Emirates NBD December 2019

‘THE VANGUARD OF THE MIDDLE EAST’

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THE VANGUARD OF THE MIDDLE EAST WRITTEN BY

AMBER DONOVAN-STEVENS PRODUCED BY

JORDAN HUBBARD

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E M I R AT E S N B D

RICHARD MORTON, ASSOCIATE VICE PRESIDENT FOR LEGAL, EMIRATES NBD, DETAILS THE BANK’S MOVE TO DIGITAL AND HOW THIS CONTRIBUTES TO DUBAI’S PAPERLESS FUTURE

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mirates NBD is currently undertaking one of the largest and most accelerated digital transformations globally in its drive for

innovation as a global player based in the Middle East. As the company unveils two of its new digital banks, Richard Morton, Associate Vice President for Legal, details how the company is at the forefront of Dubai’s competitive edge. Before Emirates, Morton worked for DHL from 2000 to 2012, starting out at the company’s IT headquarters in San Francisco. His role took him to Brussels and, not long after Deutsche Post bought DHL, the company opened a state-of-the-art data centre in Prague, where Morton relocated to lead the legal team. From there he went to IBM in 2013 and, at the start of 2019, moved to Emirates NBD in order to assist with its digital transformation and, more specifically, digital banking and the GDPR transformation.

— Richard Morton, Associate Vice President for Legal, Emirates NBD

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One of Morton’s critical responsibilities is to ensure that the company’s technology transformation is viable in the market from a regulatory perspective. “For example, we have an initiative for electronic transactions with a significant real estate company here in Dubai, and the courts that have jurisdiction over these particular transactions have agreed in principle to the structure of the proposal. Part of our responsibility is to ensure that we liaise with the relevant Ministries w w w.e mi ra te snbd.c om /en

E M I R AT E S N B D

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“ We invest a lot of time and resources into cybersecurity, privacy and confidentiality” — Richard Morton, Associate Vice President for Legal, Emirates NBD

to ensure its viability, even though the transaction structure may not be explicitly provided for in the relevant statutes.” Emirates NBD wins numerous awards every year, often for technological advancements and innovations, and Morton attributes this to the radical overhaul of the company’s infrastructure. “CIO Miguel Rio Tinto has been running full-speed ahead for the last two and a half years on completely transforming the infrastructure.

We’re expecting to complete this prior to Expo 2020, and this is a significant milestone for us,” says Morton.

CLICK TO WATCH : ‘DISCOVER A WORLD OF INNOVATIONS THAT PUT YOU FIRST’ 07

BECOMING “THE TECH COMPANY THAT OFFERS BANKING”

“It was a very deliberate choice to

The philosophy at the heart of Emirates’

make Liv and E20 separate brands

vision can be encompassed by a phrase

from the ENBD. The idea is to provide

often said by CEO, Shayne Nelson:

a user experience that provides a

“We shouldn’t be a bank that does

much wider platform than traditional

tech, we should be a tech company

banking. Liv and E-20 accommodate

that does banking.” To build upon this

younger generations that are more

ethos, Emirates NBD created two

attracted to the variety of services

new digital banks: Liv, a digital lifestyle

on these platforms, and the ease and

banking app for millennials, which

speed of digital banking.” As Morton

was launched in 2017; and E20, which

states, the need for banks with which

launched at the end of September

users can personally identify with is the

2019, designed for SME enterprises.

future, and this approach has clearly

“These were created because there

been successful as Liv already has

was a demand for them,” says Morton.

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E M I R AT E S N B D

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over 300,000 clients, with that number

use of the data on those platforms. AI

rapidly rising. “This shows us that

is a great tool and it will only become

there was demand and we are meeting

more interesting as its analytical capa-

that demand.” Both of these platforms

bilities become more advanced, but

harness AI and Big Data to better

GDPR needs to be embedded into the

understand customer behavior and

DNA of the company because the risks

provide a more tailored experience,

are enormous. The sole purpose of AI

but Morton notes that there will of

and the use of Big Data is to improve

course always be regulatory chal-

the client’s experience, and we cer-

lenges around this. “GDPR is a huge

tainly invest a lot of time and resources

variable when looking at various

into ensuring an excellent client expe-

platforms, and companies should be

rience, but we also invest a lot of time

very cautious and deliberate about how

and resources into cybersecurity,

they access these platforms and the

privacy and confidentiality.” It is this

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E XE CU T I VE PRO FI LE

Richard Morton Richard Morton worked for DHL from 2002 to 2012, starting out at the company’s headquarters in San Francisco. His role took him to Brussels and not long after Dutch Post bought DHL, it opened a state-of-the-art data centre in Prague, where Morton relocated in order to head the legal team.

