MEA Finance - June 2022 by meafinance

June 2022

Historically Modern Fernando Morillo Lopez, Senior Executive Vice President and Group Head of Retail Banking, Mashreq

June 2022

Historically Modern

Fernando Morillo Lopez Senior Executive Vice President and Group Head of Retail Banking, Mashreq

10 Market Focus | 14 ESG – Sustainability | 30 SME Financing | 48 Banking Technology Summit | 61 Awards Winners

Congratulations to all the wi Banking Technolog

e winners of the MEA Finance ology Awards 2022

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In this issue...

warm welcome to our June 2022 issue of MEA Finance. We arrive at the halfway point in the year when, if you live and work in the region, you will feel the heat of the climate which is, or at least was to be expected in the ordinary course things. However, we now live at a time when this normality is being fuelled into exaggerated conditions by the past and present activities of our lifestyles, with the consequences just starting to become apparent. Easing or even fixing the impacts of these changes will take innovation, which is the main theme of the June issue. With climate adversity on all our minds, from page 14, we cover ESG and Sustainability and look at how banking and finance, through innovation in products and service delivery will become important forces in the mitigation of the challenges we face in moving humanity into a cleaner, more sustainable and inclusive world. For the cover feature, from page 34, we talk with Mashreq Bank’s Fernando Morillo Lopez, Senior Executive Vice President and Group Head of Retail Banking, who tells us that from inception, the bank has consistently maintained a position at the vanguard of innovation, with this value persisting, “We certainly believe that embedded finance will be the future of banking”. Coverage of technological innovation makes a huge contribution to this issue, starting with our regular look from page 38, with leading firms opining on the digitisation of finance in Saudi Arabia, how banks need to prepare for uncertainty and where corporate banks need to be prioritising. However, the bulk of our focus on innovation and technology in banking starts from page 48 where the MEA Finance Banking Technology Summit & Awards 2022 receives full coverage, with the theme this year being “Continuing Innovation in Banking and Finance”. Both events were a resounding success, bringing to our audience of delegates from across the region a series cutting edge debates held by a pantheon of leading speakers from the financial and technology sectors; and our coveted Banking Technology Awards recognising the innovation and excellence that puts the Middle East among world leaders in the advancement of banking culture and practice. The topical vein of innovation continues to run through the magazine with coverage of developments in and the vital importance of Data Security from page 26. Then from page 30 we take a look at the increasingly economically significant role of SMEs in the region and how innovation in financing and the creation of enabling environments will assist them in their challenges. Our Market Focus this month features Oman and looks at how innovative reforms have improved the economic prospects for the country. Finally, it is said that challenge and adversity spur our imaginations, motivating and uniting us to drive innovations that improve conditions. If this is true, then reading this issue and learning about the energy being put into innovation just in our sector of the economy, we can be optimistic about future outcomes.

mea-finance.com

CONTENTS

CONTENTS 34

MARKET NEWS

6 8

Gulf International Bank issues inaugural sustainability report Wio Bank announces senior leadership appointments following UAE Central Bank License

MARKET FOCUS

Reform, Revitalisation, Rejuvenation – Oman’s 3R’s

ESG-SUSTAINABILITY

14 18 20 22

The COPs are coming COP27 and COP28: Expectations and implications for investors In Tune With The Times Partnerships in Progress

DATA SECURITY

Double Edged Sword and Shield

SME FINANCING

SME’S - Supporting Middle East Successes

COVER STORY

Historically Modern

BANKING TECHNOLOGY

MEA Finance WEB: www.mea-finance.com EMAIL: info@mea-finance.com PUBLISHED BY: Creative Middle East Media FZ LLE, 19th Floor, Creative Tower, Fujairah Creative City, PO Box 4422, Fujairah, UAE

Banking and Finance news in the MEA market

Digitizing Saudi Arabia’s Banking Markets

The Digital Future of Corporate Banking

The Role of Big Data & Cloud in Banking

SRE: The Best Pit Crew to Help you win the Fierce BFSI Race

Navigating uncertainty: Using New Technologies to Optimize Balance Sheets

MEA FINANCE BANKING TECHNOLOGY SUMMIT 2022

Continuing Innovation in Banking and Finance

8 10 20

BANKING TECHNOLOGY AWARDS 2022

The MEA Finance Banking Technology Awards 2022 announces the outstanding technological achievements in the region’s banking and financial industry

LIFESTYLE

50 Jahre BMW M: The BMW M4 edition model marking the company’s anniversary

48 86 63 mea-finance.com

MARKET NEWS

Gulf International Bank issues inaugural sustainability report Gulf International Bank (GIB) announced that it has published the Bank’s first groupwide Sustainability Report (the Report) which shows GIB’s commitment to sustainable growth and performance against Environmental, Social and Governance indicators

he Report provides an overview of GIB’s strategic approach to sustainability and the Bank’s direct activities and initiatives and discloses them in accordance with the Global Reporting Initiative (GRI) for the year ending 31 December 2021. It also sets out the values and principles that guide the Bank’s behaviours via a Group Sustainability Framework that was adopted in 2021 to ensure that sustainability is embedded in GIB’s approach and offerings. These include sustainability-linked loans to clients,

micro, small and medium enterprise (MSME) financing, advisory on green sukuk issuance and sustainable asset management solutions. Among the Report’s highlights are a number of significant milestones achieved during the year: • 31% reduction in scope 1 & 2 greenhouse gas emissions relative to 2020 • 29.6% female representation in 2021, up from 25% in 2018 • Launch of the Sustainable World Fund, which offers investors the opportunity

Banking and Finance news in the MEA market

to invest in a fully sustainable vehicle • Issuance of a US$625 million Sustainability-linked Syndicated Loan for GIB – the first for a Bahrain headquartered bank and a first for a majority Saudi-owned bank • Incorporation of sustainability in Risk Management and Profiling for all clients – the programme began in 2021 and is being rolled out on a phased basis through 2022 • Introduction of a supplier code of conduct that seeks to ensure the Bank’s supply chain operates on sustainable lines Commenting, Abdulaziz Al-Helaissi, Group Chief Executive Officer of GIB, said, “This time last year, every meeting room at GIB’s HQ had a supply of plastic water bottles. Today, there are none in the building. Reducing plastic and greenhouse gas emissions, and increasing our diversity and inclusion, are only some of the improvements we have made as we aim to become a more sustainable bank. Most importantly, we have begun to offer a set of sustainable finance products to support our client in their own sustainability efforts.” Venetia Bell, Group Chief Sustainability Officer of GIB, added, “We believe that finance can be a force for good. It occupies a unique place in business and commerce with banks, like GIB, acting as enablers of growth and development and influencing and supporting the wider economy. This belief in the important role we have to play underpins our commitment to continuing to strengthen our ESG performance and to leading by example. Our first report affirms that our sustainability strategy is already making material progress and delivering real outcomes for the Bank, our clients and other stakeholders.”

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MARKET NEWS

Wio Bank announces senior leadership appointments following UAE Central Bank License Wio Bank PJSC, established recently in the UAE, has announced the appointment of His Excellency Salem Al Nuaimi as Chairman of the Board and Jayesh Patel as Chief Executive Officer. The leadership appointments follow the license approval by the Central Bank of the UAE.

H.E. Salem Al Nuaimi

Jayesh Patel

io is an integrated digital banking platform jointly owned by Abu Dhabi Holding Company (ADQ), Alpha Dhabi, Etisalat, and First Abu Dhabi Bank (FAB) with an initial capital of AED 2.3 billion. His Excellency Al Nuaimi will bring a wealth of financial industry expertise to Wio through holding several leadership positions at high profile organisations, including serving as board member of ADQ and Managing Director of Abu Dhabi Pension Fund. He was previously Chairman of SEHA – the Abu Dhabi Health Services Company and has held board positions at NYSE-listed AerCap Holdings NV and NASDAQ-listed oil and gas services firm National Energy Services Reunited Corporation (NESR).

As Chairman for Wio, Al Nuaimi will be keenly involved in shaping the platform to be the leading financial partner of choice for businesses and individuals in the UAE. “It’s an exciting time for the banking industry as it grows to adapt to the everchanging needs of customers. Today, we are catering to an audience that is digitally savvy and expects solutions that are intuitive, fundamental, and easy-touse. In Wio, we have a highly evolved and adaptable digital platform that will open new paths for its customers and simplify the process of money management. I am very happy to join the very strong and capable team that is working behind the scenes to bring this innovative digital banking journey to customers in the UAE,” Al Nuaimi said.

Banking and Finance news in the MEA market

One of the region’s leading names in the FinTech industry, Jayesh Patel, will be heading Wio’s strategic growth as Chief Executive Officer. With his vast experience in building on-demand digital solutions and innovative products, Patel spearheaded the creation of Liv., a digitalonly lifestyle bank which quickly became the fastest growing in the country. “Wio is an intelligent, integrated financial platform that will provide innovative solutions tailored to people’s lifestyles and business needs. As an open platform, Wio will partner with local and global providers to facilitate access to tools and services that will support our customers’ life ambitions. The aim is to make banking convenient, transparent, and intuitive, and create a better future for our customers by transforming the way they bank in the region,” said Jayesh Patel. With a vision to simplify banking services for consumers in the country, Wio aims to build its financial and nonfinancial capabilities by teaming up with other FinTech start-ups and leaders in the field to offer customers a fully digital banking experience delivered seamlessly via Wio apps or partners. Wio uses data and AI to develop everyday customer insights that enable companies to grow more effectively and help people of all ages to take personal financial responsibility and elevate their financial future. The first product to be introduced, Wio Business, is a dedicated app for SMEs, entrepreneurs, and freelancers, and will offer a full suite of business banking solutions to small and large companies in the region. With a massive team available to support customers, as well as features such as an easy-to-use dashboard and automated services, Wio Business will equip business owners with the tools and support they need for efficient financial management – all at the click of a button. Wio goes beyond banking, simplifying financial admin tasks for business owners – leaving them free to focus on building their business.

MEA Finance Awards_v3_Outlined.pdf 1 31/05/2022 9:11:06 AM

CMY

Thank you for all your business this year, these achievements are as much yours as they are ours. World’s Best For: Sustainable Finance Public-Sector Contents SMEs

MARKET FOCUS

Reform, Revitalisation, Rejuvenation – Oman’s 3R’s Definitive measures taken by the government to reform the economy and the rally in oil prices on the back of Russia’s war in Ukraine are projected to accelerate economic growth in 2022 to a pace not seen in a decade

man’s economy is on a path to recovery driven by wideranging government reforms, the easing of pandemic pressures and a rally in oil prices that soared to their highest since 2014 in the first quarter of the year. The International Monetary Fund (IMF) said in April that the oil revenues in the Middle East and Central Asia this year will reach $818 billion, an increase of $320 billion from the Washington-based lender’s assessment last October. Following a steep downturn, the oilrich Gulf states—Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE—will see economic growth of 6.4% in 2022 up from 2.7% in 2021, said the IMF. The Sultanate has one of the weakest credits and is more sensitive to volatility in

energy prices compared to its neighbours in the GCC region. However, since taking power in January 2020 Sultan Haitham bin Tariq Al Said has moved to balance the country’s finances and prepare it for a time after oil. Under Sultan Haitham bin Tariq’s Vision 2040, Oman has made significant strides in implementing structural reforms to boost the country’s nonoil economy, drive diversification and spur long-term sustainable growth. The efforts include cutting subsidies, restructuring government and state entities, introducing a value-added tax (VAT) and even planning for income tax, which is expected to be the first for a Gulf Arab state. Oman also introduced several austerity measures last year which helped it

Banking and Finance news in the MEA market

maintain access to the international debt markets. “Frontloaded fiscal reforms, including VAT and cuts in spending are expected to turn the country’s fiscal and current account deficits into surpluses, starting from 2022,” the World Bank said in April. The IMF projected in September 2021 that Oman will record a budget surplus in 2022 after the country’s deficit widened to 19.3% of GDP in 2020.

Path to recovery The rally in oil prices, which jumped to a 13-year high of $130 in March, on the back of Russia’s war in Ukraine has pushed crude above Oman’s break-even level and is projected to accelerate economic growth in 2022 to a pace not seen in a decade.

