a more proactive approach when positioning themselves with respects to their customers. it is not enough to be on the sidelines as, say, a purely auto financing or mortgage provider. banks need to position themselves at the center of the ecosystem, providing their customers with the best products, services and advice as and when customers require. according to the accenture study, 48 % of customers said they wanted relevant advice and product information from their banks as they go about their daily lives. they also want banks to play a supporting role in the purchasing process for products such as a house or new car, and even related services such as insurance. banks need to focus on providing long - term value for customers, rather than viewing them as a short - term opportunity for sales. we have already seen the harmful impact of this ‘ short - term ’ outlook that led to the subprime - mortgage crisis, as banks sold mortgages to customers who couldn ’ t afford them. banks ’ profits surged in the short term, but everyone suffered in the end ; not only customers and the broader economy but also the banks. banks therefore need to revisit their value propositions towards their customers in order to ensure that they are truly providing the products and services their customers need while keeping the interest of their customers and the society in central bank of kuwait - public عام - بنك الكويت المركزي - 11 - mind. it will be helpful for the industry to reflect upon its ultimate objectives – to ensure inclusive prosperity and put the welfare of society on a sustainable footing. iii. battle for efficiency to win over customers and provide value, banks must operate in an efficient and intelligent manner, with their limited resources optimally deployed. the battle for efficiency is the third of the battles that banks need to win. a critical front in this battle is the leveraging of technology and data. banks need to use available data to improve their predictive analysis, not just for operational efficiency and planning, but also for insights into customer behavior and preferences. what is particularly surprising to me is that banks, though custodians of vast quantities of customer and transactions data, are not utilizing it effectively. banks will need to change the way they segment customers, not by their income levels or types of accounts, but potentially by their life cycle, growth potential, and behavior patterns. data analysis can provide a bank with actionable insights into multiple factors that impact its business, allowing it to

. i will begin with a brief overview of the major challenges that the industry faces today. second, i will reflect on the key areas that banks will need to focus on in order to stay relevant. finally, i will touch upon the role that enabling stakeholders need to play to support the banking industry through its transformative journey. 1 - challenging operating environment so, let me start with a brief discussion on the key challenges that the banking industry faces today. three challenges are particularly worth highlighting : the state of the global economy ; the revolution in financial technology ; and the rapidly evolving needs and expectations of customers. i. global economy first, let us look at the global economy where headwinds are intensifying. the imf has twice lowered its global growth projections for 2019 to 3. 2 %, with developed economies expected to grow at a much slower rate of 1. 9 % 1. a key driver of this slowdown is the economic uncertainty brought about by rising trade tensions and protectionist policies. if trade tensions continue, the imf may central bank of kuwait - public عام - بنك الكويت المركزي further revise down its economic growth projections. the bank of england estimates that a 10 % increase in tariffs between the us and its trading partners could lead to a reduction of 2. 5 % in us gdp, and 1 % in global gdp excluding the us. 2 in its recent publication, the institute of international finance ( iif ) also highlighted economic policy uncertainty as a key risk to business sentiment. the iif estimates that economic policy uncertainty in both the us and china is at a record high, and its impact is being felt in terms of reduced investments and lower consumption. 3 we have already seen the impact of trade disputes and attendant economic uncertainty on markets across the globe. prominent indices such as the dow jones industrial average, s & p 500, nasdaq composite, ftse 100 and the nikkei 225 have declined by an average of around 7 % in mid - august, from highs in july. another factor linked to the economic outlook is the role of monetary policy. economic growth in the last decade has mainly been driven by the use of unconventional monetary policies. while these policies have supported economic recovery following the global financial crisis, by ensuring a low interest rate environment, they have led to other unintended consequences like fueling debt levels across the globe. thanks to low interest rates, global debt has ballooned to