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    Compliance Function In Bank of Bahrain and Kuwait

    Introduction

    Bank of Bahrain and Kuwait (BBK) located in the jurisdiction of Bahrain is committed to providing a brighter way of banking solution to eh individuals, families or businesses. The prime focus of the bank is to generate an effective and secure banking experience to its valuable customers. The study outlines the new projects and activities designed by BBK to provide efficient customer service. This is usually associated with technological advancements where the customers of distant land are also benefitted. Additionally, through the evaluation of the potential stakeholders, the study highlights the proposed business strategy of BBK. The Compliance team of the organization is working on innovative strategies so that they can generate effective banking solutions to their valuable customers. Furthermore, the implementation of induction training will help the organization to achieve success both in terms of employee competencies, as well as in terms of organizational efficiencies.

    Projects and Activities of Bank of Bahrain and Kuwait

    Implementation of electronic remittance service through MaxWallet App

    BBK is considered as the pioneer in commercial and retail banking in Bahrain. The organization holds the motto to serve its valuable customers with the latest technological advancements so that they experience an innovative banking solution. The compliance department of the bank has realized the importance of adapting to an advanced tech wave. Thus, they have already implemented FinTech-oriented novel enhancements to its banking services. Additionally, the compliance department is proud to announce the launch of a novel Money Transfer solution[1]. This aims to enable the account holders to provide an advanced solution so that they can avail faster, transparent and secure services[2]. Moreover, BBK has proudly notified that this new electronic payment service will be beneficial for those customers staying abroad but operate through their banks. Besides this, the customers can also avail the bank’s cash-out locations and mobile wallets in an easy manner. Thus, BBK has decided to introduce MaxWallet App in association with Mastercard International and CrediMax. It is evident that the compliance department is focused to deliver other FinTech-based projects that align with the initiatives taken for financial digital transformation in the country. BBK announced that MaxWallet could be regarded as the digital wallet solution that is introduced by CrediMax[3]. This is to ensure that a wide range of features and services are easily attempted by the customers of Bahrain. Moreover, this App will help the customers to make purchases and perform effective transactions through their Smartphones. The Assistant General Manager, Dr. Adel Salem, heading the retail-banking department of BBK announced the strategic technological plans generated by the organization. He stated that the bank is directing its strategic planning towards the implementation of the latest electronic services involving secured payment options. Additionally, he also revealed that the bank would generate enormous revenue by introducing Mastercard Send services through the MaxWallet App. This will help those customers who hold authentic BBK debit cards to carry out convenient payments over more than 30 countries. Moreover, they can carry out transactions with full reliability, security, and great transparency. According to the statement proposed by the Compliance Manager, the service will be included under the MaxWallet App of the sub-section Send Money key. Furthermore, the compliance manager revealed that this advanced e-payment service costs less than the traditional international money transfer sources. This is supported by the Mastercard network that provides excellent security services and other facilities through a single connection. The App is available for both iOS and Android devices and the novel Mastercard Send services will be available to the wallet.   

    Introduction of Instant Card issuance by BBK

    BBK has signed a contract to generate instant card issuance and printing of statement solutions. The Compliance Manager stated that this feature would be launched by the next year and would be available to all the branches of BBK. Additionally, the bank revealed that this new feature would be made available to the retail customers. The customers would be provided with full liberty to collect and issue their instant issued debit cards. They would also be provided with full consent to print their statements in a secured manner and by their own convenience from the kiosks. This feature is likely to be installed in all the branches of the bank so that retail customers are not deprived of their latest banking solutions. In this context, Dr. Adel Salem stated that two-service solutions would be provided by the bank that would present an amalgamation of easy usage, high-level security, and reliability[4].  Along with the advanced technological solutions, Statement Printing and Instant Card Issuance will be beneficial for the customers. BBK announced that they would offer their account holders with specific and instant benefits like account statement issuance and on-the-spot card with minimal waiting hours. Additionally, this will help the retail customers to issue novel ready-to-use debit cards in place of the existing cards. The customers can renew their old cards and print the statement easily through the latest technology implemented for easy banking services in BBK.         