Sultan Haitham bin Tariq said in March that the Gulf state would spend the windfall from higher oil prices on developmental projects, measures to support economic recovery as well as reduce its debt. Oman posted a budget surplus of $928.5 million (OMR 357 million) at the end of the first quarter of 2022 compared to a deficit of $2 billion (OMR 751 million) during the corresponding period last year, driven by VAT collections and soaring oil prices. Crude oil prices averaged $81 per barrel in the first of the year. The Gulf state approved its 2022 budget in January allocating $32 billion (OMR 12.13 billion) towards expenditures, with a focus on basic public services and stimulating investment. The government allotted an additional $520 million (OMR 200 million) to the current fiscal year’s budget in March to bring total expenditure in the developmental budget this year to $2.9 billion (OMR 1.1 billion). Sultan Haitham bin Tariq also directed the country’s ministry of finance to allocate an additional $1.7 billion (OMR 650 million) for development projects for a five-year plan that ends in 2025. The Sultanate plans to implement and develop a total of 110 investment projects by end of the year and more projects are expected to come from a raft of deals that were signed between Omani and Saudi companies during Crown Prince Mohammed bin Salman’s visit to Muscat last December. Oman’s FY2022 budget, which is based on an oil price of $50 a barrel, projects a deficit of $4 billion (OMR 1.5 billion) or 5% of the country’s GDP. KPMG said that the country’s FY2022 budget represents the first plan of Oman Vision 2040 that aims to achieve financial sustainability while stimulating economic sector diversification. The Gulf state raised a $4 billion (OMR 1.5 billion) in a seven-year syndicated loan from regional and international banks earlier in 2022 and the government plans to use the funding for general sovereign financing and refinancing purposes. Oman is also expected to allot part of

the funds to refinance $6.5 billion in Eurobonds, commercial loans, Sukuk, an export credit facility and an amortizing pre-export financing facility maturing this year. S&P Global revised Oman’s credit rating by one notch to BB- with a stable outlook in April citing higher oil prices, rising hydrocarbon production and the Sultanate’s fiscal reform program that are improving the country’s fiscal and external trajectory.

Banking sector Oman’s central bank has introduced several initiatives to ease financial conditions in the country including liquidity injections, loan payment deferral and relaxing macroprudential requirements

underpinned by strong capital buffers and liquidity, driven by higher oil prices which will support economic growth. However, Fitch Rating cautioned that Omani banks remain exposed to event risk due to high single-obligor and sector concentrations, which is largely unavoidable given the narrow nature of the domestic economy. GCC banks have been consolidating to improve economies of scale, reduce operating and funding costs as well as boost profitability and efficiency. Oman is no exception and regulators have long supported mergers across the financial services sector. Sohar International Bank received approval from the central bank to proceed with the due diligence process for a potential tie-up with Islamic lender Bank Nizwa earlier this year.

WHILE THE GOVERNMENT INTENDS TO BROADLY CONTINUE WITH ITS FISCAL REFORM PROGRAM, WE EXPECT IT WILL ALLOCATE SOME OF THE FORECAST OIL WINDFALLS THIS YEAR TO SUPPORT ECONOMIC ACTIVITY AND REDUCE THE IMPACT OF PAST AUSTERITY ON THE POPULATION. – S&P Global

on capital buffers and liquidity ratios. The apex lender is expected to increase its key interest rate after the US Federal Reserve raised its interest rate by 0.5% earlier in May—its largest hike in more than two decades as it seeks to rein in soaring inflation. Meanwhile, the Omani government’s liquid assets—including deposits in the banking system and liquid assets in the country’s wealth fund, Oman Investment Authority (OIA) and the Petroleum Reserve Fund (PRF)—are estimated at 47% of GDP in 2022. The Sultanate’s banking sector remains in a relatively resilient position

M e a n w h i l e, O m a n A ra b B a n k successfully acquired Alizz Islamic Bank through a share swap deal in July 2020 in a transaction that created a lender with more than $8.3 billion (OMR 3.2 billion) in assets.

Driving growth Since taking power in January 2020, Sultan Haitham bin Tariq has moved to balance Oman’s finances and prepare it for a time after oil. The government has implemented a series of reforms as part of the country’s broader strategy to balance its budget, reduce debt and bolster public finances, including the mea-finance.com

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introduction of VAT, cutting subsidies and restructuring government-owned entities. The Sultanate seeks to focus on subsidies, public-sector employment and the provision of safety nets as part of its future fiscal reforms. “While the government intends to broadly continue with its fiscal reform program, we expect it will allocate some of the forecast oil windfalls this year to support economic activity and reduce the impact of past austerity on the population,” said S&P Global. Oman started levying a delayed 5% VAT in April 2021 following the lead of GCC neighbours. FY2022 budget estimates that VAT and excise tax revenues will increase by 29.5% to $1.4 billion (OMR 535 million) compared with the budgeted figure of $1.1 billion (OMR 413 million in 2021). VAT is aimed at ensuring Oman’s financial sustainability after the country accumulated huge amounts of debt over the past few years to compensate for its dwindling oil revenues. Trimming public debt and restructuring public institutions and companies is one of a series of steps taken by the Sultanate to improve fiscal efficiency after sensitive reforms had lagged for years. Over the past two years, Sultan Haitham merged several state entities, including the country’s wealth funds and appointed finance and foreign affairs ministers as well as central bank chairman, portfolios that were held by the late Sultan Qaboos. Oman split its $17 billion wealth fund into two units overseeing local and foreign assets in April. The “Generation Portfolio,” which consists of foreign assets and some local assets in various instruments, including public and private markets, and real estate portfolios, aims to achieve the greatest returns for future generations. T h e ot h e r u n i t , t h e N a t i o n a l Development Portfolio, which has stakes in more than 160 companies and manages local assets, will help support Oman’s general budget through dividend distributions. This second unit will also

look to attract private sector investors and many private firms. The Gulf state also established Energy Development Oman (EDO) as part of the government’s efforts to use its largest oil block to raise debt. EDO owns a 60% interest in Block 6, which is one of the biggest crude deposits in the region and has a production capacity of 650,000 barrels a day. Oman expects to receive over 80% (depending on oil prices) of hydrocarbon revenue from EDO through taxes, royalties, and dividends.

Structural reforms Oman, which is set to break ranks with the rest of the GCC region and introduce an income tax on high earners, has taken measures over the past two years

aim to list one or two oil firms this year. The move comes as government-owned companies in the region are stepping up efforts to boost domestic equity markets while supporting efforts to diversify economies away from heavy reliance on oil revenues. Though Omani authorities dismissed reports about a new personal income tax on high-wage earners that will likely be introduced in 2023, the plan is currently under study. The country will also redirect state subsidies on electricity and water to only those groups who need it, rather than subsidizing all users. Last year, Oman said it plans to expand its visa-fee exemption to more than 100 countries in a bid to boost tourism. The Gulf state is also considering a new

FRONTLOADED FISCAL REFORMS, INCLUDING VAT AND CUTS IN SPENDING ARE EXPECTED TO TURN THE COUNTRY’S FISCAL AND CURRENT ACCOUNT DEFICITS INTO SURPLUSES, STARTING FROM 2022 – The World Bank

to enhance sustainable growth while attracting foreign investors and talent. S&P Global projected that over the next three years, Oman’s non-oil sector to be the leading driver of growth with growth averaging 2.2% between 20232025, relative to 1.8% in 2022. Muscat Stock Exchange, which was converted into a closed joint-stock company in January 2021, plans to allow full foreign ownership in listed companies in a bid to attract more inflows to its market, following similar moves by stock markets in the Gulf region. The Sultanate plans to stage public offerings of 35 state-owned entities over the next five years with the

investment residency program as part of its wide-ranging reforms to fix its finances. The granting of long-term residence visas to foreign investors mirrors the UAE’s visa programs that offer longer-term residencies and citizenships to investors and certain professionals. Oman is benefiting from the sharp increase in oil prices and the government plans to use the windfall to reduce its debt levels in a bid to strengthen fiscal fundamentals. Meanwhile, a series of reforms that are being implemented in the country such as VAT and the streamlining of expenditure could strengthen fiscal and external positions. mea-finance.com

ESG - SUSTAINABILITY

The COPs are coming The next two COP meetings will be hosted in the Middle East, and attention will be drawn to the region’s financial sector to examine how it is deploying its undeniable influence to meet the regions sustainability commitments

he Middle East has transformed f ro m a n o b s t r u c t i o n i s t negotiation bloc to a group of countries with ambitious climate goals as the next two rounds of the United Nations climate summit, Conference of Parties (COP), will be hosted by Egypt and the UAE in 2022 and 2023 respectively. Without a doubt, the outbreak of the COVID-19 pandemic ushered in a heightened focus on environmental, social, and governance (ESG) issues. Conscious investing was slowly building momentum through the support of corporate social responsibility, but with

the pandemic, the need for action on ESG topics by governments and corporations alike has never been higher. J.P Morgan said that the coronavirus crisis did not only bring the greatest recession since World War II, but investors are calling it the 21st century’s first ‘sustainability’ crisis, one that is acting as a wake-up call for decisionmakers to prioritise a more sustainable investment approach. ESG is no longer a choice, but imperative and financial institutions play a pivotal role in providing funding to combat climate change, challenge and incentivise best sustainable practices as well as

Banking and Finance news in the MEA market

support organisations in addressing the UN Sustainable Development Goals, said KPMG. Though Middle East countries and regional corporates are proactive about environmental sustainability, the financial sector has not kept pace. Strategy&, a unit of PwC, projected that developing the right structure and mechanisms for green finance in the Gulf region can help unlock $2 trillion in economic growth and more than one million jobs by 2030. Sustainable financing together with technological innovation and digitalisation in the financial services sector is instrumental to sustainable innovation and growth as well as the transition to a less carbon-intensive economy. The pandemic has put the Islamic finance industry back on ESG investors’ radar. S&P Global said that as regulators and policymakers around the world seek to establish a more sustainable, stakeholderfocused and socially responsible financial system for the future there are certain similarities between Islamic finance and sustainable finance.

While reacting to the Intergovernmental Panel on Climate Change (IPCC) report on climate change last August, the UN Secretary-General António Guterres cautioned that global warming is dangerously close to spiraling out of control, saying it is “Code Red for Humanity”. “The alarm bells are deafening, and the evidence is irrefutable: greenhouse gas emissions from fossil-fuel burning and deforestation are choking our planet and putting billions of people at immediate risk,” Secretary-General Guterres said.

Sustainable finance Regulators, policymakers and investors are ramping up pressure on financial institutions due to the increasing recognition that conscious investing, in particular issues to do with climate change, represents material risks that must be managed. S&P Global said that the total sustainable debt issuance reached a record high in 2021 and is poised for continued growth in 2022. However, a key challenge for market participants this year will be to manage the expected growth in a way that combats rising concerns about greenwashing—a deliberate strategy by corporates to exaggerate the environmental benefits of an investment. Globally, mainstream financial institutions today make investment decisions only after carefully studying ESG risks. “The world’s largest asset managers, insurers, and stock exchanges are redirecting resources massively toward sustainable investments, with profound implications for governments, investors, and companies,” said Strategy&. T h e M i d d l e E a s t s u s ta i n a b l e debt issuance market has grown tremendously over the years as retail or institutional investors, sovereign wealth funds, banks and portfolio managers are utilising ESG considerations to build and manage their portfolios. Similarly, several corporate and sovereign borrowers in the region have also increased the issuance of fixed-term securities to raise funds for projects

ESG IS NO LONGER A CHOICE, BUT IMPERATIVE AND FINANCIAL INSTITUTIONS PLAY A PIVOTAL ROLE IN PROVIDING FUNDING TO COMBAT CLIMATE CHANGE, CHALLENGE AND INCENTIVISE BEST SUSTAINABLE PRACTICES AS WELL AS SUPPORT ORGANISATIONS IN ADDRESSING THE UN SUSTAINABLE DEVELOPMENT GOALS – KPMG

with environmental benefits such as renewable energy projects. Financial institutions in the Middle East region are looking to raise funds through green instruments, with UAE’s First Abu Dhabi Bank (FAB) taking the lead through its green bonds. FAB raised $523 million in five-year euro-denominated green bonds in March—the first-ever eurodenominated green bond issue from the Middle East. The lender also issued a $209 million Swiss franc-denominated green bond in April—its second public green issuance in 2022. Issuers in the region have mostly used green debt to finance projects that have key environmental impact including climate change, renewable energy and energy efficiency. Abu Dhabi-based solar energy firm Sweihan PV Power Company raised $700 million in amortising green bonds earlier this year. Last year saw landmark deals including FAB’s $219 million green bond that was issued in November 2021, the Arab Petroleum Investments Corporation (APICORP)’s $750 million five-year debut green bonds and Saudi flagship tourism project developer, The Red Sea Development Company’s, $3.8 billion (SAR 14.1 billion) ‘green’ loan. The Middle East is witnessing an increased interest in ESG-related initiatives and deals as large public institutional investors are gradually incorporating the strategy into their investment mix.

The ESG framework of Saudi Arabia’s Public Investment Fund is expected to allow the sovereign wealth fund to expand its funding base by attracting sustainable-focused investors. Abu Dhabi Investment Authority (ADIA), the UAE’s biggest sovereign wealth fund, also said last September that it looks to increase its exposure to technology and climate change-oriented investments as part of its post-pandemic strategy.

