Emmanuel Daniel, chairman of the Asian Banker, discusses key issues impacting institutions' digitalisation journey and what it takes to be successful in their digital transformation at the Annual Heads of Retail Finance Dialogue 2018 in Kuala Lumpur, Malaysia
Here is the transcript:
Emmanuel Daniel (ED): I’m very pleased to be able to speak with Jocelyne Chahwan, the head of retail for BLOM Bank in Lebanon. In Lebanon, BLOM Bank is the leading commercial bank in that regard.
Jocelyn Chahwan (JC): And, retail.
ED: And, retail, right? So, how big is – just give us a sense of how big is BLOM Bank’s retail outlet – branches, employees, stuff like that?
JC: We have almost 80 branches in Lebanon. In terms of size, you’re talking about more than $3 billion in assets under management.
ED: What about key businesses, like mortgages?
JC: I’ll give you some numbers – usually, I don’t, but I’ll give it to you. We’re talking about more than $1.6 billion. A big chunk of our portfolio is made up of mortgages, and we’re leaders in car loans with a 30% market share with this business. As for payments, we are known as pioneers. We are now the first bank in Lebanon who launched BLOMPay. It’s a VTS (Visa Token Service) technology with Visa that is integrated into our mobile banking for debit and credit customers or cardholders. We believe that BLOM Bank is a pioneer in terms of innovation and launching new initiatives in the payment industry in addition to the retail business.
ED: In terms of remittance, is that a big business for BLOM Bank in Lebanon?
JC: Yes, of course. BLOM Bank was originally a commercial bank and its customer base was more commercial, not retail. In the last 15 years, I would say we’ve been very aggressive in the retail business, and when we talk about remittance, it’s not only for the retail business, but also for the commercial. So, in terms of size and number of customers in corporate, commercial, and retail, because of our size, the remittance part is definitely important.
ED: How technology-driven do you need to be in Lebanon and how much technology do you deploy in payments and in retail banking?
JC: I’ll tell you about the latest technology. When it comes to payment, BLOM Bank was the first bank with Emirates NBD – Emirates NBD is known to be very innovative in the region. Only BLOM Bank and Emirates NBD were the first two banks to launch VTS technology with Visa in this region, integrated into our mobile banking platform, like I mentioned. On the other hand, when you talk about the paperless environment, the collection, the follow-up, and the scoring, it was all implemented. We really live in a very advanced technological environment.
In terms of payment, it’s not the first time we’ve been a pioneer. Even previously, when you talk about the introduction of the EMV mandate for the GPRS acceptance terminal, or even if you talk about the mobile banking application, we were the first ones to introduce such technology. In 2000, BLOM Bank was the first bank to introduce instant internet banking. We’ve had instant internet transactions since 2000. Imagine how far it’s gone – even the SMS alert on cards or accounts – we were the first to introduce those.
We don’t talk much about our innovation, but we did a lot in the industry. Recently, I saw a movie with Wells Fargo introducing e-cash a year ago. We did this 15 years ago. BLOM Bank introduced e-cash to “unbank” the customer, just to get the code on the ATM. So, we did a lot of innovation in Lebanon. We were the first bank in the world to introduce a platinum debit card. We found out in 2007 that we were the first – in 1998 – to introduce such an initiative.
ED: Wow. Tell me a little bit more about yourself, then. Are you a marketing person or an infrastructure person? Which part of the retail business excites you most of all, going out to the customer? When you introduced these innovations, what was the impact? What was the driver?
JC: The business part. I’m a salesperson. I would be less specific than a marketer. I’m a real salesperson. I’m on the floor. I started bringing applications to the bank. I wasn’t even behind developing the products. Because I’m on the sales part, I was able to see how we could enhance the processes, how we could enhance the service to our customers, how we could enhance the prices, and then I moved up to the marketing part, and then, the product development part was under me. And then, I went to the credit side – the risk side – how we can get the good ones, not all of them. I evolved gradually, always at BLOM Bank. I moved from the marketing –
ED: Amazing. That’s a story in itself.