    Stakeholders of Bank of Bahrain and Kuwait

    Bank of Bahrain and Kuwait is a public organization, which is based in Bahrain and this is also a shareholding company as well. In addition, this organization is also engaged in the stipulation of commercial banking products along with services through a network of branches in Bahrain, Kuwait, and India. There are four segments of business and those are retail banking segments, corporate banking segments, international banking segments, and treasury and other segments[5]. In this regard, it has been found that the retail-banking segment mainly handles the individuals’ consumers’ deposits. This is also helpful as well for providing the finance type loans to the consumers[6]. Moreover, overdrafts, facilities of credit and fund transfer along with foreign exchange. All of these are dealt with by this segment. In addition, in the second segment, the corporate banking segment is useful as well for a different purpose. This segment is useful for proving loans along with other credit facilities. This segment is important for the deposit along with present accounts for the institutional and corporate consumers in Bahrain. After that, the international banking segment provides loans along with other credit facilities. This segment is useful as well for the benefits of deposit and current accounts for institutional consumers and international corporate. This segment is advantageous as it covers the operations of foreign units along with investment. The treasury and other activities segments are advantageous for trading. This segment is useful for money market and treasury services also. In order to operate the funding operation of the organization, this segment plays a vital role.      

    Few statistics of the Bank of Bahrain and Kuwait are given based on the sales per businesses, sales per regions and shareholders.

    Sales per Business

     

    2016

    2017

    Delta

    BHD (in Million)

    %

    BHD (in Million)

    %

    Retail banking

    47.35

    25.0%

    47.00

    23.0%

    -0.35%

    Investment, Treasury and other Activities

    33.00

    18.0%

    37.37

    18.0%

    +11.00%

    Corporate banking

    28.00

    15.0%

    14.0

    14.0%

    +4.60%

    International banking

    23.90

    12.7%

    11.0

    11.0%

     -4.00%

     

    Shareholders

    Name

    Equities

    %

    Ithmaar Holding BSC

    275,000,000

    25.0%

    Commission of Pension Fund of Bahrain 

    202,030,300

    18.6%

    Kuwait Investment Authority (Investment Company)

    202,220,000

    18.5%

    The general organization for social insurance

    145,000,000

    13.0%

    Global investment house KPSC (Investment Management)

    11,000,000

    1%

    Eurizon Capital SA

    40

     

     

    Based on the above table, this can be revealed that there are mainly five shareholders in the Bank of Bahrain and Kuwait. In this regard, this is found that the equities of Ithmaar Holding BSC are 275,000,000 with an amount of 25 percentages. The equities of the Commission of Pension Fund of Bahrain are 202,030,300 with an amount of 18.6 percentages. The equities of Kuwait Investment Authority (Investment Company) are 202,220,000 with an amount of 18.5 percentages. The equities of the general organization for social insurance are 145,000,000 with an amount of 13.0 percentages. The equities of Global investment house KPSC (Investment Management) is 11,000,000 with an amount of 1 percentage. In addition, this has been found as well that the equities of Eurizon capital SA are 40.

    Bank of Bahrain and Kuwait should continue its attempt to increase its shareholders' values along with protecting their interests. Bank of Bahrain and Kuwait needs to be prioritized on the privileges of their shareholders with the help of practicing the chase of excellence in corporate life. Bank of Bahrain and Kuwait needs to be fulfilled the interest of all their stakeholders, which includes clients, shareholders, employees, and the public[7]. Risk appetite can be considered as the level along with the type of risk, which the bank is willing for assuming to accomplish its business plus strategic objectives. This is keeping in the viewpoint of obligations to its stakeholders. Bank of Bahrain and Kuwait intends to optimize the risk-reward for the advantage of stakeholders and it is reviewed. In addition, this is applied by the bank with the help of strategies such as risk management, ICAAP, and business investment. The bank has one open policy on communication with all of its stakeholders. This policy of communication has adopted a communication disclosure policy consistent with Basel II's needs. Shareholders are invited by the chairman for attending the Annual General Meeting (AGM)[8]. The chairman along with other Directors attends the AGM plus there are available as well for answering all questions. The bank is at all times mindful along with aware of its regulatory plus statutory obligations regarding the distribution of information to its stakeholders.  