Islamic finance The issuance of dedicated social Islamic finance instruments and green Sukuk in 2022 is expected to eclipse previous years driven by the industry leveraging its alignment with ESG values. The pandemic pushed “green” or ethical investing to the fore and the trend is expected to enhance the appetite for sustainable instruments as governments and corporates in key Islamic finance markets seek to diversify their economies from heavy reliance on oil revenues. Stronger issuance of Islamic finance instruments in core Islamic finance markets is expected to cushion against the economic fallout from Russia’s war in Ukraine and bolster core countries’ energy transition in the Middle East, Africa and South Asia (MEASA) region. Shariah-compliant financial instruments offer a framework that embodies the social and ethical values mea-finance.com

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of ESG investing, offering investors in the MEASA region the opportunity to adopt more sustainable and conscious investment strategies while tapping into the potential value of impact investing. “The natural crossover between sustainable investing and Shariahcompliant social principles will appeal to investors whose investment decisions are guided by environmental, social and governance considerations, creating opportunities for the Islamic finance industry,” said Moody’s. Meanwhile, Sukuk issuance in 2022 is projected to stabilise or be slightly lower after a record $205 billion in 2020 and five consecutive years of growth amid lower sovereign funding needs as several GCC countries have registered fiscal surpluses on higher oil prices and the economic recovery—thus lowering the need to tap debt markets. Bahrain’s Infracorp, an infrastructure fund spun out of GFH Financial, issued a $900 million Sukuk in March—the first-ever green Islamic bond issued by a Bahraini entity. GFH Financial also launched and seeded a $100 million Sukuk fund in February, following an agreement with Credit Suisse to offer financing and fund administration services across the GCC region. Saudi Arabia’s Riyad Bank, which is 43% indirectly owned by the government, sold $750 million in sustainability-linked Additional Tier 1 (AT1) dollar-denominated Sukuk in February to support its capital base and meet financial and strategic needs. The Saudi National Bank, the country’s largest bank by assets, also raised $750 million in debut ‘sustainable’ Sukuk last month after demand topped $3.2 billion. The Egyptian government plans to issue Islamic bonds, green bonds as well as Eurobonds this year to fund public projects in the North African country. Qatar and Saudi Arabia are also considering issuing their debut green bonds as the world’s largest energy exporters seek to tap into a booming global market for sustainable debt.

THE NATURAL CROSSOVER BETWEEN SUSTAINABLE INVESTING AND SHARIAHCOMPLIANT SOCIAL PRINCIPLES WILL APPEAL TO INVESTORS WHOSE INVESTMENT DECISIONS ARE GUIDED BY ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONSIDERATIONS, CREATING OPPORTUNITIES FOR THE ISLAMIC FINANCE INDUSTRY – Moody’s

Proceeds from green Islamic bond issuance typically support investments in renewable energy or other environmental assets such as solar parks, biogas plants, wind energy projects as well as renewable transmission and infrastructure projects. Overall, Moody’s expects Sukuk issuance to drop slightly to around $160 billion-$170 billion in 2022 from $181 billion in 2021 while S&P Global forecasted total Islamic bond issuance of about $140 billion–$155 billion this year.

A seismic shift As the world prepares for COP27 in Egypt, this year’s meeting will focus less on raising targets to reduce carbon emissions but more on getting climate funding to developing countries, both to decarbonize and deal with the impacts of a warmer planet. Last year, the Middle East region caught the world by surprise with announcements targeting carbon neutrality by the middle of the century from Turkey and oil-rich Gulf countries including the UAE, Saudi Arabia as well as Bahrain and Qatar. Morocco, Tunisia, Lebanon and Jordan also bolstered their pledges to cut their greenhouse gas emissions by 2030. Saudi Arabia, the world’s top oil exporter, said in October 2021 that it aims to reach net-zero carbon emissions by 2060 by investing more than $186 billion (SAR 700 billion) into a green economy, in a way that’s compatible with the Gulf state’s

development plans. Earlier that month, the UAE had unveiled plans to invest $163 billion (AED 600 billion) in renewable energy as part of its strategy to achieve net-zero emissions by 2050. Bahrain’s cabinet made the same net zero commitment in October 2021, saying the kingdom aims to reach netzero carbon emissions in 2060 to help tackle climate change and protect the environment. Meanwhile, Oman updated its climate action plan in July 2021 and Qatar aims to reduce greenhouse gas emissions by 25% by 2030. S&P Global said that to achieve netzero, GCC governments need to ensure that any carbon dioxide released into the atmosphere from domestic corporate activities is offset by an equivalent amount being removed. Since its launch in April 2021, the UN Net-Zero Banking Alliance has more than 100 members representing 40 countries and over 43% of global banking assets. FAB is the first bank in the Middle East to join the alliance of banks committed to reducing their carbon financing and investment portfolio by 2050. Others include the National Bank of Egypt, Commercial International Bank, Banque Misr as well as Banque Du Caire, Arab African International Bank and UAE-based Tawreeq Holdings. The financial services sector is stepping to the forefront as the importance of environmental and social responsibility gains momentum. mea-finance.com

ESG - SUSTAINABILITY

COP27 AND COP28:

Expectations and implications for investors Thomas Hohne-Sparborth Head of Sustainability Research at Lombard Odier highlights the range of considerations needed to be taken into account when making sustainable investment decisions

he 26th international climate conference (COP26) held in Glasgow in the UK, gathered world leaders in an effort to advance the agenda of the Paris Agreement to mitigate and adapt to climate change. While the key objective to secure commitments to limit warming to below 1.5C was not achieved, a range of new pledges were announced, seeking to accelerate the phase out of coal, eliminate deforestation, address methane leakage and intensify i nvest m e nt i n key b re a kt h ro u g h technologies to further accelerate the climate transition. In 2022 and 2023, the next of these conferences will take place in Egypt and the UAE. For investors and financial institutions in the region, it is a good opportunity to take note, and consider the multiple ways in which climate change and the climate transition may affect their portfolios, and the steps that investors may need to take to adapt. Investors might approach the question of climate change from two perspectives.

Thomas Hohne-Sparborth, Head of Sustainability Research at Lombard Odier

Firstly, from an impact perspective or a desire to ensure a focus on responsible, well-aligned investments, to ensure investors deliver a fair contribution to a d d res s i n g t h es e key g l o b a l challenges. Secondly, from a financial

Banking and Finance news in the MEA market

perspective, where the key concern is how environmental factors may affect financial performance and companies’ bottom lines. Both questions are vital, and closely related. Companies that are better aligned to the transition and committed to rapid decarbonisation may find themselves better insulated from regulatory risk, better positioned in the likely event of escalating carbon prices. Additionally, companies leading the transition may well succeed in developing a new green competitive advantage, increasing their market share at the expense of the laggards in their industries. These are some of the examples through which environmental alignment carries immediate financial implications and are examples of transitional risks and opportunities: shifts in the market triggered not by climate change itself, but by the global regulatory, investor, market and consumer response to climate change. In addition, investors may also wish to consider exposure to physical risks – linked to physical changes in our environment – and to liability risks, those that recognise that companies may well be held to account over their past emissions, or failure to adapt to the transition or the risks they face. These forces are accelerating, already creating meaningful changes in the market. Governments representing some 90% of the world’s GDP have now committed to net zero objectives. The cost

of wind energy has, in many regions, fallen below the cost of coal power and may fall below the cost of gas power imminently. Consumers are adapting their habits, from changes in dietary preferences, to work-from-home habits and choices in holiday destinations. For investors, this is becoming an increasingly acute challenge. Financial institutions with some USD 130 trillion in assets under management have already joined the Glasgow Financial Alliance for Net Zero (GFANZ), and are seeking to reduce their portfolio, financed emissions towards net zero. While the scale of the challenge is significant, and a considerable ramp-up in global ambition will be required to achieve these objectives, even this commitment in itself will already begin to reshape markets and valuations. Rather than being many years away, this transition is already unfolding, and material to investors. Coal-based utilities were going bankrupt in the US even during the previous, procoal administration. Today, cost of capital has increased significantly for projects in oil and gas, while falling for renewables. In equity markets, evidence is increasing of a realignment in valuations, already beginning to price in transitional alignment. For investors, this requires new mindsets. To date, integration of climate considerations has taken a comparatively simplistic approach. By and large, investors have begun to assess the scale of emissions in their portfolio to calculate the carbon “intensity” or carbon “footprint” of their investments. With only this figure at their disposal, investors have sought to seek to reduce this figure, believing this to be an appropriate means of managing their exposure. The old adage that “if you only have a hammer, every problem looks like nail” probably applies here. Reducing portfolio footprints is easily achieved by reallocating capital from high-emitting sectors into lower-emitting industries like education, healthcare, telecom and

IT. However, does this actually deliver on an investor’s objectives? We think not, on a number of grounds. Firstly, while this reduces exposure to emissions, it does not contribute to any real emission reductions, as it does not imply any of the companies now invested in are actually reducing emissions. Secondly, it withdraws capital from those sectors that are most climaterelevant today and where transitional financing is urgently needed. Thirdly, it reduces portfolio diversification, leaving investors exposed to rotations in the market and sectoral shocks. Fourthly, it ignores the fact that many of the most significant opportunities may precisely be found in these higher-carbon sectors, where a company transitioning to “green”

assess not the level of emissions of a company today, but whether those emissions are falling in line with Parisaligned benchmarks. Another metric that is vital to investors is one we call climate value impact, seeking to quantify the impact of the environmental transition on firm revenues, costs, prices, margins and earnings. W ithin the fram ework of ESG approaches, COP27 and COP28 will clearly drive an increased interest in the “Environmental” side of the equation. In reality, however, the three dimensions are closely linked. Already, environmental change has idiosyncratic impacts, with lower-income and marginalised population groups often the most impacted, owing to lower coping

THE OLD ADAGE THAT “IF YOU ONLY HAVE A HAMMER, EVERY PROBLEM LOOKS LIKE NAIL” PROBABLY APPLIES HERE steel or “green” cement may emerge as the winner of tomorrow. Finally, it assumes that companies with lower carbon footprints necessarily face lower risk. This assumption is likely false for a number of reasons. On the one hand, investors today still generally rely on incomplete assessments of company’s full emissions exposure, often ignore emissions linked to upstream and downstream value chains. Moreover, even a company with a low carbon footprint – such as a company providing oil and gas consulting services – may still be at risk if its end markets go into decline. To navigate these risks, investors need more forward-looking capabilities that may help them understand the nature, shape and timing of these key transitions ahead. One metric gaining increased interest in the market is implied temperature rise, seeking to

capacity, and exposure to sectors and industries that are most at risk. Governance, too, is inexorably linked with the climate transition – as the Net Zero challenge does not merely involve setting ambitious targets, but implementing in a credible, well-managed, and financiallysound manner. To investors, these challenges may seem daunting. But, with the right mindsets and capabilities, they can be navigated. While it may seem tempting to go for easy-win solutions, these may lead investors astray from their core objectives, both of reducing emissions and managing financial exposure. Hopefully, the advent of COP27 and COP28 will intensify the debate among investors as to the appropriate, and notso-appropriate, solutions in the market today, and for the critical period to 2030 and beyond. mea-finance.com

ESG - SUSTAINABILITY

In Tune With The Times Vince Cook CEO of National Bank of Fujairah shows the importance of ESG principles is acknowledged and proactively put into practice at the bank, also pointing out that COP27 and COP28 may bring many benefits to the region

The “E” in ESG - Environmental, appears to get the bulk of the attention in the acronym. Tell us about your activities under the “S” and “G”.

OP 27 and COP 28 will both take place in the Middle East, what could this mean for banks operating in the region?

We think that hosting COP27 and COP28 in the Middle East will have a positive effect in terms of highlighting the steps already being taken in respect of reducing the impact of climate change in the region as well as helping to accelerate MENA’s clean energy ambitions. This summit will be an opportunity to explore the prospects for sustainable energy and the ways to reduce CO2 emissions in the Middle East, and banks will be further encouraged to reduce their own carbon footprint and positively influence the same by their customers. The opportunity to drive economic growth and job creation to deliver on these growing ambitions will be enormous and could bring multiple benefits to the Arab world. In the meantime, NBF is developing and progressing its own plans to ensure the diligent application of the global ESG principles. More widely, the focus on achieving high ESG standards is becoming critical to both raising finance and successful investing in the GCC and the wider Middle East. Driven by the growing concerns about climate change and environmental protection, the number of investors in the region, sovereign wealth funds, banks and

TotalEnergies with a US$34M nonrecourse financing alongside the Arab Petroleum Investments Corporation (APICORP), for construction of a 50 MegaWatts (MW) portfolio, supporting the production of low sulphur fuel oil for the marine industry and ensuring our own direct energy consumption is minimised.

