Interview: Søren Nikolajsen

When is the merger between Alawwal Bank and the Saudi British Bank likely to be finalised?

SØREN NIKOLAJSEN: The merger process is running on track. We are currently working through regulatory and shareholder approvals, and continue to expect legal completion during the first half of 2019. Full integration, however, will take longer. The integration of IT systems will take careful planning with a very close eye on making sure our customers continue to receive the same high level of service they are used to. An 18- to 24-month timeframe would not be unrealistic for full integration.

What can be done to improve financial literacy throughout the Kingdom?

NIKOLAJSEN: Improving financial literacy is critically important. According to the World Bank, only 30% of adults in Saudi Arabia are considered financially literate. This is less than half compared to the likes of the UK, Germany and the Nordic countries. Improving financial literacy is therefore a key objective of the Kingdom’s Financial Sector Development Programme, one of the 12 executive programmes launched under Vision 2030. The programme has a specific target to increase savings from 6% to 10% of total household income. This will require a conscious effort across many sectors, starting with education in schools and universities. The private sector – banks in particular – also have an important role to play. We need to develop innovative products and smart ways to educate our customers of the importance of saving for vital life stages such as buying a house, educating children and saving for retirement. Financial literacy is therefore very high up on our list of priorities.

In what ways can new technologies transform the way that banks operate?

NIKOLAJSEN: Technology in general, and artificial intelligence (AI) in particular, can transform how we operate in so many ways. Analysing vast amounts of data, directly interacting with customers and helping to improve our control environment are just a few examples of how technology can be used to improve how banks operate. Banks have no choice but to embrace this new technology. The trends are clear – usage of online and mobile services has grown significantly, while footfall in traditional branches is down. Our customers are basically telling us they want to do banking in a different way – whenever they want, wherever they want. Saudi Arabia, with its young tech-savvy population, is no different to more mature markets in that respect, so we need to be ready for this change. In order to do so, we recently rolled out an AI training course for all Alawwal Bank employees. It was a voluntary course, but I have been pleased with the significant participation from colleagues across the bank. A better understanding by many of what the new technology can do, and what it cannot do, is important as we continue to develop new, smarter and more efficient ways to do business.

How can cybersecurity concerns linked to increased use of technology be reduced?

NIKOLAJSEN: IT security is a constant battle that will never end. As banks develop newer and safer technologies, cybercriminals develop new ways of trying to circumvent our security. The frequency, impact and sophistication of cyberattacks are increasing, but thankfully so is our ability to prevent attacks. This is partly aided by AI, which allows us to monitor and screen transactions, and detect unusual patterns in ways that were not previously possible. We also continuously test and educate staff to be vigilant and report any attempts from cybercriminals to gain access to the bank’s systems. There is also very close cooperation with our regulator, the Saudi Arabian Monetary Authority, who actively promotes a cyber-conscious control environment for the sector.