    Induction training adopted by the Bank of Bahrain and Kuwait

    In order to maintain their reputation as the customer-friendly bank, BBK has adopted induction training to train their employees to provide effective services to the customers. Induction training is important for an organization where an employee receives effective training when he or she first joins the bank. This enables the new recruit to become productive so that they can adapt to the baking rules and regulations. BBK has implemented induction training so that they can avoid costly mistakes by recruiting fresher who are unaware of the latest technological advancements in the banking sector[9]. The bank has designed the induction-training program based on the adaptability of the employees. Additionally, the training is different for different departments as the complexity of the banking services vary among the departments. Moreover, the training is also based on the job role. It is evident that the training session and training type is different for managers and executives. The induction training includes learning of the responsibilities of the job profile, greeting of new colleagues, observing the new premises and understanding the significance of each department[10]. Additionally, it also presents the learning session of the aims and values of the bank. Moreover, a special training session is provided to the newcomers so that they are aware of the internal policies and working of the banking business. The main motive of induction training is to integrate new workers into the bank so that they understand the systems or procedures followed by the organization. BBK believes that induction training will help the new employees to adapt themselves to the new work environment so that it gives them a sense of belonging to the bank. BBK revealed that they provide special training sessions to the Directors so that they can provide professional advice on different issues when required. BBK considers this induction training as the flagship in-house program that provides adequate training to the new entrants. Moreover, the organization has developed Credit and Foreign Exchange Programs so that a specialist-training program can enhance the performance of the higher authorities of the organization. BBK has introduced induction-training programs for the following benefits that align with the advantages shared by the organization:

    Saves bank’s money and time- The induction training provides adequate information to the fresher so that they can perform effectively for the bank. BBK believes that when the training is effective, the employee will remain motivated to deliver his responsibilities effectively.

    Reduction in employee turnover- The new employees are eager about the new roles and services for the company. They have numerous questions regarding their job responsibilities. If they get effective answers to their questions, they are likely to remain in the organization[11]. Thus, induction training provides them with adequate information and answers to their unsolved questions.

    Assures operational efficiency- BBK has developed effective training programs so that the employees can understand the culture of the organization, its values, and objectives[12]. This will help the employees to serve efficiently in a complex situation. Additionally, the induction material will help the new employees to interact effectively with the experienced staff. This will keep the new employees well informed about the latest innovations and strategic changes in the organization.

    The induction training can be beneficial for the employees of BBK in the following ways:

    • The new employees are valued and they feel respected. The good training session seems a warm welcome for them to a new organization[13]. This motivates them to perform best for the organization
    • The induction training helps the employees to achieve the necessary information about his job role. Additionally, he gets clarification to work for a specialized area in this filed. BBK stated that when the employees are aware of the organizational policies and culture, it would be easier for them to adapt to the work environment
    • The employees develop effective communication skills so that they can generate effective customer service. Additionally, this will help them to achieve effective employee performance that will enhance the organizational performance for the long run   

    Business Strategy proposed by Bank of Bahrain and Kuwait

    Business Strategy proposed by Bank of Bahrain and Kuwait

    Lots of business strategies are there, which can be utilized by the Bank of Bahrain and Kuwait and with the help of using these strategies, the business can be possible to develop as well. Those useful strategies are community marketing, product bundling, products, which are pre-approved, premier services and teller referrals. Money is made by the bank with the help of total deposits, which are maintained by the bank along with loans issued[14]. Many banks plus credit unions is holds by the consumers and everybody that competing for their savings, checking along with lending needs plus requirements. As the competition in the market are very high, this can be said that banks have to used strategies in order to acquire plus retain  assets from new as well as existing consumers.

    • Community marketing

    The range of bank is depended on its size plus capabilities. In this regard, this can be seen that small banks have one or two branch offices while multinational banks like Bank of Bahrain and Kuwait have many braches in all over the county. In this regard, ii can be said that Bank of Bahrain and Kuwait have to adapt the local marketing strategies for serving the immediate community. With help of prioritizing on the local community requirements, the bank can attract a wider percentage of target market.

    • Product bundling

    Product bundling is one of the most usable strategies for a bank and this can be utilized by Bank of Bahrain and Kuwait. For instance, this can be found that providing a free checking account for those, who open saving the account. Successful business strategies can be considered as useful for the development of creative building solutions.

    • Pre Approved Products

    Bank of Bahrain and Kuwait can review the existing accounts to determine the positive banking along with credit trends in consumers[15]. This can be very beneficial for the development of business of Bank of Bahrain and Kuwait.  

    • Teller Referrals

    Teller of bank interacts with the majority of bank clientele. This can be proved as one of the useful strategy as well for Bank of Bahrain and Kuwait[16]. Tellers are useful as well for performing the everyday transactions like cashing checks, transferring money and making deposit. Bank of Bahrain and Kuwait needs to be train there tellers to search for opportunities to cross-sell the products of bank.

    • Premier Services

    Premier Services are designed for attracting the high net worth bank clientele high net worth clients often have various requirements along with expectations. With the help of offering a chosen set of private bankers for handling all the transactions along with account reviews, Bank of Bahrain and Kuwait can increase the trust of clients[17]. Service is better often with the private bankers and this makes capable to prioritize on funding the right solutions for fitting the complete financial scenarios.    

