The improved digital experience resulted in a Digital Engagement Index of 96.4% during 2021. Additionally, digital channel traffic for financial transactions increased by 60%, and for non-financial transactions by 70%, compared to the previous year.
Abdullah bin Ali AlKhalifa
Chief Executive Officer
2021 was an extraordinary year of recovery and growth across the globe. In the Kingdom of Saudi Arabia, a focus on non-oil economic activity spurred the economy forward with banks and other financial institutions playing a major role in the Kingdom’s ongoing transformation, especially with regard to the digital enablement of Saudi Arabia’s cashless ecosystem.
To keep pace with a landscape that was rapidly changing as a result of the ongoing COVID-19 crisis, Alinma Bank fast-tracked the introduction of its 2021-2025 strategy, which strives to position Alinma as the fastest and most convenient bank in the Kingdom. The strategy is focused on digitalization and process automation as catalysts for improved customer experience and faster turnaround times. The efficiencies achieved through this approach, have driven new customer acquisition and increased digital adoption across the Bank’s entire customer base.
Alinma Bank will continue to push toward a digital future that serves its customers and that serves the Kingdom, as a whole, through the Vision 2030 initiative. Of particular importance will be adoption of artificial intelligence (AI), introduction of new digital products, increased online services, expansion of digital branches, and digitally enhancing the user experience. Furthermore, Alinma will look to capitalize on opportunities related to large and mid-sized corporates, project finance across diversified sectors, SMEs, cash management, and trade finance.
As for 2021, execution was the primary focus, with the understanding that in order to offer the most innovative banking products and services, key initiatives had to be delivered. These included digitalizing Alinma products and services, such as online financing, virtual cards, IPS (Sarie), and card printing services, while simultaneously improving the digital customer journey for all digital services. The Bank also invested in digital platforms and infrastructure to handle increased demand for digital services. As a result of its commitment to execution, Alinma was able to provide its customers with seamless, uninterrupted service, despite the challenges posed by the pandemic.
Alinma’s digital platform enables its customers to manage their financial activities from multiple digital channels including smartphones, as well as the Bank’s retail and corporate internet banking services. The improved digital experience resulted in a Digital Engagement Index of 96.4% during 2021. Additionally, digital channel traffic for financial transactions increased by 60%, and for non-financial transactions by 70%, compared to the previous year.
The Bank also continued to emphasize new customer acquisition, with special focus on digitally savvy affluent and high-net worth customers and digitally savvy youth. Moreover, there was a significant surge in digital adoption, with over three million customers connecting through the Bank’s digital platforms, nearly 150 million times, resulting in three billion financial and non-financial transactions and inquiries. Furthermore, approximately 1.2 million active smart device application users performed close to 46 million fund transfers in 2021, constituting 98% of payments made by customers.
To drive its digital strategy, Alinma hired a chief digital officer and established a digital factory as the nucleus of the Bank’s digital innovation efforts, with a mandate to scale customer experience and operational excellence throughout the Bank, and to own Alinma’s digital strategy. In 2021, the Bank also adopted Robotic Process Automation (RPA), which automates manual processes and procedures, thus significantly reducing human errors and operational costs. Advanced Analytics (AA) and AI were also employed to enhance decision-making, and to facilitate cross-selling, behavior scoring, and asset utilization. And in terms of forward facing activities, Alinma deployed 70 new digital zones in its branches, deployed its Field Sales Mobility service, and launched a point-of-sale (POS) management system to facilitate POS sales and after sales activities for Alinma’s 100,764 POS terminals across the Kingdom.
In 2021, Alinma Bank worked with the Saudi Central Bank (SAMA) and the Gulf Payments Company (GPC) to become one of the first Saudi banks to join the AFAQ network, which accelerates cross-border transfers within the Gulf Cooperation Council (GCC) by connecting to real-time gross settlement (RTGS) platforms. Data security also remained a top priority, with the Bank establishing a comprehensive security strategy and road map, under which multiple initiatives were implemented to strengthen security and to ensure compliance with SAMA regulations.
Alinma’s financial strength and resilience was reflected in its 2021 financial performance, with a cost/income ratio of 35.5%, ROE of 10.8%, and ROA of 1.6%. An improvement in credit quality was evidenced by Alinma’s NPL coverage, which increased by 55% YoY to 177%, with NPLs amounting to 1.75%, a decline of 30% YoY. Customer deposits increased by 14% YoY. The Bank’s shares became the second largest traded stock in the Kingdom in terms of volume and value, with a market capitalization of SAR 48 Bn. as at 31 December 2021, showcasing investor confidence and trust in the Bank.
The health and well-being of employees and customers remained paramount throughout the year, and Alinma strictly adhered to government protocols to ensure a safe working environment. By coordinating with health authorities, the bank facilitated the vaccination of its employees during the year, while strengthening its staff communications, and facilitating work-from-home and shift-based work arrangements for staff.
In accordance with the Saudization program of the government, Alinma achieved a Saudization Level 1 ranking for 2021, by implementing recruitment and training programs. Furthermore, to increase the number of female recruits, the Bank established a “Women Empowering Department” which succeeded in increasing the number of female recruits to 16% of the workforce in 2021, compared to 12.5% in 2020.
Working towards the social well-being of all, the Bank allocated 1% of its annual profits for corporate social responsibility (CSR) projects and continued to support and uplift SMEs through its dedicated services, especially through the Kafalah program. Some of the key CSR activities conducted during the year included, blood donation campaigns, donations to public charities, sponsorships, and educational and awareness programs.
In an extraordinary year, Alinma has stood strong, recording a commendable performance. Going forward, the Bank will continue to champion Vision 2030 through its own efforts to be the most digitally advanced, fastest, most innovative, Shariah-compliant bank in the Kingdom.
In closing, I extend my deep gratitude to the Custodian of the Two Holy Mosques, King Salman bin Abdulaziz Al Saud, and HRH Crown Prince Mohammed bin Salman bin Abdulaziz Al Saud, for their efforts to serve and safeguard the Kingdom. I wish to express my appreciation to the Bank’s staff for their dedication and commitment. I am grateful to our customers for their continued patronage and trust in Alinma Bank. I extend my appreciation to the Chairman and the members of the Board of Directors for their invaluable guidance and conscientious stewardship of the Bank. I am thankful to the Bank’s Shariah Committee for their continued support and valuable contributions to Alinma’s Shariah-compliant banking mission. And lastly, I am grateful to the Saudi Central Bank (SAMA) and the supervisory and regulatory authorities for the guidance and support extended.
Abdullah bin Ali AlKhalifa
Chief Executive Officer