With Bassel Gamal at the helm, the Qatar Islamic Bank to become the second-largest bank in Qatar and the most prominent private bank in the country by growing the bank’s asset base by about 150% over five years. The bank’s market capitalisation more than doubled during the same period, earning Gamal and the group the CEO Leadership Achievement and the Best Managed Bank in Qatar in 2019 awards, respectively.

He also led the bank with the successful implementation of a well-defined business strategy, including a constant upgrading of product suite and the digitalisation of the bank’s services.

Gamal shares his leadership views and the transformation journey of the bank in his conversation with The Asian Banker.

Foo Boon Ping (FBP): We are speaking with Mr Bassel Gamal, chief executive officer of Qatar Islamic Bank, the leading private sector bank in Qatar. We are delighted to be talking to him here in the Bankok, Thailand on the sidelines of the Asian Banker Future Finance Summit.

Mr Gamal, since taking the helm of Qatar Islamic Bank, you have led it to many achievements. Let’s talk a bit about some of the key achievements in 2018. Among them, the things that you have brought the bank in terms of digital transformation. You have also set a new vision for the bank. You have totally reconfigured the bank in terms of its business lines. Walk us through that process.

Bassel Gamal (BG): I cannot talk about 2018 without talking about a few years back and what we have been doing through that period of time. Compared to where it was in 2012 or 2013, we have almost doubled or more than doubled in size. We have moved from being number four or five in the market to being second only to the biggest bank there, without mentioning names.

We are second in terms of profitability, in terms of asset efficiency, in terms of all the key performance indicators (KPIs) that you can think about. These (achievements) didn’t come overnight. It came over a period of time, which has been a goal and a strategy set by the bank based mainly on being pragmatic, being efficient and knowing the market needs and what your limitations are.

It hasn’t been a solo experience. It has been an experience with my colleagues and managers and staff. It is a team effort to get where we are today. In terms of 2018, we started earlier than 2018, but the year has seen part of the transformation into our information technology investments. We started our investments into our core banking system back in 2015 and we are currently trying to build on that. We were the first Islamic bank in the world to offer instant finance, or one-click finance as we call it.

That’s quite an achievement. 2018 has seen challenges, and it has seen, I would say, victories and triumphs.You know of the challenges in the area. You know of the geopolitical circumstances there. Definitely, it has been a year of challenges carrying forward from 2017.

So far, alhamdulillah, we have been able to overcome most of those experiences. We have come out of them stronger than where we were before. And this is all due to quite a strong economic environment in Qatar, a supportive regulator, a supportive board and the help of my colleagues. It has been quite an interesting year.

Opportunities in digital transformation

FBP: There were political challenges economically, as well. From 2016 onward, there has been the challenge with oil prices in that region, and also, at the same time, how big globally the industry is talking a lot about disruption from new technology.

Tell us a bit about the situation in Qatar, for example. How much pressure was there from either your consumer or from your regulator, to be up-to-speed with technology disruption or the fintech or the big tech, potentials entry into financial services?

BG: We need to look at it from both sides. We need to look at it from a consumer’s point of view, and we need to look at it from the regulator’s point of view.

The central bank is quite keen on banks to invest in fintech but within regulation and regulated framework. They cannot just open it up for unregulated companies to operate in the market. We see opportunity in the fintech business. We see an opportunity to cooperate and combine efforts with fintech companies. And this is the future. We cannot look away and say, “It’s not going to happen”. It is going to happen, but that has to be within a stricter regulatory framework. This is on the regulatory side.

On the consumer side, consumers are exposed to global markets now. They’re not just (exposed to) local markets where they get limited services, and they're happy with it. It’s a very competitive market as you might be aware. They are requesting, and they're asking all the time for more.

Banks should not wait for clients to ask for a better service. Banks should take the lead to be able to offer clients services that they have not yet embarked on. And that’s why I think it is critical for us. We started that journey, the “LL digital journey”, as we call it. We started it during 2018, and it’s going to be an ongoing thing. You know technology is always evolving and it always changes.

There is no point in saying that we've completed our investments. This is going to be an ongoing effort, and there is always innovation and technology. Technology provides us with an ability to become quicker, more efficient and closer to our clients whenever we can. This is the future. And clients, at one point and time, will not be interested in going to the branches. They want to do their business remotely.

This is where the investment in technology pays off. It becomes more efficient. You actually, I wouldn’t say, reduce the cost, but make costs more structured, and it improves your top line rather than your bottom line as well. This is where we stand and this, I think is the future. You cannot hide.

FBP: One thing we are looking in the future is to digitally transform in a lot of organisations, transforming the current business processes and all – in terms of digitising the current business model. Some are also exploring a new business model. Throughout the summit, one of the key themes about reshaping the future financial institutions is also to explore this whole idea of open banking, building a community around platform and ecosystem. Share with us your thinking on that area in terms of collaboration, bringing a more open platform.

BG: You have to look at the regulatory framework. We cannot work in isolation from the regulators and from whatever regulations that are governing our business model. That’s one. Number two, there are still some segments of the customer base who still likes to deal with a human at the end of the day. They like to go to a branch and deal face-to-face with a customer service agent or staff.

This is going to continue for some time. But the market is expanding toward more of LL technology and more toward virtual banking rather than bricks and walls. We are open for innovations within the regulations. But we have to work within. And you can see it as a protection as well for our clients, for the system in general. With investment and technology, you have to invest a lot in the cybersecurity as well. This is becoming like a nightmare.

You have to have a similar line of investment, if not even higher, in your security and your IT security. And we've seen, over the past few years, how cybersecurity has become critical. It is an issue that needs to be dealt with not just by banks or corporations, but even countries.

I think this is a very important part of the transformation programme that any entity or any institution would be looking at.

FBP: You mentioned that through your leadership, through your stint, you doubled the size of the bank in terms of assets. What's the future? Where is the goal? Where are the opportunities coming from? Where in the context of this artificial limits that they set on you in terms of your opportunity around the region?

BG: Over the past period, as I stated, we’ve almost grown our asset base to 150% and we’ve grown our deposits and financing portfolio and bottom-line equivalent to around the same percentage of growth. That equates to around 15% or 16% annually, year on year, for the past six or seven years. That is not sustainable without having efficiencies built in the process.

The focus will not be more on the growth of the balance sheet, but rather on the creation of value for the shareholders and the clients going forward. Creation of value would happen only if you are investing in or making the right investments at one point and time and being able to grab the fruits of the investments. The focus will be mainly on our bottom line; maintaining a decent quality of assets going forward, and rather than just growing the size of the balance sheet.

If I give you an example of our market gap nearing market capitalization, for the bank, it (asset base) has grown almost by 150% over the past five years, and our market capitalisation has grown more than twice during the same period. That means that we’re doing something in the right direction.

FBP: Thank you so much, Mr Gamal.

BG: Thank you for having me.