    Banks are hindered by decades of legacy infrastructure and this are struggling with convoluted network stacks, which is supported only by the historic business model. For obtaining success in the future, Bank of Bahrain and Kuwait needs to be adopted a new technical perspective along with embrace open source with the help of fostering effective communication between non technical and technical teams. For instance it is found that Red Hat offers open banking and API technology. This assists banks participate in open banking marketplace along with gaining competitive advantages.    

    Conclusion

    Based on the discussion, it is revealed that the bank would produce huge income by introducing MasterCard Send services via the MaxWallet App. This will assist those customers, who hold authentic BBK debit cards to carry out suitable payments over more than 30 countries. Moreover, they can carry out the transactions with full reliability, security and great transparency. This policy of communication has adopted a communication disclosure policy consistent with Basel II needs. Shareholders are invited by the chairman for attending the Annual General Meeting (AGM). Based on the statement proposed by the Compliance Manager, this can be concluded that the service will be included under the MaxWallet App of the sub-section Send Money key. Furthermore, the compliance manager revealed that this advanced e-payment service costs less than the traditional international money transfer sources. It is supported by the MasterCard network that offers excellent security services and other facilities through a single connection. The App is obtainable for both iOS and Android devices and the novel MasterCard Send services will be available to the wallet. The chairman along with other Directors attend the AGM plus there are available as well for the answering all questions. The bank is at all times watchful along with conscious of its regulatory plus statutory obligations regarding distribution of information to its stakeholders.   

     

     

     

    References

    Al-Gasaymeh, A., 2016. Bank efficiency determinant: Evidence from the gulf cooperation council countries. Research in International Business and Finance38, pp.214-223.

    Al-Muharrami, S. and Murthy, Y.S.R., 2017. Interest banking spreads in Oman and Arab GCC. International Journal of Emerging Markets12(3), pp.532-549.

    Alqallaf, H. and Alareeni, B., 2018. Evolving of Selected Integrated Reporting Capitals among Listed Bahraini Banks. Journal of Accounting and Applied Business Research1(1), pp.1-21.

    Al-Sartawi, A.M.M., Alrawahi, F. and Sanad, Z., 2017. Board characteristics and the level of compliance with IAS 1 in Bahrain. International Journal of Managerial and Financial Accounting9(4), pp.303-321.

    Aribi, Z.A. and Arun, T., 2015. Corporate social responsibility and Islamic financial institutions (IFIs): Management perceptions from IFIs in Bahrain. Journal of Business Ethics129(4), pp.785-794.

    Bbkonline.com. (2019). Bank of Bahrain And Kuwait to soon introduce a new electronic remittance service through the MaxWallet App! - Welcome to BBK. [online] Available at: https://www.bbkonline.com/MediaCenter/Pressreleases/Pages/New-electronic-remittance.aspx [Accessed 21 Aug. 2019]. 

    Bbkonline.com. (2019). BBK- Annual Report 2018. [online] Available at: https://www.bbkonline.com/annualreport2018/ [Accessed 21 Aug. 2019].

    Bbkonline.com. (2019). BBK is soon to introduce instant card issuance and instant statement printing solutions at its branches - Welcome to BBK. [online] Available at: https://www.bbkonline.com/MediaCenter/Pressreleases/Pages/cardissuance.aspx [Accessed 21 Aug. 2019]. 

    Buchari, I., Rafiki, A. and Al Qassab, M.A.H., 2015. Awareness and attitudes of employees towards islamic banking products in Bahrain. Procedia Economics and Finance30, pp.68-78.

    Ganesh, A., 2019. Co-ordination of Training Activities: Travails and Imperfections. Asian Journal of Management Cases16(1), pp.113-136.

    Ganguli, S. and Matar, R.H., 2016. A sample survey analysis of the effectiveness of training and development initiatives in Bahrain’s financial sector on employability of Bahraini nationals in 2015. World Journal of Entrepreneurship, Management and Sustainable Development12(4), pp.359-383.

    Hesse, H. and Poghosyan, T., 2016. Oil prices and bank profitability: evidence from major oil-exporting countries in the Middle East and North Africa. In Financial Deepening and Post-Crisis Development in Emerging Markets (pp. 247-270). Palgrave Macmillan, New York.                  

    Hinojosa-Pareja, E.F. and López-López, M.C., 2016. Impact of intercultural teaching induction training. A review of research. Convergencia Revista de Ciencias Sociales, (71).

    Khalid, A.A., Haron, H., Sarea, A.M. and Masron, T.A., 2018. The Role of Shariah Supervisory Board on Internal Shariah Audit Effectiveness: Evidence From Bahrain. Academy of Accounting and Financial Studies Journal22(5), pp.1-15.

