National Bank of Abu Dhabi business model
National Bank of Abu Adhabi is the largest financial institution in UAE headquartered in Abu Dhabi, Khalifa Business Park,UAE. The bank has international presence mainly across Far East countries as well as the west. It offers a wide range of strategic business products and services such as retail banking, Islamic banking, property management and investment banking among other business interests.
National Bank of Abu Dhabi business model
Looking at the bank’s business model based on the three major components of the business model, the analysis reveals a largely customer-centric business model as discussed below under the three components of business model namely; value preposition, value architecture and profit equation.
The bank is offering the client a wide range of products and services as intimated in the introductory part of this paper. The bank has various personal and business accounts tailor made for these category of customers. It also has unique services such as Ratibi payroll services where the bank gives a prepaid card to employees who earn up to AED 5,000 and load cards with respective salaries without needing to open an account. These customers would be able to access there funds through ATM and they can as well make deposits to the prepaid cards using the bank’s cash deposit machines embedded within the ATM system. The bank also has sharia compliant banking services where the tenets of Islam religion are incorporated in the banks services and products. The strategy is popular mainly in Arab based countries where the bank has operations. Various types of credits are also available with the bank ranging from personal loans, mortgage loans and business loans. All these are strategically tailor made to suit customers in order to realize value to the customer. The bank ensures that the client receives the best the best expert advice regarding utilization of the funds. In each and every service or product the bank offers to the client the bank ensures that it is done with the best customer experience for the customer to realize maximum value from the bank’s services or products. (Aissi, Dabbous and Prasad, 2011)
The bank has employed a vast amount of resources owned by the bank’s shareholders to create and deliver value propositions to the clients. To create the value for the client the bank has carried out various researches through research and development companies to come up with various innovations of products and services specifically made for a certain type of clients. For example, National bank of Abu Dhabi has Islamic banking services which are hinged on the values of Islam religion. Since the most of the market in Far East is predominantly Muslim the services and products under this category have become popular in the bank branches located in these areas. The bank also offers expert analysis and advices to its clients to have an additional value addition to the products and services offered. This is evidenced by the creation of The Grow Stronger movement by the bank which represents the banks’ promises and undertaking to support customer’s goals and growth ambitions through provision of ideas, tools, and strategic expertise to ensure that these goals are met. The bank also trains its human resources in various banking disciplines such as investment analysis so as they are able to serve banks clients effectively. Apart from these aspects of value creation and delivery, the bank has invested in branches, ATMs and online banking platforms to further enhance creation of value and delivery of the same to the clients.
Revenues realized due to value proposition vis a vis capital investment or employed in order to create value and delivering it to the clients. The bank has the first two components of the business model properly aligned in that it is able to generate income. The banks profit model heavily banks on the advantages of economies of scale rather than huge profit margins between the cost of service and products and the revenues realized by the bank. For example, the sharia compliant services and products are known to be fairly cheaper in comparison to the contemporary banking services and products, but National bank of Abu Dhabi rely on numbers in predominantly Muslim market to shove up profit.
Based on the above three components of the bank’s business model customers will find it easy to go to them based on the good value of services and the products the banks has on offer.
NBAD Business Operating Model grid representation
The grid below depicts the business model of National Bank of Abu Dhabi business model. It shows the interrelationship between of various stakeholders of the bank aimed at meeting the organizational objectives of the bank.
Provision of banking services to customers e.g. prepaid cards, credits facilities and general banking service (Deposits and withdrawals)
From the above grid, it can be seen how various parts of the National bank of Abu Dhabi work together to deliver the services to customers and facilitate uptake of the products by the same customers either through cross selling or simply buying the product as a stand alone.
NBAD Digital Capabilities and Leadership Analysis
Based on the careful consideration and analysis of the bank’s digital platform the second quadrant of the diagram provided. The quadrant named; Fashionistas has characteristics which mirrors the banks digital capabilities and leadership. Starting with the first attribute of the chosen quadrant, the bank has many advanced digital features such as social and mobile platforms in silos.