Vince Cook, CEO at National Bank of Fujairah

portfolio managers who are utilising ESG considerations to build and manage their portfolios have grown substantially over recent years. We at NBF believe that an ongoing perception shift in the region is imperative to turn ESG into an opportunity for future growth. This will require clear and standardized criteria for ESG measurement and governance but the will to make this shift is clearly being demonstrated in many quarters. NBF is looking to support such a progression by providing facilities for investments that will drive greater sustainable energy supplies, for example our support for

Banking and Finance news in the MEA market

At NBF the social impact is met through conscious and deliberate efforts and activities within the organisation. In 2021, underlying the bank›s emphasis on gender diversity, our female workforce reached 43.02% of the total, with strong and growing presence in management roles and occupying 11% of board seats. National Bank of Fujairah also donated AED 4,200,000 to social causes and supported various community initiatives in 2021 such as: “The Mission to Seafarers (MTS)” – a charitable initiative that cares for seafarers off the UAE coast, “Emirates Nature” (whereby customers were able to contribute towards the conservation of Hajar Mountains through NBF’s ATM network), and support of the Fujairah Welfare Association on various community development projects, to name a few. When it comes to governance impact, maintaining the highest ethical, governance, and investor relations standards remains NBF›s top priority, as we believe that strong corporate governance is critical to any company›s long-term success. It fosters trust and engagement between the company and its stakeholders and sets high standards for the prevention of money laundering/ terrorism financing, data privacy and

the transparency required to build a continuous improvement culture. NBF consistently ranks as one of the top banks in the region when it comes to staff satisfaction, our employee training programmes, and development is one of our top priorities, with only 3.65% rate in employee turnover in 2021. We conduct an annual staff satisfaction survey that consistently places NBF in the top quartile of organisations globally, run projects that supports employees in sharing knowledge, experience and best practices efficiently through a new cloudbased Human Resources system.

MORE WIDELY, THE FOCUS ON ACHIEVING HIGH ESG STANDARDS IS BECOMING CRITICAL TO BOTH RAISING FINANCE AND SUCCESSFUL INVESTING IN THE GCC AND THE WIDER MIDDLE EAST

CO² emissions has been a major concern in the region. Tell us about your environmental impact and sustainable energy solutions. NBF has always placed a high importance on the consideration of ethical and moral issues in relations to finance. Therefore, more recent emergence and rapid advancements of ESG is something that fits very much with our own ethos and values as a bank and is something we wholeheartedly welcome. We select business activities to finance that are socially desirable and responsible. And we consider all the elements of ESG, not only the environmental but strong corporate governance, and the positive impacts our decisions can have for our workforce and local communities too. Our bank has also implemented numerous green initiatives across our operations to reduce our energy consumption, from installing solar water heaters, to panels and signage, and replacing artificial lighting with sensoractivated LED lights. Our green initiatives have led to energy savings of 960,000 KWH, which equates to a cost saving of AED 420,000. The recycling of A4 paper, envelopes, toner and cartridges has also had a noticeable impact, with overall yearly stationery savings amounting to over AED 30,000. The reduction in its carbon footprint is 800,000 KG/annum, while the introduction of solar water heaters has contributed

to 22,000 KWh of energy saving and reduction of CO2 emission by 60,000kgs. As NBF’s Board of Directors are committed to covering sustainability issues at board level. The bank is developing methodologies for assessing transitional and physical risks associated with climate change to incorporate these into our investment and financing activities, such as: sustainable products and services, including Green personal loans for customers interested in fuelefficient, eco-friendly cars, and online application processes for on-boarding customers that reduces the reliance on paper forms. mea-finance.com

ESG - SUSTAINABILITY

Partnerships in Progress Their ambition to lead the world in environmentally responsible banking can be seen in their active support for businesses in reducing environmental impacts, the landmark deals they are behind and the initiatives they forefront to improve opportunity and inclusivity, says Mohamed Salama Head, Client Coverage, Head, Corporate, Commercial & Institutional Banking, MENA, and Head, CCIB, UAE, Standard Chartered Bank

OP 27 and COP 28 will both take place in the Middle East, what could this mean for banks operating in the region?

A recent study done by Standard Chartered Bank - Just in Time, Financing a Just Transition to Net Zero - highlights the availability of finance as the single biggest constraint in supporting sustainable development. This finance is required to foster development and use of new technology, as we see in the case of hydrogen, creating products or financing structures which make sustainable finance a compelling choice, ensuring robust governance around use of financing to avoid green washing. All the above adds to the resilience of the underlying economies preparing them

for the change, allowing them to embrace the change and emerge stronger. We have made our intent clear by setting an ambition to be the world’s most green and responsible bank and we think that with these opportunities happening in our region, we will have a great chance to highlight our role and share best practices. We know that there is no “onesize fits all solution when it comes to an approach sustainability and sustainable finance, and so, being aware of that, we are working closely with government entities and key clients across the region to help them in their transitions. Last year, the UAE announced its Net Zero by 2050 strategic initiative, which is a national drive to achieve net-zero emissions by 2050, making the Emirates the first Middle East and North Africa

Banking and Finance news in the MEA market

Mohamed Salama, Head, Client Coverage, Head, Corporate, Commercial & Institutional Banking, MENA and Head, CCIB, UAE

(MENA) nation to do so. A few weeks after that, Saudi Arabia, the world’s biggest oil exporter, set a target of achieving net-zero carbon emissions by 2060. This was an open invitation for the world to partner with the UAE, and now with Saudi Arabia to help address gaps, build bridges and develop the necessary and seriously required solutions to help progress the discussions for climate action. COP 27 and COP 28 provide significant opportunities for the Middle East and Africa and will mark a pivotal point for the region’s fight against climate change. Achieving a just transition, one where climate objectives are met without depriving developing countries of their opportunity to grow and prosper, will require capital and specialised support. African countries, especially

the large oil producers, lack the means to fully transition from fossil fuels. The sustainable way forward is hinged on adapting alternative energy and gradually increasing its share in the race to meet the global targets in 2050. Banks should be recognised as key players that can think strategically on this topic to accelerate sustainable infrastructure by thinking carefully and in the long-term about climatic risks. However, finance will need to be fit for the future. There is a growing concern around stranded asset risk, particularly for long-term investments such as infrastructure. These projects need to consider risks 10 years into the future, many of which may not be immediately apparent. Projects that are climate adapted reduce some of these risks from the outside and are more likely to stand test of time, so banks will need to take into account the potential climate risks over the lifespan of the project to ensure resilience and protect investments. For instance, in a renewable energy plant you have clear cash flows linked to the price of generated energy and for an energy efficiency improvement project you have energy savings which can be translated into cost savings, and they can repay financing. If you make improvements to mitigation, it is hard to work out exactly how the improvements deliver savings that can be used to pay back the funding. At the same time, it is important to recognise how these projects are needed by communities around the globe, both in terms of mitigating their reliance on fossil fuels, as well as providing climateadaptive solutions.

How are you preparing for COP 27 and 28? The Middle East’s Sustainability and ESG agenda is building momentum, especially in the post-pandemic world, and is being driven by numerous government initiatives, efforts to diversify away from oil and gas and increasing requirements

for disclosure on sustainable activities and reporting. As climate change climbs up the world agenda, more businesses and organisations are committing to net-zero emissions. Carbon credits, a mechanism used to compensate for an organisation’s emissions, will be one of the building blocks to help companies decarbonise. In the transition to net-zero, companies must prioritise emission reductions, but they should also go further and take action to mitigate emissions outside their value chain. A basic example is the scheme

WE HAVE TAKEN A STAND, SETTING LONG-TERM AMBITIONS FOR OUR ROLE ON THESE ISSUES WHERE THEY MATTER MOST

that airlines provide for passengers. Travelers can pay for carbon credits that will fund a project that will reduce emissions elsewhere. As part of our commitment to sustainability, we have published a methodology to calculate emissions and set our emission targets at sector level. As standards and methodologies evolve, and data quality and availability improve, we will refine our emissions calculations further. In addition, we have identified three specific levers to achieve our net zero targets. Firstly, we will support our clients on their decarbonisation journey by providing transitional, green financing

and counsel. Secondly, we will continue to engage with our clients to better understand their transition plans. This will allow us to assess and balance both their intent and ability to transition to lower emission technologies. Finally, as part of our journey to net zero, we will be looking to engage with and promote companies who are at the forefront of solving the technical challenges of a lowcarbon economy. At Standard Chartered, we are committed to being leaders in sustainable finance and making various contributions to the broader industry, in addition to our own internal and product-based initiatives. In emerging and developing markets, where sustainable finance has the power to make the greatest difference, no other international bank is as actively involved in pushing the sustainable finance agenda forward.

How are geo-political events affecting your ESG programmes? Despite global economic and political issues, companies will have to make considerably meaningful progress on their ESG commitments. According to S&P Global ratings, a key challenge in 2022 will be balancing actions taken on the ‘E’ with the ‘S’ when implementing climate transition plans to account for impacts on developing nations and vulnerable domestic populations. Efforts to promote the low-carbon economy may be disrupted in the absence of credible plans to promote economic and social inclusion, access to affordable critical services, and the availability of decent work. I do believe that through advocacy, knowledge sharing and access to competitive financing while adhering to best practices can build an ecosystem of partners which can accelerate adoption and exponential growth. In the region. That’s the role that we are playing.

How are ESG Investment funds performing in the region? In alignment with global sustainability mea-finance.com

ESG - SUSTAINABILITY

trends, companies in the Middle East are ramping up their efforts to implement ESG frameworks and policies, as stakeholders, including investors and consumers, increasingly demand businesses measure and address their ESG impacts. Although the region as a whole still lags its global counterparts in terms of ESG progress, countries like the UAE and Saudi Arabia are now striving to establish themselves as sustainability leaders. In October last year, we launched the first Repo transaction based on ESG principles in Saudi. The USD 250 million transaction was the first in the GCC and MENA, and amongst the first few globally where the Repo financing proceeds were allocated towards ESG assets. It has long been a core part of Standard Chartered’s strategy, and we have committed USD40 billion of project financing services for sustainable infrastructure and USD35 billion of services to renewables and clean-tech projects by the end of 2024. The projects we finance help promote the trade and growth of the regional economy, and a better quality of life for the local population. We are proud of our long-standing relationships with Export Credit Agencies (ECAs), Development Finance Institutions (DFIs), Foreign Direct Investment (FDI) and multilateral agencies around the world, that help us deliver financing for these clients.

The “E” in ESG - Environmental, appears to get the bulk of the attention in the acronym. Tell us about your activities under the “S” and “G”. The severe impact of climate change, stark inequality and unfair aspects of globalisation impacts everyone on the planet. We have taken a stand, setting long-term ambitions for our role on these issues where they matter most. We are committed to playing our part in supporting sustainable projects in the region. Standard Chartered is taking a stand and accelerating to net zero:

helping emerging markets in our footprint reduce carbon emissions as fast as possible, without slowing development, putting the world on a sustainable path to net zero by 2050. As expressed earlier, we are proud of our long-standing relationships with ECAs, DFIs, FDIs and multilateral agencies around the world, who assist us in delivering financing for these clients. The projects we finance help promote the trade and growth of the regional economy, and a better quality of life for the local population. For

As a matter of fact, our Project and Export Finance team closed more than $2 billion in sustainable finance deals in the region, which includes one of the largest waste to energy projects globally and one of the largest singlesite solar projects in the world. Between January 2020 and the end of 2021, Standard Chartered completed 10 power deals across MENA ,eight of them for renewables. In sustainability and the social element of the “S” and as a Group, we have committed to launching programmes

BETWEEN JANUARY 2020 AND THE END OF 2021, STANDARD CHARTERED COMPLETED 10 POWER DEALS ACROSS MENA, EIGHT OF THEM FOR RENEWABLES

example: signing MoU with KUKE and Saudi EXIM. We’re one of only a handful of international banks that can connect clients to over 25 export credit and multilateral agencies in China, South Korea, the US, Europe and beyond. Whether a contractor or a government financing that next hospital, bridge or other form of infrastructure, we can help access ECA support. We have established a dedicated sustainable finance team at the start of 2019 to help mobilise capital to where it matters most. However, we have always believed in the importance of being a responsible financial institution through managing the potential negative impact of our activities with a strong ESG risk culture. In fact, our Environmental and Social Risk Management team was first established in 1997 and the Bank was one of the first signatories to the Equator Principles for Project finance.