    Rahman, R.A., Saimi, N.S. and Danbatta, B.L., 2016. Determinants of ethical identity disclosure in Islamic banks: an analysis of practices in Bahrain and Malaysia. Jurnal Pengurusan (UKM Journal of Management)46.

    Srairi, S., 2018. Determinants of Corporate Risk Disclosure Practice: The Case of Islamic Banks in Gulf Cooperation Council Region.

    Zahlan, R.S., 2016. The Making of the Modern Gulf States: Kuwait, Bahrain, Qatar, the United Arab Emirates and Oman. Routledge.

     


    [] Bbkonline.com. (2019). Bank of Bahrain And Kuwait to soon introduce a new electronic remittance service through the MaxWallet App! - Welcome to BBK. [online] Available at: https://www.bbkonline.com/MediaCenter/Pressreleases/Pages/New-electronic-remittance.aspx [Accessed 21 Aug. 2019]. 

    [2] Zahlan, R.S., 2016. The Making of the Modern Gulf States: Kuwait, Bahrain, Qatar, the United Arab Emirates and Oman. Routledge.

    [3] Al-Gasaymeh, A., 2016. Bank efficiency determinant: Evidence from the gulf cooperation council countries. Research in International Business and Finance38, pp.214-223.

    [4] Bbkonline.com. (2019). BBK is soon to introduce instant card issuance and instant statement printing solutions at its branches - Welcome to BBK. [online] Available at: https://www.bbkonline.com/MediaCenter/Pressreleases/Pages/cardissuance.aspx [Accessed 21 Aug. 2019]. 

    [5] Alqallaf, H. and Alareeni, B., 2018. Evolving of Selected Integrated Reporting Capitals among Listed Bahraini Banks. Journal of Accounting and Applied Business Research1(1), pp.1-21.

    [6] Srairi, S., 2018. Determinants of Corporate Risk Disclosure Practice: The Case of Islamic Banks in Gulf Cooperation Council Region.

    [7] Al-Sartawi, A.M.M., Alrawahi, F. and Sanad, Z., 2017. Board characteristics and the level of compliance with IAS 1 in Bahrain. International Journal of Managerial and Financial Accounting9(4), pp.303-321.

    [8] Bbkonline.com. (2019). BBK- Annual Report 2018. [online] Available at: https://www.bbkonline.com/annualreport2018/ [Accessed 21 Aug. 2019].

    [9] Ganesh, A., 2019. Co-ordination of Training Activities: Travails and Imperfections. Asian Journal of Management Cases16(1), pp.113-136.

    [10] Hinojosa-Pareja, E.F. and López-López, M.C., 2016. Impact of intercultural teaching induction training. A review of research. Convergencia Revista de Ciencias Sociales, (71).

    [11]Ganguli, S. and Matar, R.H., 2016. A sample survey analysis of the effectiveness of training and development initiatives in Bahrain’s financial sector on employability of Bahraini nationals in 2015. World Journal of Entrepreneurship, Management and Sustainable Development12(4), pp.359-383.

    [12] Buchari, I., Rafiki, A. and Al Qassab, M.A.H., 2015. Awareness and attitudes of employees towards islamic banking products in Bahrain. Procedia Economics and Finance30, pp.68-78.

    [13] Khalid, A.A., Haron, H., Sarea, A.M. and Masron, T.A., 2018. The Role of Shariah Supervisory Board on Internal Shariah Audit Effectiveness: Evidence From Bahrain. Academy of Accounting and Financial Studies Journal22(5), pp.1-15.

    [14] Aribi, Z.A. and Arun, T., 2015. Corporate social responsibility and Islamic financial institutions (IFIs): Management perceptions from IFIs in Bahrain. Journal of Business Ethics129(4), pp.785-794.

    [15] Rahman, R.A., Saimi, N.S. and Danbatta, B.L., 2016. Determinants of ethical identity disclosure in Islamic banks: an analysis of practices in Bahrain and Malaysia. Jurnal Pengurusan (UKM Journal of Management)46.

    [16] Hesse, H. and Poghosyan, T., 2016. Oil prices and bank profitability: evidence from major oil-exporting countries in the Middle East and North Africa. In Financial Deepening and Post-Crisis Development in Emerging Markets (pp. 247-270). Palgrave Macmillan, New York.                  

    [17] Al-Muharrami, S. and Murthy, Y.S.R., 2017. Interest banking spreads in Oman and Arab GCC. International Journal of Emerging Markets12(3), pp.532-549.

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