The bank online banking solution is has capabilities to do simple transactions such cash transfer, balance inquiry as well as checking the account mini statement. The platform can also support functions such as utility payments and other forms of payments such as charities the client support. The bank recently upgraded this system such that instead of a customer having to carry token cards obtained at registration to access the secret code that would enable the customer access his or her account, the bank has adopted a technology called One Time Password commonly referred to as OTP. The bank sends the OTP via SMS to the registered number or email address. This feature enables the banks online platform system to be more user friendly and easy to use, attracting more customers. The platform is also available in English and Arabic languages. (Creeber, 2011)
The bank also has a mobile phone application where customers can download the app install and have it registered with the bank to able to access the banking services offered through the platform. The application has a number of features such as balance inquiry, cash transfer and checking account statement. The app can be personalized to the users taste and preference a feature that improves customer loyalty to the bank. The application interface is also user friendly as one can easily log in to his or her account once fully registered with the bank, without having burgs or delays associated with software algorithms.
On the second characteristic of the quadrant the bank fell on where it says that there is no overarching vision, it can be deduced from the analysis that there is no evidence of the bank working towards combining all the digital platforms to have a more comprehensive digital platform. For example the company has both Phone banking and mobile banking; these are capabilities that can be merged into one but from the analysis the bank continually uses these two similar forms of mobile phone based banking. This signifies underdeveloped coordination on the part of the bank. If for instance a client was to call the banks call center to request for transfer of funds from one of his or her accounts to another, then a few minutes latter he or she does the same transaction on mobile application, it will result to double work achieving one objective. This also leads to straining of banks resources that reduces the quality of services the banks offers her customers.
Digital culture is also likely to exist in silos. This is evidenced by fact that the bank has a number of roles duplicated across the banks platform. For example the existence of Phone banking which is directly handled by call center through its agents and mobile banking which is likely to be held by e-banking department creates form of role duplication. Among the services listed as being offered through phone banking is transfer of funds between one own account to another. This same service is possible under mobile banking platform. Now, the call center department of the bank could be having its own repository information or data on number of requests placed for funds transfer from one account to another. On the other hand the e-banking department of the bank could be having similar repository information of statistics on number and nature of account fund transfers requests done through online banking or mobile banking platform, and thus representing a digital culture which exists in silos.
“Playbook” to become Digital Masters
The top management of the National Bank of Abu Dhabi should consider implementing the following strategies in order for the bank to move from being Fashionistas to digital masters.
First the bank should ensure that all the digital platforms are consolidated in to one platform. Having different sections of the bank overseeing different platforms of digital banking doesn’t augur well for a bank of NBAD stature. Presence of data silos in an organizations set up reduces performance and collaboration. There shouldn’t be customers calling the bank call center to request funds to be transferred from one of his or her account to another. This is not only risky but leads to under-utilization of other bank platforms such as online or mobile banking. Call centers should be left solely for inquiry and reporting any challenges either on security grounds or otherwise and not to request transactions. This way the bank will have excellent governance across data silos.
The bank should also consider increasing digital platforms to enhance revenues that can be earned through digital platforms. One such example of this is through introduction of Agency Banking services. This is a common phenomenon with many leading banks across the world nowadays. The basic aim of this concept is to reduce traffic to the banking halls and drive more business to the e-banking solutions. This involves signing up business people who would like to be bank agents to offer Agency banking services to the bank clients and earn commissions. The services would be offered through a point of sale machine connected to the bank systems. The services to be offered include withdrawals and deposits among other services. Ideally, the bank agent will need to open an agency account with the bank and deposit funds in it as float. The agent can not transact beyond his or her float, this is the security. This will inculcate strong digital culture in the bank and increase digital initiatives which will boost revenues realized by the bank through digital platforms. (Sambamurthy and Zmud, 2013)
When all the digital platforms are hosted and managed from one central location, the bank will have managed to consolidate all the online and mobile based transactions for better management and achieving overarching digital status. The status is important in further developing the digital platforms as it enhances collective and analysis of the relevant data for improvement. Without comprehensive data from combined platforms it will be challenging to rely on the conclusions and inferences drawn from a section of data that does not including all the banks transactions. (Sambamurthy and Zmud, 2013)
Aissi, S., Dabbous, N. and Prasad, A. (2011). Security for mobile networks and platforms. 1st ed. Norwood, MA: Artech House.
Creeber, G. (2011). Digital cultures. Maidenhead [u.a.]: Open University Press.
Sambamurthy, V. and Zmud, R. (2013). Business platforms, digital platforms and digital innovation. 1st ed.