Banking and Finance news in the MEA market

and initiatives that give back to the communities in which we operate and our “Futuremakers” global initiative aims to tackle inequality, by promoting economic-inclusion for young people, including those affected by Covid-19. In 2021, Futuremakers programmes reached more than 304,000 young people, and more than 671,000 young people between 2019 and 2021 across 41 markets. In May 2022, we launched the programme in Pakistan. The Bank will be reaching out to targeted beneficiaries, including more than 480 youths with disabilities of which 20% are visually impaired. Expected project outcomes include 20% of the project beneficiaries transitioning into formal employment (including self-employment) and at least 40% of beneficiaries will be females, because currently their participation i n t h e Pa k i sta n i l a b o u r-fo rc e i s extremely low.

Strengthen proﬁtability from existing and new customer bases even without a physical presence. Serve retail, corporate, FX use-cases in a modular fashion with the help of pre-integrated networks. Cross-sell and upsell cross-border payments services along with banking products.

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DATA SECURITY

Double Edged Sword and Shield Customer data can be a map helping banks navigate toward success and a potential vulnerability to material and reputational loss if not protected, so regional banks are gearingup to ensure they are fully shielded

he financial services sector is in the midst of a profound digital transformation journey and banks in the Middle East are preparing for the next major phase of digitalisation as customer experience is emerging as the new point of sale. McKinsey said that the shift to digital banking has happened quickly and is being accelerated by existing trends such as the increased use of digital channels for diverse transactions that have intensified over the last two years. The outbreak of the pandemic created unique opportunities in the financial service sector by accelerating and strengthening the transition towards digital

banking at unprecedented speeds, but it also created some exceptional challenges for the industry including cyberattacks. The FS-ISAC, an industry group dedicated to reducing cyberattacks in the financial services sector, warned in March that banks should expect more or even worse cyber threats this year as state-backed hacking campaigns are expected to mirror geopolitical tensions amid Russia’s war in Ukraine. The banking group also cautioned that ransomware gangs are retooling to dodge increased scrutiny after an unrelenting year of fighting off cyber threats in 2021. Cybercriminal activities which include fraud, e-commerce data seizure and

Banking and Finance news in the MEA market

phishing attacks have increased as banks in the Middle East swing to digital-only models amid new models of operations such as remote working. However, it is imperative for financial institutions to respect customers’ privacy and secure their data, which in turn can build trust. Customer data is the linchpin behind digital transformation in the banking sector and financial institutions are responsible for managing the data they collect. Big data is key to bankers. It is the manual that helps them meet customers’ preferences and expectations as well as explore new avenues of growth or new business models.

Leveraging customer data The unprecedented global adoption of digital banking services in the past two years widened financial institutions’ data collection and storage tools and as such, banks have amassed troves of consumer data and mines more every day. Financial institutions are increasingly collecting significant amounts of data as technological innovations have reshaped customer expectations and banks in

the Middle East need to understand the clear shift that has happened in customer behaviour. Data plays a critical role in product development, product management and ultimately enhancing customer experience. McKinsey said that the rapid advancements in financial technologies, the recognized value of data and increasing data literacy are changing what it means to be “data-driven.” Banks should cultivate the mythical 360-degree view of clients—one that accounts for their current value as well as their potential lifetime value to stay competitive in an overbanked market. Given how the financial services sector is generally ahead of the curve when it comes to possessing insight into customer expectations and requirements, the ability to spot and iron out any glitches is key to making selfservice banking effortless and avoiding reputational damage. D a ta ’s wo r t h d e p e n d s o n i t s accessibilit y and application as customer insight plays a critical role in product development and customer communication in the banking sector. “The cloud is the only place where customer data gains scale, agility, and the power to drive reinvention so a business can soar,” said Accenture. The use of cloud computing has been an enabler of advanced analytics, as these computer system resources provide a space to both store and analyse large quantities of data in a scalable way, including through easy connectivity to mobile applications used by customers. Cloud technology such as the software as a service (saas) model offers financial institutions myriad opportunities including easier customer data analytics and sharing, improved marketing time, cost reduction and enhanced flexibility and operational efficiency. Data is the new gold. Managing data proficiently can also boost banks’ security systems through the detection of fraud signals and analyzing them in realtime using artificial intelligence (AI) and

machine learning (ML) to flag suspicious activities before they corrupt the entire banking system.

Data & privacy concerns C - s u i te exe c u t i ve s i n f i n a n c i a l institutions faced a challenging and dynamic environment prior to the outbreak of the pandemic as they sought to protect their institutions from cyberattacks, without upending their ability to innovate and extract value from technology investments. The coronavirus crisis accelerated some of the transformative forces that were already well underway in the Middle East as banks are implementing new

malicious hacking cases have intensified since the outbreak of the pandemic. Global financial institutions are finding themselves a step behind as their existing approaches to combat cybercrime cannot adequately handle the many threats and burdens they encounter. Cyberattacks are getting more sophisticated by the day. The evolution of fraud and financial crime moves in tandem with the developments in the domains they plunder. According to IBM, banks can reduce their risk assessment with a digital transformation built on the cloud environment that offers financial institutions unprecedented agility and protection in reducing cyber risk.

GCC BANKS LAID THE FOUNDATION FOR SUCCESS OVER SEVERAL YEARS BY INVESTING IN INFRASTRUCTURE AND SYSTEMS, INCLUDING EQUIPMENT AND SOFTWARE, TO MINIMISE THEIR EXPOSURE TO CYBER RISK, WHILE ALSO BENEFITING FROM SUPPORTIVE REGULATORY FRAMEWORKS AND CYBER RISK REQUIREMENTS – S&P Global

digital features including fully digitalising account opening, Know Your Customer (KYC) as well as verification and digital payments. However, it is worth noting that just like any other financial service or department, digital banking and contactless payments expose both customers and financial institutions to deliberate cyberattacks, inadver tent securit y lapses and vulnerabilities of a relatively immature and unregulated global internet. KPMG stated that the proliferation of digital channels following the outbreak of the pandemic has also led to increased cyber risk exposure. Cybercrime and

Cybercriminals have become more imaginative and infusing information security into an institution’s infrastructure safeguards data and assets. It also supports stabilise banking regulations and compliance program activity. Hackers are using AI, ML and other innovative technologies to unleash increasingly sophisticated cyberattacks McKinsey said that the stereotypical hacker working alone is no longer the main threat, but cyber attacking has evolved into a multibillion-dollar enterprise, complete with institutional hierarchies and research and development budgets. Considering these developments, mea-finance.com

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financial institutions in the Middle East should leverage new technologies and constantly change their operating models to obtain a holistic view of the evolving landscape of financial crime. Similarly, with digitalisation at the core of the Middle East economic recovery strategy and retailers’ shift to costeffective models, the use of e-commerce has become paramount. KPMG said that customers are spending on average 10 to 30% more online with e-commerce consumer sales jumping 28% at the height of the pandemic.

Staying ahead of the curve Data security has always been a neverending race, but the rate of change has accelerated in the last two years. As financial institutions are boosting their investments in new financial technologies to enhance customer experience and generate value, new vulnerabilities are emerging. Industry analysts say mitigating the cyber risks of on-demand access to ubiquitous data requires four cybersecurity capabilities including zerotrust capabilities, behavioural analytics, elastic log monitoring and homomorphic encryption. A zero-trust architecture (ZTA) shifts the focus of cyber defence away from the static perimeters around physical networks and toward customers, assets and resources, thus mitigating risks such as ransomware attacks from decentralised data. Bankers have increasingly become a key vulnerability for financial institutions as businesses have accelerated the approval of new technologies and processes to cope with the new working model in the ‘new normal’. Behavioural analytics solutions support banks by monitoring attributes such as access requests or the health of devices and establishing a baseline to identify anomalous intentional or unintentional user behaviour. Meanwhile, the elastic log monitoring solution is based on several open-source

platforms that allow financial institutions to pull log data from anywhere in the organisation into a single location and then search, analyse and visualise the data in real-time. Banks in the Middle East must bolster their cybersecurity capabilities with technical and operational changes as sophistication, frequency and range of ransomware attacks increase. The increase and sophistication of cybercriminal activities also call for both customers and financial services providers to consider the cybersecurity protocols of their suppliers and other third parties. Cybercriminals are adopting the latest technological innovations and are forever changing techniques to make attacks more effective, faster and adaptable to current safety measures. Globally, banks that effectively leverage their digital assets, strengthen their cyber resilience and manage third-party risks are poised to reap the benefits of increased revenue streams, regulatory compliance as well as enhanced operational efficiency.

Middle East trends Significant amounts of data are being generated as regional governments and corporates—especially banks and the retail industry—swing more towards digitalised economies. Technological innovations bring great opportunities, but also create a breeding ground for potential security breaches and potentially devastating cyberattacks. Though cyber risks are a growing threat to the operations and credit profiles of financial institutions, there have not been any major interruptions to the operations of banks in the Middle East. “GCC banks laid the foundation for success over several years by investing in infrastructure and systems, including equipment and software, to minimize their exposure to cyber risk, while also benefiting from supportive regulatory frameworks and cyber risk requirements,” said S&P Global.

Dubai’s Mashreq Bank joined forces with Israeli technology firm ThetaRay to roll out AI-driven solutions to help the Emirati lender detect financial cyber threats such as money laundering or fraud during cross-border payment transfers so that customers can act against suspicious transactions. Last November, Mashreq was hit with a $100 million fine by US regulators for violating American sanctions. Saudi Arabia and the UAE are revered in the region for their extraordinarily strong regulatory compliance requirements across all businesses, which further acknowledges data as a key asset and reinforces their commitment to ensuring that cybersecurity is not only the best in the region but globally. GCC central banks have in place regulatory frameworks and requirements centred on cyber security. Saudi Central Bank issued its cyber security framework in 2017, the Central Bank of Qatar published a circular outlining cybersecurity regulatory requirement in 2018 and the UAE central bank established a networking and cyber security operations centre to better protect the local financial system against cyberattacks last year. The Dubai Financial Services Authority (DFSA) also launched the DFSA Cyber Threat Intelligence Platform which offers enriched cyber threat intelligence information to users and financial institutions in 2019. Mastercard became the latest financial services provider to join the platform last December. The platform allows companies to share information about current cyber threats to stay ahead of cybercriminals. Banks are modernising every facet of their operations in an era of dizzying technological innovation while working on becoming more trusted by their customers. The relentless rate of change in the operating environment calls for progressive institutions to recognise that cybersecurity and data security is not merely a ‘technology problem’ but a wider business challenge that requires ownership and strategic development. mea-finance.com

SME FINANCING

SME’S - Supporting Middle East Successes

Recognition that SMEs represent a significant part of the regional economy and are one of the strongest drivers of economic development, innovation and employment is apparent, and nations across the Middle East have schemes in place to encourage their success

he events of the past two years have highlighted the importance of small and medium enterprises (SMEs) to the Middle East and governments have made supporting the sector a priority throughout the pandemic. Deloitte said that the contribution of SMEs to national economies and employment generation has been widely recognised in the MENA

area, making these businesses important drivers of the economy. SMEs represent a significant part of the global economy and are one of the strongest drivers of economic development, innovation and employment. The sector is playing a pivotal role in economic recovery in the Middle East as some of the regional countries seek to wean their economies off heavy

Banking and Finance news in the MEA market

reliance on oil revenues while enhancing sustainable and inclusive growth. Very few SMEs can thrive in times of uncertainty and chaos. That is why governments in the region have stepped up efforts to capture growth opportunities through several initiatives including the setting up of an SME-exclusive bank in Saudi Arabia, UAE’s ‘Operation300bn’ and ‘Make It In The Emirates’, among other programs. The International Monetary Fund (IMF) said that most Arab governments have committed to reforms to foster private sector-led inclusive growth, including the adoption of policies to support SME development. The outbreak of the pandemic triggered a wave of digitalisation and there is a rapid shift toward interacting with customers through digital channels. Start-ups, which are a critical subsegment of SMEs, have become important sources of innovation as technology-led companies that are

leveraging the cloud, artificial intelligence (AI) and machine learning (ML) have been key drivers of development. A key ingredient to a thriving SME ecosystem is funding. The SME Finance Forum estimates that $186.3 billion is required for SMEs in the Middle East to realise their full potential. SMEs struggle to get access to capital and the financing gap for small businesses is well-documented around the world and the Middle East is no exception.

