation and the Government’s plan - Vision 2035.

The event was closed with a comment from the Governor, thanking all participants for their contribution followed by the closing statement of Mr. Chris Giarraputo, Chairman of Global Finance & moderator of the event.

For more information kindly visit eahli.com or contact an ABK customer service agent via ‘Ahlan Ahli’ at 1899899.