R): Partner Emmanuel Yoo; partner, Director and Global Head of Financial Services Philippe A. De Backer and partner and Head of Financial Services Julien Faye. The trio are currently on a visit to Saudi Arabia to address a workshop in Riyadh. (SG photo by Shahid Ali Khan) Julien Faye, a partner and Head of Financial Services at Bain and Company said the retail-banking segment in Saudi Arabia has immense potential for growth, as the local banks have yet to target the masses with innovative products and efficient services. Bain and Company is a global business-consulting firm with offices in most major cities. “We help management make the big decisions – on strategy, operations, mergers and acquisitions, technology and organization,” Faye told Saudi Gazette in an exclusive interview. Other Bain and Company officials Philippe A. De Backer, partner, Director and Global Head of Financial Services, and Emmanuel Yoo, another partner, were also present. Faye said the retail-banking segment in Saudi banks is under-served. “Simple indicators provide evidence for this, such as disparity in the ratio between inhabitants and the number of banking branches in any neighborhood, the proximity or access to banking services and products and the level of efficiency in serving clients,” Faye added, citing his own survey of Saudi Arabia's banking sector. Faye explained that Saudi banks need to reach out to the masses, particularly those that are not wealthy and have yet to settle down in life. “For instance, the banks in Brazil have adapted a host of innovative products that serve the masses through retail-banking and at a very low cost. I think the banks in Saudi Arabia are required to do the same,” he said. It is for this reason, he added, that the retail-banking segment offers such huge potential for growth in the Kingdom. Banks can target the retail-banking segment, which is comparatively easier to operate and requires less investment with reasonable profits. He added that of late, banks in Saudi Arabia are investing a great deal in establishing more branches, whether small or big. “But they must also boost the level of technology to boost efficient and target the masses through access and innovative banking products,” he remarked. Faye predicts that, over the next three to five-year period, banks in Saudi Arabia will experience cut-throat competition for deposits. The competition will reach a level that can be described as a “battle for deposits” he said. “Our survey suggests that banks are yet to utilize their full strength in exploiting market potential,” he stated, adding that online banking is one area where banks must seek to achieve a lot more through the introduction of the latest technologies. Many deposits can come to the banks through online banking, he said. Banks can utilize their back office staff, open branches in areas where there is a greater concentration of people and by improving the efficiency of services, benefit the business. Solving the employment problem Opening more branches might also open new job opportunities for young Saudis so such measures would address the employment problem in the country, Faye said. By boosting distribution channels, introducing Internet banking and holding discussions with potential clients, banks reap good benefits in the long term. Although the growth of Internet banking has shot up across the world, its penetration in Saudi Arabia is relatively low, he added. Faye said that his firm's basic aim would to offer consultancy on human resource development (HRD), which can be achieved through simple procedural steps – recruit, train, and retain the best people in the business. “We operate in all sectors of business activity that includes banking, insurance, oil, gas, food and agriculture among others. Bain and Company want to go to a next level by opening an office in Saudi Arabia, recruiting local people and encouraging others to follow and develop their business with a national workforce,” he explained. “We already have Saudis working in our team. You will witness a fully Saudi workforce within the next 10-year period. We are popular among the youth across the world simply because young people learn very fast while working with us.” Under the HRD program, those Saudis are also trained who are studying abroad in countries like the UK, US and France. “We also recruit Saudis as interns from MBA schools during summer vacations and equip them tools required in the job market. When they finally return home, they will be ready to contribute in the development of their country's economy,” he said. Faye added, however, that Bain and Company faces the same challenges as any other sector of business. He said Bain does not ask for any direct support from the government. “Our strategy is to enter the market and attract companies and develop business relations,” he stated. “Saudi Arabia is more attractive to foreign companies now than ever before. Some 10 years ago, it was unthinkable for Bain to open its office in Saudi Arabia.” Bain deals with various types of clients from different sectors, said Philippe A. De Backer, partner, Director and Global Head of Financial Services. He said that the benefit for Saudis is that it will boost the performance and competitiveness of institutions and for other firms like Bain. “The best players tend to use our service the most. Maintaining the competitive edge at highest level is a difficult task. However, I think Bain offers a win-win situation for both the Saudi workforce and the companies they are working with,” he added. Bain was founded in 1973 on the principle that consultants must measure their success in terms of their clients' financial results. The companies that outperform in the market would like to work with Bain. “We are as passionate about their results as they are,” Backer added.