SME financing SMEs play a critical role in most economies, particularly in developing countries. The sector represents around 90% of businesses and more than 50% of employment worldwide. Though governments in the Middle East have implemented an array of measures to ramp up lending to SMEs, access to finance ranks as a major constraint to the sector’s growth. “SMEs are less likely to be able to obtain bank loans than large firms; instead, they rely on internal funds, or cash from friends and family, to launch and initially run their enterprises,” said the World Bank. Funding commitment to small businesses is key in realising the sector’s overall contribution to sustainable growth in the Middle East—a region that is home to some of the world’s largest energy exporters including Saudi Arabia and Qatar. Middle Eastern countries have adopted several strategies to encourage the financial services sector to extend credit to SMEs but the most prevalent are credit guarantees and credit registries. “There is a need now more than ever to support the sector by widening the offerings and financial instruments available to SMEs to cater to their unique financing needs,” said Deloitte. Beyond funding, financial institutions in the region are creating nimbler new and alternative credit scoring models that can better predict credit risk for smaller SMEs, leveraging the cloud and AI technologies that are already mainstream in other parts of the world including Asia. Banks are also

A DIGITALISED SME HAS THE CAPABILITY OF REACHING A LARGE UNIVERSE OF CUSTOMERS AND SUPPLIERS QUICKLY, SAFELY AND EFFICIENTLY – Mastercard

required to have a clear understanding of the businesses they are funding and in doing so, develop financial products and services that meet the needs of small businesses and minimize risk. The Middle East financial services sector is playing a critical role in supporting SMEs to navigate the prolonged pandemic crisis despite the rampant inflation and its dampening effect on global growth—which is creating a difficult operating environment. Last June, HSBC committed $5 billion in support package through 2023 to help “strong” UAE-based companies to advance their growth plans as the Gulf state is also introducing funding initiatives to drive sustainable growth. UAE’s Emirates Development Bank (EDB) launched a $27.2 million (AED 100 million post-COVID acceleration initiative ‘Sanad’ in March to extend flexible loans to Emirati-owned and managed businesses to accelerate growth post the pandemic crisis. EDB signed agreements with several local lenders including Bank of Fujairah, RAK Bank, Dubai Islamic Bank as well as Ajman Bank and Bank of Umm Al Qaiwain to offer credit guarantees and facilitate financing options for small businesses including start-ups. Meanwhile, Saudi EXIM Bank inked a tripartite MoU with Monsha’at and the International Islamic Trade Finance Corporation to launch a program to support SMEs’ exports in April. Monsha’at, the Saudi General Authority for SMEs extended more than $2.93 billion (SAR 11 billion) in funding to small businesses last year compared to $293.3 million (SAR 1.1 billion) in 2020.

SMEs are often the hardest hit when crises emerge, and the pandemic has been no exception. However, banks in the Middle East are also collaborating with agencies such as Dubai SME, Etihad Credit Insurance and Abu Dhabi Exports Office in the UAE, Monsha’at in Saudi Arabia and Egypt’s Micro, Small, and Medium Enterprise Development Agency to meet the funding needs of the sector.

An enabling environment SMEs are poised to play a pivotal role in underpinning the pace of economic recovery in the Middle East as regional countries, large and small, are emerging from the impact of the pandemic. Mastercard said that at the policy level, the potential for private-sectorled economic growth has prompted many governments in the Middle East to institute reforms. The development of SMEs in the region is seen as a major step in the right direction and every country is running programs to support the sector. Several countries including Bahrain, Egypt, Lebanon and Morocco have dedicated SME strategies while the UAE has laws and others such as Algeria, Jordan, Qatar as well as Saudi Arabia and Tunisia have incorporated s m a l l b u s i n e s s e s i n to n a t i o n a l development strategies. However, McKinsey highlighted that while it is important to consider the totality of all SME subsegment needs, SME-development agencies should focus their limited resources on businesses with the highest potential for impact. The UAE created the Ministry of State for Entrepreneurship and SMEs in 2020 as part of the government’s broader mea-finance.com mea-finance.com

SME FINANCING

strategies to promote entrepreneurship and support small businesses. UAE’s economy ministry also unveiled a new vision for the National SME program in March, which is aimed at providing small businesses in the country with growth initiatives and improved access to markets. The Gulf state also unveiled ‘Operation 300bn’ in March 2021, an initiative that is aimed at boosting the industrial sector’s contribution to the country’s economic output to $82 billion and establishing around 13,500 SMEs in the next 10 years. Under the ‘Operation 300bn’ initiative, EDB pledged $8.2 billion in funding to SMEs and start-ups in sectors considered a priority to the country’s economy. S a u d i A ra b i a a p p ro v e d t h e establishment of a bank for SMEs in February 2021. The kingdom’s commerce ministry said that the digital-only bank is expected to bring together all financing solutions under one umbrella to allow SMEs access to appropriate financing and achieve stability and growth. Abu Dhabi’s $13.6 billion Ghadan 21 stimulus fund, which was unveiled in 2019, is also aimed at accelerating economic growth by providing an $817 million SME credit program. The initiative is also backing Abu Dhabi’s $1.6 billion supply-chain financing for SMEs which was launched in January 2021 to help small businesses weather the impact of the pandemic. Egypt also seeks to boost the potential of more than 2.5 million small businesses in the country as part of its Vision 2030. The European Bank for Reconstruction and Development (EBRD) joined forces with the Export Development Bank of Egypt in May to step up support for SMEs with a financing package worth $25 million. Egypt is a founding member of EBRD and the multilateral development lender has invested $9.4 billion in 146 projects since 2012. Middle East governments’ support is a critical component of entrepreneurship ecosystem development and analysts believe that the most effective way to

support SMEs is by pairing financial support with advisory services.

Digital solutions The increasing demands from digitally s a v v y c o r p o ra te a n d c o n s u m e r customers are forcing service providers to fundamentally calibrate their operating and business models. SMEs are digitalising their operations, leveraging the booming industry of e-commerce and marketplace platforms to drive sales. The digitalisation of business models is having an impact on SMEs’ interactions with providers and the majority of small businesses in the Middle East expect to be able to engage with their banks through a variety of digital channels.

Careem, Egyptian mobility start-up Swvl and Amazon’s takeover of Souq.com, governments in the region are turning one or more of their cities into start-up hubs. The Dubai Government launched the $272.2 million (AED 1 billion) Dubai Future District Fund to support seed-to-growth stage start-ups last November as part of the Middle East commercial and trading hub’s strategies to boost the growth of tech SMEs. Bahrain has over the years sought to market itself as the region’s technology hub amid intensifying pressure from its Gulf neighbours including the UAE and Saudi Arabia. The Gulf state launched StartUp Bahrain in 2018, a government initiative that brings together

SMES ARE LESS LIKELY TO BE ABLE TO OBTAIN BANK LOANS THAN LARGE FIRMS; INSTEAD, THEY RELY ON INTERNAL FUNDS, OR CASH FROM FRIENDS AND FAMILY, TO LAUNCH AND INITIALLY RUN THEIR ENTERPRISES – The World Bank

“A digitalized SME has the capability of reaching a large universe of customers and suppliers quickly, safely and efficiently,” said Mastercard. Middle East governments are expanding their productivity programs toward digital adoption or setting up dedicated programs to help SMEs deploy AI technologies in their processes and products. Abu Dhabi-based Khalifa Fund expanded its partnership with regional e-commerce giant Noon in February to boost local SMEs’ digital expansion plans by waiving setup costs and offering reduced fees. The outbreak of the pandemic also forced the Middle East’s start-up ecosystem to adapt to the changing landscape to meet customers’ evolving demands and expectations. Following the success stories of Dubai-based ridesharing platform

Banking and Finance news in the MEA market

entrepreneurs, corporates, investors as well as incubators and educational institutions to promote start-up culture in the country. McKinsey said that as governments develop start-up hubs, they should focus on several pain points that confront entrepreneurs such as navigating the administrative requirements to start and run a company and accessing the competencies needed to run a business. Governments in the Middle East are conscious of the challenges that entrepreneurs face and have set bold targets to address the issue. The launch of scale-up programs to provide comprehensive support, facilitating access to finance, networking, consulting and mentorship is also expected to help small businesses unlock their potential and grow faster.

A billion lives change, every time we do better. That’s why, we never stop. Infosys Finacle is a global industry leader in digital banking solutions, partnering emerging and established ﬁnancial institutions around the world, to Inspire Better Banking. With every improvement we make, we impact the ﬁnancial lives of more than a billion people and millions of businesses across 100+ countries. That’s why, we are committed to the relentless pursuit of Better in everything we do.

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COVER INTERVIEW

Historically Modern Fernando Morillo Lopez Senior Executive Vice President and Group Head of Retail Banking describes how that from their earliest days, their values and inherent drive to innovate has kept Mashreq at the forefront of the industry

Fernando Morillo Lopez, Senior Executive Vice President and Group Head of Retail Banking

ashreq has provided retail banking and financial services for fifty-five years. How the past three compared with the previous fifty-two?

Quite clearly, the world of financial services has been upended over the past three years, but for Mashreq, it represents a continuum of an approach that has defined our entire history. Whatever the historic context, the common thread has always been innovation. In the 1980’s we were the first UAE bank to install ATM cash dispensers; we were then the first to issue debit and credit cards and the first to introduce consumer loans. Now, in the context of the digital revolution, we are simply doing what we have always done, which is to shape the future of finance within the context of today’s historic opportunities. What is quite different, however, is the pace and almost existential nature of change. The expedited scale of the post-COVID digital economy is such that we have to exist in a state of perpetual flux if we are to successfully create the solutions and services that our clients need. So far, we have more than delivered on that mandate through the creation and deployment of leading digital propositions such as our NEO account for Individuals, NEOBiz for SMEs and NeoPay for merchants and consumers.

Banking and Finance news in the MEA market

Each of these digital-only accounts has served as a pioneer in the UAE market - and enormously successful in a concise timeframe. What that tells us is that our clients have fully embraced digital finance and are hungry for meaningful, everyday digital engagement. The proof is in the accelerated growth of digital onboarding across our platforms. In 2021 we saw our new NEO and Personal Banking acquisition increase by 82%, whilst the acquisition of new NEOBiz customers increased by over 400%. That latter number tells a story – not only of the explosion of SMEs and entrepreneurial activity in the UAE but also the attractiveness of the NEOBiz proposition. Additionally, NeoPay’s volumes have grown by 50%, and the use of both online and mobile channels is many times higher than the conventional business, consolidating our shift to digital-only channels and rewarding Mashreq’s determination to lead in the digital space. This accelerated growth has resulted in a remarkable financial performance. The Mashreq Retail Banking Group (RBG) brought in nearly AED 500 million in net profit in 2021, thanks to a surge in consolidated assets, liabilities, and revenues of over 20% annual and a 10% fall in the cost to serve over the year. It’s also important to say that the stateof-the-art digital infrastructure set up by the UAE government in the last years, like eKYC, FaceBiometric KYC, and UAEFTS is really helping accelerate digital growth in the country. Our flagship digital products (NEO, NEOBiz and our corporate platform for Global Transaction banking) have all been connected to this infrastructure to scale up and provide more support for our customers and growing businesses than ever before. Examples of this are the integration of our digital onboarding with EFR (Electronic Face Recognition) and the solutions that we have developed with strategic partners and free trade zones through our NEOBiz Connect – Open API Banking – and blockchain platforms.

Finally, we are also connecting with multiple private players across the digital ecosystem, such as with the e-commerce platform noon.com, resulting in the UAE’s first e-commerce co-branded credit card when it was launched in 2020. That partnership has flourished, and in March 2022, we launched the Mashreq noon VIP Savings Account, which can be opened within minutes through the Mashreq app or Mashreq website with no paperwork required.

WE CERTAINLY BELIEVE THAT EMBEDDED FINANCE WILL BE THE FUTURE OF BANKING

The noon.com partnership is just part of a much bigger digital picture at Mashreq. Our roots in digital are becoming more profound, broader and stronger as we expand our own digital assets and connect them with strategic digital partners across our entire footprint in the Middle East.