From there, he went to IBM in 2013 and, at the start of 2019, moved to Emirates NBD in order to assist with its digital transformation and more specifically, digital transactions and GDPR transformation, as Associate Vice President for legal.

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Open Banking Gains Momentum in the Middle East

Richard Ransom Head of Payments and Transaction Banking, Europe & Middle East, Virtusa

Open banking is now a reality

The term ‘open banking’ covers a wide range of activity, broadly around banks opening up access to data and services through open Application Programming Interfaces (API).

This could be bank-controlled third party access for FinTech collaboration, direct connectivity for corporate customers, or regulator-controlled access to third party FinTechs, or other banks. Although the open banking concept is relatively new, it has become a major influence on the agenda globally. The UK’s ‘Open Banking’ initiative, has steadily gained momentum since it became available to customers in early 2018 with over 125 third party FinTechs registered to offer payment initiation and account information services. Across Europe, PSD2 is starting to have an impact on payment services, and in Australia, their take on the UK model is close to becoming a reality. Banks are growing their externally facing API libraries, offering services such as instant cash positions to corporate customers.

2019 – a pivotal year for open banking in the Middle East

The open banking revolution is an opportunity for growth. Encouraging progress is being made by regulators, banks and FinTechs in the Middle East region towards adoption. In May this year, National Bank of Bahrain launched open banking services in the country. It was based on the EU’s PSD2 model of enabling account holder permitted third party access to view account and transaction data, and to initiate payments.

In August, UAE’s Emirates NBD certified their first five FinTech startups through their API Sandbox.

To illustrate the potential in the region, In September Dubai International Financial Centre (DIFC) had registered 100 FinTech companies.

Elsewhere, banks in Saudi Arabia are exploring FinTech collaboration, and will soon be able to leverage a new national real-time payment system announced earlier this year.

Making open banking work for the customer and the bank

Even though open banking adoption requires significant innovation investments, it is possible to leverage these investments to obtain a commercial return through new revenue opportunities.

To enable such API-driven services, banks need to make significant changes to their information infrastructures. For many banks, these APIs will become a set of discrete products, addressing a rapidly evolving financial services ecosystem.

Furthermore, by monetizing APIs in a strategic way, banks can protect their market share and disarm the threat of nimble FinTechs. API monetization could simply be in the form of new external APIs bringing new or extended access to bank services such as more timely or detailed transactional data, however, banks are increasingly collaborating with FinTechs to build new joint propositions and improve internal processes.

Open innovation strategies

FinTech collaboration works best when done on purpose. For instance, through an open innovation platform that can facilitate innovation for banks beyond standard sandbox without impacting live systems. Curated FinTechs can be onboarded to help solve internal bank challenges or create new propositions to provide directly to customers.

A ‘building block’ approach to FinTech collaboration can bring greater rewards, creating combinations of different FinTech and bank applications to improve processes such as corporate customer onboarding or KYC ongoing due diligence. Building and testing such solutions at speed and with quality can be achieved through a purpose-built innovation and gamified development platform, such as Virtusa’s Open Innovation Platform. Learn how Emirates NBD leverages Open Innovation Platform to drive better outcomes for its innovation program.

Securing bank systems in the new world

Open banking exposes endpoints in banks to third parties, so requires appropriate levels of audit, control, and monitoring. The current manual auditing and static reporting practices are not sufficient, and given the speed at which threats manifest themselves, an automated continuous API Security Assessment is needed.

Using a dynamic, real-time automated tool to analyze your open banking readiness – quantitatively and qualitatively – is the preferred approach, which provides actionable insights and remediation measures. API security issues highlighted by such tools may require you to refactor the processes, applications, internal policies, and people to reduce the security gaps, and help you integrate with external third parties that you may not have a contractual relationship with.

