How financial institutions in the Middle East can leap-frog competitors by being agile

Agile in the context of business has been referred to over the last couple of years, but what exactly does it mean?

The definition of agile by BCG is a team-centered, iterative, and cross-functional approach that can be applied across industries and business contexts. Agile prioritises speed, autonomy, and collaboration to unlock the hidden potential of organizations. The key to getting agile right is that it starts at the top.

Looking towards Middle Eastern financial institutions (FI), forward-thinking institutions are seeing that agile fits very well given the cultural affinity toward teamwork, alignment, and community – all of which are key to successful agile implementations.

Agile looks different in Middle Eastern FIs than it does in global counterparts, but it is based on the same fundamental agile principles of rapid delivery of value to customers and empowering teams. These forward-looking institutions are using agile ways of working to leap-frog their competitors by delivering truly customer-oriented solutions faster and with higher customer satisfaction.

In our experience, among other benefits, FIs around the world can expect two to four times faster go-to-market and 10-20 percent higher customer satisfaction using agile ways of working.

Like FIs everywhere, Middle East FIs must overcome challenges in empowerment, flattening hierarchies, and adopting new models of governance and funding. Applying agile “front-to-back”, eg. from sales to IT, to ops for an entire product vertical, and across the organisation has enabled our FI clients in the Middle East to outperform their competitors through disruptive innovation and rapid time-to-market.

We partnered with a leading GCC Islamic bank to turbo-charge its digital innovation by applying agile front-to-back. As a result, it became the first Islamic bank globally to launch instant personal loans via a mobile app and the first in the market to digitally onboard customers using a mobile app.

Opportunity: Teamwork

Teamwork and collaboration are very important in Middle Eastern cultures. This affinity works very well when moving toward an agile teaming approach.

Agile teams become a true home for the team members and the most effective teams bond over both work and social experiences. This caring aspect of membership in agile teams drives significant productivity improvements as people support each other to accomplish the goals of the team. This is also one of the crucial reasons behind small teams’ sizes – typically 6-10 people – in agile. If the team is too large, the team members cannot bond with each other as a whole team. As small teams work together, they develop trust and social connections.

The social aspect resonates very well in Middle Eastern FIs and we have seen this drive very positive results in clients where teams have bonded and learned to deliver together even virtually, despite Covid.

As small teams work together, they develop trust and social connections

Challenge: Flattening hierarchies

When it comes to hierarchies, Middle Eastern FIs are no different than FIs in other regions. In traditional organisations, layers and hierarchies and the accompanying pure-managers are needed to ensure alignment and control over the work.

In agile organisations, teams are empowered through their alignment to organisational purpose and strategy, and there is less of a need for layers of pure managers. Empowerment is unlocked through some of the rights and powers that had been held by pure management being assigned to the teams.

With these rights and powers, teams can act much more quickly than in a traditional set-up. Removing these layers is a challenge in most organisations but is also one of the keys to unlock agile empowerment, which in turn drives the productivity increases we see at FIs we’ve worked with in the Middle East.

Opportunity: Alignment

Aligning to a common purpose is a hallmark of agile organisations. It is this alignment to the purpose and strategy of the organisation that allows leaders of the organisation to empower teams since they know that the teams understand fully the objectives and key results they are trying to achieve.

The strong sense of community in the Middle East permeates FIs as well. This means that people are inclined toward alignment of purpose, if engaged. Engagement is the key. Often traditional organisations, with many layers between top-leaders and the team members, are unable to connect team members fully to the purpose and strategy of the organization.

During one agile transformation at a Middle East FI, leadership used this as a unique opportunity to engage with team members regularly and deeply. This interaction between team members and senior leaders both created a clear sense of purpose and allowed leaders to accelerate customer value creation by removing obstacles to the team’s success.

Middle East FIs must overcome challenges in empowerment, flattening hierarchies, and adopting new models of governance and funding

Challenge: Governance and funding

Deciding what to work on and how much to invest in each initiative is the core job of many managers and executives in organisations. In some organisations, this is so exaggerated that many people are promoted solely based on their ability to maneuver through the system and secure approval and funding for their projects, regardless of how much value they truly add to the organisation.

In agile organisations, governance and funding are reformed to refocus on the customer value of each initiative and ensure the organisation is working only on things that are aligned to its purpose and strategy.

These considerations apply as equally to organisations in the Middle East as they do in other parts of the world. One Middle East FI we worked with used agile governance and funding techniques to dynamically prioritise the features of its new flagship digital banking product. This ensured that the team was always focused on delivering the features that customers needed and could immediately use in their day-to-day banking engagement.

Agile does not look the same everywhere it is implemented. This goes for organisations in the Middle East just as well as those in Asia, the Americas, or Europe.

Each region and each country is challenged differently when adopting agile ways of working. These challenges can be overcome with good planning and clear agile principles against which to design and build the organization of the future.

Agile transformations typically start with a lighthouse that shows the way for the rest of the organisation with maximum impact achieved when agile is working holistically, “front-to-back” throughout the FI.