JC: Yes, and I was able to have the two halves – the marketing part and the risk part – and at the same time, I get the knowhow of the infrastructure part. We cannot evolve without knowing the processes and how we enhance them, and you can only reach this point when you have the scale. When you reach a certain scale, you have to go to the information, and you have to talk to your IT, and you have to improve all your processes.
This is the way you get your 360 degrees internally to prepare yourself, and to face your market and your customers properly, and to answer their needs. I believe we succeeded in this. And then, I became a deputy head of retail because I was able to handle those parts specifically, especially when my boss went to Egypt for two years. I was lucky to have this spot.
ED: That’s very interesting.
JC: I was acting head of retail. When he came back, I continued to be head of retail, and when he got a promotion, I was very ready for the position of head of retail because I proved myself to be able to handle the marketing part, the risk part, the credit, and the processes.
ED: There are two things that I want to zero in on. One is what you achieved in the merger of the acquisition of the HSBC portfolio. That’s one more path for you, which is integration, which has to do with people, it’s got to do with processors, and stuff like that. The other is really – what is retail finance in Lebanon today? What is the customer becoming? Is the customer becoming more demanding? Is he becoming more individualistic? Where is what you need to do with the customer moving?
Everything that you’ve already achieved has to do with what is called the law of large numbers, meaning when you have scale, you industrialise the process, and then you see the numbers coming in, and it’s worthwhile because the cost is low and the retail is high. But, what’s changing in Lebanon today?
JC: I’ll talk first about the acquisition of HSBC. I personally learned a lot. I was one of the four people who handled this acquisition. I took care of the retail banking and risk management. I learned a lot because some people would see it as only three branches, only 50,000 customers, but for me, I knew we had to go through the process anyway and had to go through every single detail. HSBC is known to be very customised.
The customers we have today are very sophisticated. Even the staffs are very knowledgeable, and part of the decision of our chairman that made the decision to acquire this bank was the quality of the customer and the quality of the staff. It wasn’t easy to do this transition. The technical part was very positive, but in terms of payment, in terms of the way we did the transaction and the transfer of the accounts, we had to match every single type of account. We had a lot of accounts and a lot of cards, payments, and functionalities under our products, so we were able to make it happen smoothly in a very short term. It was a six-month timeline.
It wasn’t much, but we were able to make it happen. The other thing is the post-implementation. We only had three months to do the delivery of the cards, and up until now, we were doing the adaptation for the very qualified staff to find the right job for them and to benefit from their skills, and we were able to make it happen. So, that’s HSBC. You also asked me about the market sophistication.
ED: Where are they moving? What are the customers demanding from you?
JC: The Lebanese are very trendy. They go into the hype of technology, but not all of them. We have hybrid types of customers. We have the trendy ones that are like Europeans, the ones that you see go more for Asia, and we have another type of customer that is very classical, and we even have the unbanked.
ED: You have each of the layers represented.
JC: Yes, and it is very challenging. We have a very conservative regulator, which I understand. When we go to the unbanked, in the panel today, we don’t have P2P yet. The KYC are very strict whether we’re talking $100.00 or $1 million. So, today, more and more, I believe we’re going into an evolution where the KYC will be lighter on the low-end tickets and we will have a P2P where the regulators will allow us to do such initiatives.
I see big potential coming in payments to target those. This is the future. This is where I see the potential and where I see the growth. Honestly, it’s more than… We achieved a certain maturity when it comes to or even the employees in the private sector, but we have the unbanked not yet tackled, and the compliance, you could say – the regulators today are conservative about that, and I understand that, but it cannot stay that way for long.
ED: Jocelyn, thank you very much.
JC: Thank you.
Click here to view Jocelyn Chawhan's Leadership Achievement Award in the Middle East 2018.