MEET THE CEO: Leave it better than you found it

Dr Bernd Van Linder believes that even if things look great, there is always a way to make them better.

Dr Bernd Van Linder, chief executive officer of Commercial Bank of Dubai (CBD), has a tried and tested method when it comes to business excellence. Every morning on his way to work, he asks himself what he can do to make CBD a little bit better for everyone.
"I have an internal drive to leave things in a better shape than I first found them in," he says. "This is true for everything that I do. Even if things look great, there is always a way to make them better. If I can make it a little better each day, then at the end of the year, it will certainly be a lot better in a broader sense for our customers, employees, and shareholders."
Speaking at the latest session of Khaleej Times' 'Meet the CEO' series at the newspaper's head office in Dubai, van Linder highlighted the importance of self-motivation on the job, adopting new technologies, and the state of the UAE's banking sector.
"One of the most important parts of my job is talking to people; I don't believe in hierarchy, and the people that I work with know this," he said. "When they want to talk to me, they come to me directly and we talk business. We have different nationalities working at the bank, making a very diverse workforce. What I practice in my interactions with everyone is a simple matter of respect. In my experience, if you are respectful to others and don't try to impose your opinion on them, things will work out."
 
An AI on digitisation
Van Linder, who is a PhD holder in Artificial Intelligence (AI), started his banking career with ABN Amro, before moving to Saudi Hollandi Bank (now Alawwal Bank) in the Middle East. Looking back at his time at both organisations, he noted that the biggest difference between a big organisation and a small organisation is the risk that a big organisation can take.
"I spent 10 amazing years in Saudi Arabia; they were a massive development for me and I learned how to handle difficult situations from different perspectives. Ever since my time in KSA, I go by one rule - if I can't explain why I am doing something to my mother and to my chairman, then I probably shouldn't do it; and this has worked extremely well for me."
Asked about his time at CBD and the progress of the bank's digitalisation, he said: "A lot has happened in digital, especially at CBD, but in a way, what banks have done so far has been the easy part. It has mainly been the digitalisation of the customer facing format. The biggest impact of digitalisation will be the digitisation of back-end processes. This will have a massive impact on improving the bank's productivity, efficiency, and customer experience."
Every bank in the world, he noted, is focused on getting their back-end processes digitised. Phase one - involving digital services for customers - has already been completed by many banks, but the next phase, which is end-to-end digitisation, is going to prove to be a bigger challenge. Going deeper into the subject, he explained that when it comes to AI, what is happening today is that simple processes are disappearing.
"The first step is automation, but very soon, such processes will disappear completely. I think that in some areas of banking, certain jobs will disappear completely. Everything that can be standardised, will ultimately end up being automated," he said.
However, he was also quick to point out that while many jobs will disappear, the nature of certain jobs will also begin to change. "If we get our automation right, you will end up with less issues. But, if you do need to talk to someone about an issue, then it will have to be a person who is more skilled, and with a greater knowledge of everything, than was previously employed. Jobs will be more of an advisory nature in the aftermath."
 
VAT goes around
On the topic of value added tax (VAT), van Linder said that banks have to be ready for it, for there is no alternative. "We are well prepared for VAT, and will charge VAT on non-interest components. I think that the five per cent VAT is absolutely the right thing to do for a maturing economy. From our perspective, the legislative clarifications are very good, and we are comfortable with the deadline. I think that people will grumble a little bit in the beginning, but they will ultimately accept VAT and move on. I don't think that VAT will be the last tax; I think that there will be more taxes incoming in the future."
Sharing his experiences on hiring people for the company, he said: "One thing that I have learnt about hiring is that when you have even a little bit of doubt, don't do it. It's important to wait until you are 100 per cent sure, before hiring the person. Experience and the right attitude are also what you should look for, and passion and energy are very important. Also, if a person does not have the motivation, then no matter how experienced they are, it is not going to work out."
Asked if he had any advice for young bankers, he cautioned them not to rush into any big decisions and changes. "Learn to listen; use your first couple of weeks to meet people within and outside the bank. You might think that you need to get in and start changing things left, right, and centre; but it is better to wait and understand what you have gotten yourself into, before you start doing things differently."
"Since the beginning of my career, there have been a lot of people from whom I have learnt a lot," he continued. "I believe that whoever you meet in life, there is something that you can learn from them. You might need to dig a little deeper with some people, but there is always something there to learn."
 
The next big thing in banking? Why, it's blockchain
Dr Van linder believes that blockchain is the technology that has the potential to make the biggest impact on the banking sector in the near future.
"You will probably see a lot of commercial variations of blockchain in the coming years; perhaps not a fully distributed model, but if you do get it set up in the right places, then it will have a massive impact on how people do business," he explained.
"I also think that if you properly implement blockchain, then you won't need currency exchanges anymore. I am not sure that blockchain can penetrate into areas that involve massive real-time type of transactions, though." The CEO was also very blunt about cryptocurrencies, saying that he believed that the only reason someone would want to transact through cryptocurrency is because they want to do something that may not be legally permissible.
"Banks are today probably one of the most commoditised industries that I know," he observed. "The only difference is in the service, and the service is tied to the people that work there. Banks have to be diversified; this is the lesson I took away from the global financial crisis. Banks that suffered the most during the crisis were the ones that were not diversified. When I look at the UAE economy today, I think that it is doing well."
Van Linder expects UAE's economic growth to triple next year. This is good news for every sector, including the banking sector, he said. "UAE banks are well capitalised and there is sufficient liquidity, and on the whole, the UAE banking sector is in good health. We expect credit growth to be in line with GDP growth, both this year and next year. Our focus now is on ensuring that CBD, as a whole bank, will go completely digital in the coming years. As far as 2018 is concerned, that is the year where we will bring the bank back to basics."
Asked if there was a future where customers wouldn't even need to go to a bank branch, he said: "I don't think that bank branches will ever disappear entirely, especially for smaller and medium-sized banks who depend on them to provide services and support to customers. Branches however, will change to include more automation that will help customers."
- rohma@khaleejtimes.com

Rohma Sadaqat

rohma@khaleejtimes.com