What would you define as the top three achievements of Mashreq Bank throughout its history? O n e of t h e m ost ext ra o rd i n a r y achievements is the fact that Mashreq Bank has so successfully navigated more than 50 years of change, never failing to adapt. Few organizations stand the test of time and still retain relevance. Even fewer manage to actually reshape the industry as the world around us changes. That is what Mashreq has done, and it

is very special – very unusual. Mashreq Bank is not so much reacting to the digital economy but shaping the role that finance interacts with it – a very real sense of proactivity that places it at for forefront of change, as a leader, not a follower. I n t i m a te l y c o n n e cte d to t h a t longevity is the immeasurable economic contribution that Mashreq has made to the UAE. With its strong roots in private and retail banking, the fact that Mashreq Group has also successfully forged a powerful commercial and investment bank is a great achievement in itself. We have helped to finance multiple buildings and projects across Dubai’s skyline, many of which are now iconic landmarks, and our services have supported thousands of SMEs that make up a crucial part of the national economy. We have also empowered individual customers with a host of personal banking solutions to manage their dayto-day responsibilities and achieve their financial ambitions. That is a legacy that goes way beyond the present and stretches into future success for those that benefit from the economic foundations that Mashreq has laid down over the years. These outcomes stem from a track record of organic development over many years – growth that comes from our reputation for service excellence, innovative product launches and robust digital propositions across our retail, corporate and international banking propositions. Today, we stand as one of the largest financial institutions in the region, with retail offices extending from the UAE across markets such as Egypt and Qatar and corporate banking and investment offices serving in some of the world’s leading financial centers in Europe, Asia, Africa and the United States. This transformation is a testament to the Bank’s forward-looking strategy over the decades, as well as the valued support of the UAE Government, regulators, our strategic partners, and most of all, our customers. mea-finance.com

COVER INTERVIEW

As one of the largest regional retail banks, how does Mashreq maintain agility in the face of increasing competition and digital disruption? Agility at Mashreq is driven by the way we work. We have established an incredibly agile operating model across the Group and within retail. We have set up multiple teams across business lines that place technical, digital and business people to work in an integrated manner: this delivers a speed of response and the agility to pivot in real-time. The Mashreq Centres of Excellence and our Work from Anywhere model provide us with a fluid, enabling workforce that is fundamental to our ability to operate like a fintech. We have also fully embraced fintech innovation and have done so since way before the pandemic. We are not only open to collaboration and cooperation with fintechs across the ecosystem but are investing and partnering up with select fintechs such as Cashew (in

the BNPL space) and Nymcard (virtual cards provisioning), and Touche (F&B specialized software). Other examples include our strategic alliance with the Dubai International Financial Centre and the KYC and client onboarding fintech developer ‘norbloc’, which delivered the region’s first-ever production-ready blockchain KYC data-sharing consortium to support businesses in Dubai. This latter alliance is essential, not least because of the 2021 UAE Blockchain Strategy. The future vision is for the consortium-run ecosystem to serve the greater good by improving the ease of doing business as well as uplifting customer due diligence standards in the UAE. The collaboration with our fintech partners is just an example of how we strive to add value to everything we do – by innovating and co-creating. Similarly, adding value to the way we engage with and serve our customers has always been at the heart of Mashreq’s differentiation strategy since its launch. We are one

Banking and Finance news in the MEA market

of the few banks to have a dedicated Client Experience Unit with a Chief Client Experience Officer who reports directly to the CEO. We have a three-pronged approach of ‘innovation, consistency and prudence’, which feeds into the customer experience and is fundamental to our ability to flex as the world around us changes.

What are Mashreq’s retail banking plans for growth in the region and beyond? We believe in sound planning, with ambitious plans for growth in assets, liabilities and revenues of over 20% - all of which are underpinned by our ongoing strong financial performance and risk management culture. The growth that we delivered in 2021 reflects the strength of the Bank’s offering and the excellent financial position that is needed to invest and grow. But none of that could be delivered without having a superb set of digital solutions – and this is how we are delivering

significant strategic growth that is relevant and sustainable. We will continue to roll out solutions like NEO, NEOBiz and NeoPay across all the markets where we operate. Those products are also an important enabler of financial inclusion, which is an increasingly important focus for us. We are fundamentally geared towards driving the financial inclusion agenda not just through widening access to financial services and products but through supporting individuals, SMEs, job creation and the broader digital economy. As we look ahead, we will consolidate our proven role as the best digital player in our markets and double down on our work to deepen these capabilities across the digital ecosystem. And as we expand across our existing markets and into new geographies, everything we do will be enhanced through alliances and strategic partnerships, leveraging our cloud infrastructure and our open API banking approach. We certainly believe that embedded finance will be the future of banking. We are looking to expand strategically and sharpen our points of difference as a challenger bank and be an active banking-as-a-service (BaaS) participant to provide our financial services and solutions to our partners and serve their customers. For us, it is vital to have a focused geographic strategy to concentrate our differential digital capabilities on serving our specific clients’ needs across segments. We are focused on building the best digital propositions in the UAE and on extending them to Egypt, a growing market with a significant scale where we have operated since the early 2000s. We are also looking at operations in Saudi Arabia, which is another critical mass market, as well as in Oman to complement our GCC footprint. Further afield, we are applying for a digital license in Pakistan, where we would be honored to contribute to its financial inclusion with our NEO and NEOBiz platforms. As we build internationally, we are targeted to achieve a 25%-30% revenue

I am especially pleased that Mashreq has aligned its initiatives with the UNSDGs, with a particular focus on nine of the 17 goals. The principles of ESG have been embedded into the organization’s values, which include displaying and incorporating the highest levels of social responsibility, integrity and transparency. Mashreq has several ESG wins across its global business portfolio in addition to business initiatives from across our business, such as corporate financing, advisory services, SME initiatives, and digital touchpoints, all adding to the overall ESG momentum. We are also aligning our activities with the United Nations Principles for Responsible Investment (UNPRI) and with the Sustainability Accounting Standards Board.

contribution from our international geographies over the next few years. Finally, I think it’s also important for us to leverage our connectivity and hybrid working strategy to maximize talent, skills and enabling systems and structures in all of the geographies where we work. As we grow – and we are expanding rapidly – it becomes ever more important for us to maintain a culture of closeness and collaboration, even for those working thousands of miles away. And our talent is widespread, multi-cultural and exceptionally diverse.

Values and ESG are now at the forefront of key concerns for banks. What is Mashreq’s approach to these crucial considerations? The Bank has continuously operated under the core value of responsibility, across all we do and across every touchpoint. We have embarked on an exciting ESG journey of inclusion and diversity, and there is much more to come. It is a key priority for us in the coming period, and we are currently in the process of finalizing the Material Topics, the Sustainability Framework and our overall ESG strategy.

What are the challenges and the rewards of heading a top retail bank in this region? It is an incredible privilege to be able to operate in such a progressive and dynamic market like the UAE, in huge growth markets such as Egypt and in a region that is growing in such an innovative way, with such a culture of optimism. There is a powerful ‘can-do’ mindset here that makes it possible to achieve incredible things. I am thrilled to be doing so in a Bank that has such a strong history of shaping how finance works – and to be at the forefront of reshaping the world of banking right now as the world around us changes in so many exciting ways. The challenge is to create the financial services landscape of the future: it is a revolution that is as challenging as it is exciting. The speed of change presents challenges, such as being able to provide our clients with the right pace of innovation, which itself depends upon sourcing the right talent in an environment that is in constant flux. There is steep competition for the very best talent – but I know that Mashreq is far and away the most exciting challenger bank to be working for with incredible opportunities - as has recently been acknowledged by LinkedIn as one of the Top 10 places to work in the UAE. mea-finance.com

DATA SECURITY BANKING TECHNOLOGY

Digitizing Saudi Arabia’s Banking Markets Backbase’s Ahmad Ghandour Managing Director for Saudi Arabia and Regional Sales Director, Middle East talks with MEA Finance about the digitisation of banking in the Kingdom of Saudi Arabia and the role that Backbase is playing in this regionally important transformation

ow has the market for the digitization of banking and finance developed since the Saudi Central Bank’s launch of Fintech Saudi in April 2018?

We›re seeing an actual revolution taking place in the region – and specifically in Saudi Arabia – in terms of digitization. SA M A (S a u d i A ra b i a n M o n eta r y Authority) is constantly introducing new regulations and initiatives to support the complete digitization of the financial sector. We have seen banks become digital champions in KSA while others are either digital-smart or undergoing a digital transformation. The entry of new players – for example neobanks and fintechs – are definitely a threat to a traditional bank’s market share, where only by digitizing will they be able to compete. Other factors come in place in the digital drive: COVID, customer preferences and needs, and the need to be ready for open banking. There is no bank in the Kingdom which does not currently have a digital initiative or project.

How is the Kingdom achieving its digital initiatives?

Ahmad Ghandour, Managing Director for Saudi Arabia and Regional Sales Director, Middle East, Backbase

Banking and Finance news in the MEA market

As I mentioned earlier, it›s happening everywhere. Banks, financial institutions, insurance companies, and lots of fintechs. Digitization is a vital component of Vision 2030, which the Saudi government and all the operating organizations in the Kingdom are actively working to achieve. We have seen the introduction of safe government services come to place as

part of phase two of the country’s digital strategy. We are currently in phase three of the strategy, which aims at 2024 for a full e-government. All these initiatives will attract new digital initiatives, and financial services is the key player in all those initiatives.

How is Backbase helping the Kingdom meet its banking digitization aims? We have moved a big part of the region’s operations to become locally based out of Riyadh, and we are growing a big team in the Kingdom. This will enable us to stay as close as possible to our clients and partners in the Kingdom, as well as enable a regular transfer of knowledge between Backbase and local talents. Backbase’s role in the digital story is to modernize and orchestrate any financial instituation’s customer touchpoints, transforming multiple siloed banking channels and legacy applications into a truly engaging banking experience. Being digital and up to the expectation which Vision 2030 aims for is not only about having a portal on an app. At the end of the day, when clients come to a bank to get the services they need, they are coming to the bank because they need financial help. That help will only be meaningful to the client if they get an engaging experience with his/her bank to achieve that financial stability he/she is looking for. We at Backbase facilitate all that and enable financial institutions to become the trusted advisor for their clients while capturing all the important moments in their client’s lifecycle and offering him the help or support he needs at those stages.

What are the current digital finance trends in Saudi Arabia? Well, there are a lot. We get to see a lot of services that are coming into the market like buy now, pay later, as well as different types of banking, like social banking, non-linear banking experiences, as well as data-driven

banking and many more. Banks and financial institutions in the Kingdom fully understand the need to change the way they used to do banking and shift into more customized experiences (non-linear) and journeys for each and every customer driven by data analysis and social interaction. The future of banking is a combination of data-driven, AI initiatives combined with social interactions and IoT.

Currently few neobanks operate in Saudi Arabia – Hala, meem, and the recent approval of D360. Do you expect many more to start operations in the next two years? Definitely, SAMA is really doing things in

Vision 2030. What does this mean for your business in the Kingdom? Open banking has a lot of benefits to the Saudi market – as well to all the banks operating in Saudi Arabia – and we see that the Saudi open banking system is a very stable, resilient and trusted banking sector, which can be attributed to SAMA›s regulations and the supervisory role that it has over the banking and the payment space. So, what we see is that open banking can really support Saudi’s financial sectors and the development of the broad range of benefits associated with it. Open banking really leads to direct innovation. It leads to enhancing the opportunities to develop products and services, some

THE FUTURE OF BANKING IS A COMBINATION OF DATA-DRIVEN, AI INITIATIVES COMBINED WITH SOCIAL INTERACTIONS AND IOT

a great way. In 2018, when they launched Fintech Saudi, they launched the new era of innovation – resulting in new entrants to the market by neobanks and fintechs. We expect many more digital banks and neobanks and fintechs to enter the Saudi market as the market is growing rapidly along with the growth in the budgets which SAMA and the Saudi government have allocated for digitization across industries. This is really an exciting time for the people in the Kingdom and for us to be part of this nation-wide transformation.

The Saudi Central Bank released its open banking policy in January 2021 as part of the Financial Services Development program of

that might be done in-house and some of them that will definitely require a key digital player to offer that. So, it definitely increases the value propositions and the revenue streams for all these banks. Having said all this, open banking is definitely an opportunity, it›s an opportunity for the Saudi banking sector, as well as for Backbase, because this is exactly where we want to be. At the end, what we are now seeing in Saudi Arabia are all these amazing trends that are taking place in the market, and we see that continuing for the next ten years at minimum. We wish the Saudi government and SAMA all the best in achieving the vision, and we assure them that we are here to support and expedite the journey for them. mea-finance.com mea-finance.com

DATA SECURITY BANKING TECHNOLOGY

The Digital Future of Corporate Banking The pandemic has pushed corporate banking into a digital overdrive. In this article Sriranga Sampathkumar VP & General Manager - Middle East & Africa, Infosys, talks about several key trends and focus areas that corporate banks must prioritize to enhance their competitiveness

hy this research

In the past, disruption in financial ser vices was mainly associated with retail banking. But in recent times, corporate banking has also experienced u n p re c e d e n te d t u r b u l e n c e. T h e business, which was already grappling with geopolitical and macroeconomic uncertainty, increasing regulation and next-gen competition, had to also contend with the impact of the pandemic. Almost overnight, corporate banks were forced into digital overdrive. To understand how corporate banks were coping with digital transformation and its challenges, Infosys Finacle, in partnership with Strategic Treasurer and Red Hat, recently released a corporate banking digital innovation research report. The research covered more than 125 senior corporate banking executives working in all areas of finance, from institutions with operations around the world. The timing of this research is significant, coinciding with the start of

a post-pandemic era where innovation and digitization are more crucial to a bank’s success than ever before. Covering key trends, emerging customer needs, innovation focus, competitive landscape, new business models and digital transformation maturity, this report helps banks benchmark their progress versus others, and drive change within their organizations. Here are some key findings:

Corporate banking differentiators are changing

Sriranga Sampathkumar, VP & General Manager - Middle East & Africa, Infosys

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While continuing to rely on face-to-face client relationships to build the business, corporate banks will also use “digital” to differentiate in the future. Three-fourths of survey respondents said that their existing client franchise and strength of relationships was their biggest differentiator at present; but a sizeable 66 percent also said that come 2026, the presence of a full suite of digital self-service treasury offerings, as well as superior customer engagement, would

provide the greatest differentiation. This is a natural consequence of the rapid digitization of corporate customers, who are demanding digital self-service in cash management and other treasury operations. With even small businesses following this trend, UAE’s RAKBANK has gone all out to differentiate itself through digital engagement by offering fully digital account opening facilities for SMEs. The vision is to provide fully digital account opening to cater to the surge in digital engagement.

