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 over $ trillion, nearly 320% of global GDP.4 While household debt has seen a gradual increase (3% growth per annum), the real growth in debt lies with governments, financial institutions and corporates. In particular, government debt has doubled since 2008, from $ trillion to $ trillion, especially with governments in developed economies having borrowed heavily over the past few years. Among OECD countries, Japan, Greece, Italy, Portugal, Belgium, France, Spain and the UK now all have government debt that exceeds their GDPs.5 This extended period of historically low interest rates has also enabled corporates from around the world to take advantage of cheap debt. Global corporate debt has also nearly doubled over the past decade, from $ trillion to $ trillion, even Central Bank of Kuwait - Public ‫ عام‬- ‫بنك الكويت المركزي‬  -4-  surpassing the increase in government debt.
The bank proved incredibly successful, leveraging its brand affinity and customer loyalty to acquire over 300,000 customers within their first 24 hours, one million within five days, and reaching six million customers within a year. 14 Thus, within a year of opening, Kakao Bank had a third of the number of customers of Shinhan Bank, the largest bank in South Korea. This was despite the fact that Central Bank of Kuwait - Public ‫ عام‬- ‫بنك الكويت المركزي‬  - 10 -  financial inclusion in South Korea was already at 95% at the time. You can imagine how long will it take for Kakao Bank to become the largest bank in the country. This example demonstrates that banks cannot take customer loyalty for granted. They need to ensure that customers engage with them not because they have to, but because they want to. And the only way to ensure that is by not only understanding customers, but also becoming central to their evolving needs. ii. Battle for Value To win the battle for customer loyalty, banks must provide value, which is the second battle. Winning this battle requires banks to adopt 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.