The fundamental ingredients for the success of open banking in the Middle East are either in place, or at least in planning and consultation stages. To make this an opportunity to modernize, compete, and monetize, banks need to look front to back at their systems, processes, security, and their approach to collaboration with FinTechs and technology providers. Regulators need to work with financial services organizations too, as open APIs evolve over time to match customer expectations.

Enhance your digital future with open banking innovation At a scale and speed that defies traditional IT infrastructure

Learn More

Download Virtusa’s latest Open Banking white paper to learn why monetizing Open Banking APIs is vital for long-term success.

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passionate drive to cater to customer

documented and mitigated, but they

demand and its diligence with regula-

will never be eliminated.”

tory challenges that Morton believes

With such a large transformation

gives Emirates NBD its competitive

underway, it is unsurprising that change

edge. The same cautious approach

management is being carried out with

is applicable to cloud capabili-

great care. “When you’re dealing with

ties. “There is still concern around the

the huge number of changes that we

cloud and how information is secured,

are going through, it’s important to

even more so for a bank,” Morton

have great leadership, not just from

explains. “It’s important for us that

the top down, but at all levels,” he

the legal department compliments the

says. “The first step to change is that

facilitation of new ideas. Tech moves

there is a belief that this is the right

much faster than law and we have to

thing to do and, on the ground level,

ensure that the risks are well analysed,

that we all believe in it. Everyone here w w w.e mi ra te snbd.c om /en

Business is about people Condo Protego is the leading regional IT infrastructure and information management solution provider. With an impressive client list that includes some of the largest organizations in the region, Condo Protego is the partner of choice for these organizations to support them on their digital transformation journeys and is one of the top partners for DELL EMC, RSA, VMware and Veritas.

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“ Once you really take the physical world out of the equation, you’re dealing purely with digital worlds” — Richard Morton, Associate Vice President for Legal, Emirates NBD

the management of Liv CEO, Jayesh Patel, and Evans Munyuki, CDO and founder of E20, both of whom he describes as “really carrying the innovation of future banking”. As Morton and Emirates NBD move forward, they anticipate the growth of E20 and Liv, and the role that both will play in Dubai’s drive to going paperless. “The government in Dubai has been incredibly innovative and supportive in its promotion of new technologies, and

understands that the banking industry

its drive to be the first truly paper-

is changing fast and is under threat at

less city,” explains Morton. “What’s

every level.” Echoing the sentiments of

most compelling about the future isn’t

CEO Shayne Nelson, Morton says: “we are upgrading the company on a granular level. From the sign-up process through to terms and conditions; everyone is empowered to do what needs to be done to become more relevant, more flexible and more future-proof.”

THE VANGUARD OF THE MIDDLE EAST Morton has been particularly impressed with the speed and accuracy of the transformation. “Miguel has worked incredibly hard and the results show it has been profound across the landscape.” Morton also commends w w w.e mi ra te snbd.c om /en

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E M I R AT E S N B D

1963

Year founded

$2bn+

Revenue in US dollars

10,000

Number of employees

16

1mn+

Active current accounts

just the bank, but the entire region and its regulatory landscape. We’ve been given the opportunity to serve our customers in entirely new ways.”

Morton considers Emirates NBD as “the vanguard of the Middle East” and believes that the bank is well on its way to becoming one of the world’s most innovative banks. “We are at the tip of the iceberg; going paperless is just the beginning, because the fact is that once you really take the physical world out of the equation, you’re dealing purely with

“ When you’re dealing with the huge number of changes that we are going through, it’s important to have great leadership, not just from the top down, but at all levels” — Richard Morton, Associate Vice President for Legal, Emirates NBD digital worlds. In the digital world the capabilities are endless, the opportunities to serve your clients in new and innovative ways are infinite, and this is only going to grow as a trend.” Emirates NBD remains a corporate stronghold in the Middle East and, with its shared vision with the city of Dubai, it will evolve this role into the digital space as a leader on an international level.

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EMIRATES NDB BANK P.O. Box 777 Deira, Dubai United Arab Emirates T 600 54 0000 T +971 4 316 0333 (for outside the UAE) www.emiratesnbd.com/en