BEIRUT: The rise of financial technology and big tech companies is adding extra pressure on traditional banks to go digital. Competition is going to get more severe, Fahim uz Zaman, Middle East general manager for the European Financial Management Association, said Wednesday on the sidelines of the EFMAs fifth annual summit in Lebanon.

The confab, held at the Hilton Habtoor, brought together retail bankers from countries like Denmark, Hungary, Turkey and the UAE, alongside their Lebanese counterparts, in addition to Central Bank officials, for the cross-fertilization of ideas - most pressingly, to talk about digitalization.

Lebanese banking is currently in a state of transition, according to Jocelyne Chahwan, the head of retail banking and a deputy general manager at BLOM Bank.

What we have today is like a hybrid way of servicing the customer. You have the human side if you visit a branch and you have the digital platform if you want to do it from your office or home, and even the ATM, the smart ATM, which I consider an automated technology, she said.

Some banks are using the [interactive teller machine]; its a hybrid. You start with a digital transaction and if you need an adviser, you can have an interaction with a human being, Chahwan added.

She predicts that in half a decade, machines will outnumber bank tellers as the latter transition to more advisory roles.

The summit also offered a chance for Central Bank representatives and Lebanese retail bankers to meet and jointly tackle digitalization.

As we have seen, over the period of the last five years, [the Central Bank] has become a lot more receptive to [these] ideas and has actually reacted to the demands of the industry, Zaman said. It is now putting in place new frameworks, and the rules which are going to permit more digitalization.

One representative of the Central Bank in attendance spoke of the new E-Transactions Law as the latest step in regulating e-banking. This law is very important. It allows us to move forward with e-payments, digital payments and digital currency. This law has given the Central Bank the necessary authority to issue the necessary regulations for digital currency, digital payments and others, and the Central Bank is working on these issues in a very serious manner, Makram Bou Nassar, the Central Banks executive director and head of payment systems, told The Daily Star. The law has been in effect since the beginning of the year.

Asked whether cryptocurrencies like bitcoin will come into use in Lebanon anytime soon, Bou Nassar responded in the negative. However, the Central Bank is planning and working on issuing its own Central Bank Digital Currency, but this requires time. Its under investigation, he said.

While certainly more is yet to come in terms of regulation, another main challenge in the way of digitalization is rural inclusion.

If you see today, everybodys talking about rural, said Ramzi Saboury, the chief commercial officer of Areeba, a Lebanese fintech company whose self-proclaimed goal is to empower a cashless world.

Areeba has started a rural awareness campaign, which began in the Bekaa Valley, toured other rural areas and is set to conclude in the Chouf region in September.

I started this two years ago. ... The biggest challenge [was] education and awareness, Saboury said.

We went to rural areas, because you have to set [up] the infrastructure, because you want the consumer to wake up to know that his entourage accepts his payment, whether mobile or card. And the challenge was to convince businesses, small ones, Why do [I] have to go electronic? So you have to tell them whats bad about cash, but you have to go with [nontechnical] language. Use day-to-day business language, Saboury said. We were able to multiply our acquisition by small businesses by 7 to 8 times [compared to] before because of this.

Areebas foray into this previously untapped market has shined the light on e-banking in rural areas. Now if you go, youre gonna start seeing [that the Central Bank] is starting to talk about rural, [and] the banks are [as well], Saboury said.

Saboury foresees no room for face-to-face interactions in the future. The future is transactional. The relationship has become the transaction, he said.

Copyright 2019, The Daily Star. All rights reserved. Provided by SyndiGate Media Inc. (Syndigate.info).

Disclaimer: The content of this article is syndicated or provided to this website from an external third party provider. We are not responsible for, and do not control, such external websites, entities, applications or media publishers. The body of the text is provided on an as is and as available basis and has not been edited in any way. Neither we nor our affiliates guarantee the accuracy of or endorse the views or opinions expressed in this article. Read our full disclaimer policy here.