Yemen, June 12, 2017


Armchair banking disrupts couch commerce

Banks have the potential to take eCommerce to the next level by becoming super-aggregators

From swipe to chip and now to dip, tap and flash, payment technology has leapt ahead in this century, necessitating merchants and consumers to keep up with the developments in the cashless journey, which is in turn driving the huge growth of e-commerce. Now we can shop with a just a tap of our mobile phone on the till, or of our index finger into the biometric recognition software. We also click and shop.

New data show that 61 per cent of people in the Middle East and 71 per cent of people in the UAE shop online. The GCC e-commerce market is projected to reach $20 billion by 2020 at 30 per cent annualised growth, outpacing traditional retail’s growth of nine per cent.

However, e-commerce is still largely cash on delivery — what I like to call c-commerce — which remains the preferred mode for payment even when consumers shop online.

When a shopper uses e-commerce to shorten the gap between wish and fulfilment, consumer trust is stretched to its limit because of the gap between money changing hands and the product being received. In the UAE, only about a third of all online shoppers pay via their e-commerce-friendly credit card. A full two-thirds still use cash on delivery, mainly due to trust issues. The haunting question is: Do I really want to disclose my payment card details to multiple third-party shopping sites? The hesitation to do so is not just a loss for banks, but also lengthens the country’s last-mile journey to a cashless society.

Major strength

When it comes to e-commerce, banking is integral to shopping. Banks today enable armchair banking via web and mobile apps with multiple layers of security. The trust engendered by this security is a major strength, and can be leveraged to provide a smoother couch-commerce experience. Armchair banking meets armchair shopping in a big bang evolution with the potential to positively disrupt customer experience.

Creating the experience of being chauffeur-driven without paying limo rates has allowed Uber to become the world’s largest taxi company without owning any vehicles.

Providing an authentic insider’s experience of the city for travellers has catapulted Airbnb into becoming the world’s largest accommodation provider without owning any real estate.

Setting up a platform for people to share their stories has resulted in Facebook becoming the world’s most popular publisher without ever creating its own content.

Banks, too, have a similar opportunity with e-commerce — to become the largest enabler of online shopping without actually retailing the inventory.

This is the concept that lies at the heart of Emirates NBD’s e-commerce experience, the Skyshopper portal, which is the first of its kind in the Middle East, and one of the trailblazers worldwide. As an aggregator of aggregators, Skyshopper gives Emirates NBD card-holders a wide variety of choice — such as travel, grocery, fashion, electronics, international shopping, entertainment, utilities, etc — along with the trusted transaction security developed over decades.

Better life experience

As speed and convenience drive the cashless revolution, fraud protection is a carefully achieved balance that banks have mastered. They also become partners in their customer’s lifestyle rather than mere transaction enablers as customer needs evolve — they no longer chase a bank balance for its own sake, but view money as a means to a better life experience.

Merchants and retailers, on the other hand, are looking for more effective ways to use technology to reach the right customer at the right time so that they can offer products and deals that build loyalty. It’s their core business, to which a bank can add convenience, reach and security.

When a bank is more than a facilitator for financial transactions, it moves towards larger fulfilment of transaction-based needs and create a solution that puts them not just back in the game but right at the centre of it, in a way that benefits both merchants and consumers.

By creating a consumer-centric platform as a super-aggregator of goods and services, allowing its cardholders to complete e-commerce transactions in multiple sectors, a bank has the potential to become the biggest marketplace without actually selling anything itself.


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