‘Banks to lose more ground without technology’

Amer Sajed has recently assumed the charge as head of Barclays card operation after serving the bank in the same division for 11 years both in the UK and the United States. Before joining Barclays, he served Citibank for two brief periods in Pakistan. In an interview with The News, he was all praise for the high quality banking human resource of Pakistan. He cautioned that this advantage over all regional countries would be lost if this human talent was not empowered with technology.

Q. Congratulations on your new responsibilities. What are the factors that contributed to your rise in the banking industry?

A. Thank you! Allah has been very kind and after the Almighty I owe my success to the basic and tertiary education that I got from school and college in Lahore. These two institutions provided me with a strong base to acquire knowledge. Of course upbringing by my father, a dedicated and honest government servant instilled in me the values most respected in our culture. In short I owe my success to Pakistan. In fact the high standards set by Pakistani bankers in European and American banks were a plus point for me. What I mean is that I was not at a disadvantage because of the current negative perception about our country because the Pakistani bankers have performed above par in these countries. Overseas Pakistanis can remove all misperceptions about their countries if they perform better than others in all fields.

Q. Are the Pakistani bankers serving in their own country as good as their colleagues that are serving in foreign countries?

A. I have worked in Pakistan for two brief periods, and from my experience I can tell you that banking in Pakistan is in good hands. Banks in fact have provided a cue to other sectors for assured growth by being very particular in hiring high quality human resource. They have a built-in system that ensures regular capacity building of their employees. The trainee officers are selected purely on merit and after selection they are provided extensive training by most competent bankers at their in-house institutes. The training is rigorous and fully prepares them for the job they are appointed for. Among the commercial organisation, banks are perhaps the only ones that provide extensive trainings to their employees before they are stationed at the front desks of their branches. I must, however, warn that the Pakistani banks lag far behind in new technologies.

Q. Perhaps you are not up to date that Pakistani banks are acquiring new technologies rapidly.

A. Yes they are acquiring technologies for core banking operations but are neglecting the rise of digital innovators in the financial services. These innovators currently are more disruptive in developed economies but are gradually moving to markets in emerging economies that would threaten traditional business models of retail banks. The banks cannot act like an ostrich and bury their head in sand after observing a danger. Disruptive technologies act more rapidly in other sectors but due to the trust created over decades by the banks the customers are generally reluctant to change financial service providers. The change would be slow, but once a disruption goes viral it is impossible for normal service providers like banks to survive.  

It is difficult, but not impossible to disrupt banks as is evident from the huge success of PayPal that has snatched a lot of retail customers from the banks. However, the stubborn resistance shown by the banks can be judged by the fact that out of 450 digital disruptors that entered the domain of traditional banks only five of them have survived as standalone entities. The banks successfully repulsed the attack of these disruptors who offered, wallets, networks, etc

Q. Do you think that banks would survive these constant digital attacks?

A. Importance of banks cannot be underscored as they remain uniquely and systemically important to the economy; trust in financial affairs is highly important and banks have created trust among its customers, thanks to their being highly regulated by state watchdogs. Banks still hold monopoly in credit issuance and risk taking. Most of the customers are more comfortable in placing their deposits in commercial banks. Most of the banks are still the gateway to the largest global paying systems.

Having said that, let me make it clear that in the absence of any mitigating actions by banks, a considerable chunk of retail-banking businesses would be grabbed by digital upstarts.