New business models are emerging Corporate bankers acknowledge that the universal banking model – make and distribute own products through own channels – will not work in the digital age. An overwhelming majority of 72 percent banks said that the future of their business lies in the platform model, and in leveraging diverse partner networks within their external ecosystems. This will come at the expense of the universal model. Besides offering their own products, banks will enable access to complementary partner products such as insurance, joint products such as syndicated loans, and even third-party rival products. Emirates NBD’s mobile-only banking facility for SME businesses, E20, is a leading example of a digital bank. It is UAE’s first digital business bank that targets SME business, start-ups, Fintechs, insurtechs etc., allowing them to perform their everyday banking requirements on their smartphone and an array of digital tools to assist the business owners in managing their businesses.

Who is innovating where, and with what success? Incumbent corporate banks are likely to innovate within their comfort zone of traditional services, such as lending, deposits, and trade and supply chain finance. The risk is that they could end up ceding the advantage in lucrative segments, such as cash management,

foreign exchange and payments, to fintech firms who are focusing on these opportunities. As open banking takes hold, it will help rivals build connectivity solutions – 45 percent of respondents said that fintech would lead innovation here – and create new business propositions across cash management, payments and financing solutions. Respondents also believed that these were the growth areas – more than a third anticipated growth of 11-25 percent in these segments, while some felt it could even top 25 percent, in the next three years.

deployed it with success. Without APIs, the vast majority of banks will not be able to transition from universal banking to platform and ecosystem models. Corporate banks must progress their strategies by orchestrating a suite of APIs for sharing data and collaborating with partners and customers. Here, the example of United Bank for Africa (UBA), a Nigerian pan-African financial services group, may be useful. By leveraging RESTful APIs to authenticate and reconcile corporate transactions, UBA consolidated the transactions of

CORPORATE BANKERS ACKNOWLEDGE THAT THE UNIVERSAL BANKING MODEL – MAKE AND DISTRIBUTE OWN PRODUCTS THROUGH OWN CHANNELS – WILL NOT WORK IN THE DIGITAL AGE But not all banks are moving forward at the same pace. There are many whose outdated infrastructure is impeding the innovation agenda. In the survey, a very substantial 64 percent of respondents said that legacy technology and system integration challenges remained the key barriers to innovation.

The state of modern technology adoption Overall, the research found that corporate banks had achieved only modest success in deploying digital technologies – for example, though 85 percent of participants understood the importance of advanced analytics, a scant 12 percent had successfully leveraged the technology. This is a significant finding because analytical insight is imperative for corporate banks to understand customers, identify new opportunities and improve cost efficiency. The story repeats with APIs. 84 percent of respondents acknowledged its importance, but only 10 percent had

700 branches in a customer database to facilitate tracking by printing a transaction number on depositors’ acknowledgment slips. This also helped customers to reconcile sales and inventory online.

Looking ahead As corporate banks embrace digital technologies, they recognize that they must also reimagine customer journeys, innovate business models and partner with their ecosystems to complete the transformation. This is easier said than done and will take years of commitment and resolve from institutions that are still quite traditional in their setup and operations. But they have no choice but to adopt. For the future of corporate banks is about finding new ways of creating and delivering value for their organizations and their customers by embedding banking services in customer journeys, generating new, data-led revenue streams, and curating ecosystems of services for customers. mea-finance.com mea-finance.com

DATA SECURITY BANKING TECHNOLOGY

The Role of Big Data & Cloud in Banking With the rapid increase in data generation and exponential growth in technology, working culture in industries and individually owned businesses have undergone a huge transformation. The banking and financial sector is also aligned to the digital revolution

he financial sector is global today, and regional banks have the responsibility to keep pace with the changing needs of customers, or risk being left behind unless they develop a digitisation strategy. The UAE has seen a seismic shift in the banking sector in recent years; a rapid pivot towards digitization, but many banks are now lagging behind. Cloud computing and cloud data storage are still nascent in the region, but emerging technologies are poised to help the region’s banking sector shift to more cost-effective, always-on cloud computing-based solutions. Using cloud-based computing allows banks to optimize infrastructure and performance. Big Data is another technology which is an accelerator in the financial business. It works on 4 V’s i.e., Volume, Variety, Velocity, and Veracity. In fact, technology is such an integral part of banking that the financial institutions are now almost indistinguishable from IT companies. Organizations use data and analytics to gain valuable insights to make better business decisions. Financial services use big data analytics in forming back-testing trading strategies to take better investment decisions and achieve consistent returns for their valuable customers. They have to utilize Big Data to its full potential to remain in line with their specific security protocols and requirements. Banking institutions actively use the information within their reach during a bid to keep their customers happy. By doing so, these institutions can limit fraud cases

Shankar Garg, Managing Director, Xebia - MEA and stop any complications from happening in the future. Ways where Big Data comes into play with banking operations and its functions:

1. Reduce the risk of having NPAs

PAs or non-payment of loans have N a negative impact on the bank’s reputation in the market, which can lead to credit losses. The data involved in identifying these bad debts is huge and Big Data accelerates the analysis of these large amounts of data for each customer and helps speed up the decision-making process. While issuing loans and credits, big data helps to analyze all possible risk factors. This makes the approach to each customer more personalized and flexible.

2. Evaluating Market Sentiments

dvanced data processing tools now A allow analysts to urge a fast snapshot of the market’s opinion of a particular commodity, economy, sector or currency. Predictive models and opinion mining can now be used to complement traditional financial analysis and help make better trading decisions.

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3. Cybersecurity ost fiscal services are entirely M dependent on computer systems. Although they started to digitalize processes initially, a lot of information systems (IS) remained obsolete. In fact, numerous security incidents that have happened in the past have been linked back to maladjusted tools. In some cases, software patches simply are not installed. BigData helps the banks in analyzing the previous cyber-attack data’s and thus assists in developing a more efficient cybersecurity strategy. Therefore, banks need to take a broader view across all channels and client actions to defend themselves against cyber-attacks. Technologies including machine learning, artificial intelligence and big data can be stationed to discover such suspicious activities. With strong identification and authentication styles coupled with AI and ML, banks can sift through large quantities of data in real time and identify suspicious activity.

4. Chatbots or Robot Advisers

he advancement of technology in the T banking system is reflected through chat bots which not only allow fund transfer to friends, family and businesses but also could be used to schedule money transfers and provide assistance in reporting frauds. Amongst all the other uses of chat bots in banking, the most critical one is providing aid during the scenario of account hacking. The chat bots send notifications to the user and alerts them that there has been an attempt to hack the account and connects them with the agents on a priority basis. It saves the account holders from falling prey to suspicious conditioning and guards their hard- earned money. The financial sector is in a state of disruption. Emerging technologies along with existing ones are bound to change the way financial organizations operate while imparting a whole new meaning to customer satisfaction and retention.

DATA SECURITY BANKING TECHNOLOGY

SRE: The Best Pit Crew to Help you win the Fierce BFSI Race Anand Rangan EVP, Sales & Business Head – EMEA, QualityKiosk Technologies aptly refers to the fast and competitive world of Formula 1 racing to illustrate the race for digitisation in banking and finance

he BFSI industry in the Middle East and Africa region is transforming at an exponential speed. One of the major factors spearheading the transformation is the increasing demand for digital-first financial services from the growing young population in the region. With over 108 million young people, the largest in the history of the region, the demand for digital-first financial services continues to increase in the. Combined with government regulations and extensive investments in fintech, the region has become a hotbed for digital BFSI innovation. With competition increasing and traditional players looking to expand their digital-first offerings, the race to become the preferred financial service partner has become fiercer than ever. As BFSI players look to zoom ahead and take the lead in this race, they will need to build digital applications with greater reliability to stay on course.

Traditional Approach to Digital Expansion: Risking a Breakdown After Every Lap Just like F1 cars, the infrastructure and operations of your digital application should be in pristine shape to support the pace of innovation. When taking a traditional approach to expansion, the infrastructure and operations perspective only comes into the picture after deploying the application. This traditional approach to adding new features can jeopardize

multiple aspects of the application including but not limited to performance, availability, end-user experiences, and incident management. This can be extremely disastrous in context to the BFSI industry as it can not only cause application outages but can result in compliance violations leading to significant monetary and reputational losses. Moreover, this can slow down the pace of innovation as a significant chunk of the time is spent in fixing the application for performance and reliability. With barriers to switching financial services becoming minimal, this can easily drive away customers to other competitors in today’s experiencedriven economy.

Site Reliability Engineering: The Best Pit Crew to Support Rapid Pace of Innovation As the name suggests, Site Reliability Engineering (SRE) is a software development practice focused on enabling organizations to build scalable and reliable systems. The practice stands at the crossroads of traditional software development and IT to assist businesses in proactively managing complex systems. Under the practice, software development principles are applied to IT operations to break down silos and reliably build scalable systems. By doing so, SRE empowers organizations to combine and drive their development and operations capabilities towards a common goal and

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Anand Rangan EVP, Sales & Business Head, MEA, QualityKiosk Technologies deliver seamless customer experiences with minimum disruptions. Another major aspect of the practice is to eliminate redundancy and impart speed to IT operations. To do so, SRE leverages automation to eliminate toil which is nothing but manual repetitive non-critical tasks that increase linearly with the service and eat into the productive time of developers and IT operations managers. By continuously identifying toil and managing it with automation, SRE provides BFSI players with a well-defined process to enhance efficiency, increase the pace of innovation, and identify areas of improvement. With SRE at the center of their development and operations practices, BFSI players can proactively improve their digital application for latency, performance, availability and end-user experiences to integrate digital resiliency into their systems and build a foundation for rapidly scaling systems. Through these principles, SRE makes it progressively easier to manage, maintain and operate an application through the different phases of the software development lifecycle. As competition intensifies and new technology-driven entrants disrupt the market, even the slightest of errors can result in financial service providers being left behind in the race. Reliability and digital resilience are emerging as the keys to taking an unassailable lead and SRE is the pit crew BFSI players will need to accomplish it.

DATA SECURITY BANKING TECHNOLOGY

NAVIGATING UNCERTAINTY:

Using New Technologies to Optimize Balance Sheets Dr. Mariusz Podsiadlo Global Principal Risk Management, Finastra reminds us that in a world where uncertainty is increasing, banks need to ensure they are properly equipped with technology that can help them be best placed for what may lie ahead

he global financial services industry has witnessed many extreme events. With ‘black swan’ scenarios such as the pandemic, low interest and high inflation rates and rapidly escalating climate change, increased risk and volatility have put financial institutions’ balance sheets under more pressure than ever before. Additionally, ongoing regulatory requirements for liquidity, capital and stress testing is reshaping how firms approach balance sheet management. The increased uncertainty and operating constraints have placed more

emphasis on the need for financial institutions to adapt quickly and deliver stable long-term performance. Advances in big data, cloud computing and machine learning are making this possible. These technologies are helping firms to apply prescriptive analytics to make better decisions, remain agile and find opportunities in volatile environments.

Implementing the right processes To optimize balance sheet performance, financial institutions need forwardlooking visibility on key metrics in areas of capital, funding, profitability and risk to

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assess the impact of environment factors, uncover trends and evaluate the riskadjusted quality of optimized strategies. Benefits include a future-focused view across multiple time horizons, the ability to leverage external data and more informed decision-making. The recommended process is comprised of four stages: 1. Environment or market simulation: this generates different scenarios to define the ‘universe’ for optimization. It may be focused on interest rate risk, for example, or include a wider set of risk and market factors. Similarly, a financial institution can incorporate mechanisms for generating extreme values for specific underlying risk factors, using their own or third -party toolsets. 2. A naly tics: using a soft ware platform to calculate the cash flow level forecast view of the balance sheet lifecycle, within the planned simulation horizon. In this step, capital, funding, profitability and risk are also calculated.

3. Optimization: robust mathematical optimization models are applied to the balance sheet forecast, against multiple future market scenarios generated in the analytics step, to arrive at an optimal balance sheet structure. 4. Actions: Users can then derive multiple actions to improve the balance sheet profile, its performance and risk resilience according to the optimization model’s setup. Benefits include smarter decisions around product reallocation, as well as funding and pricing recommendations.

Reducing manual processes Traditional, manual processes for annual planning and forecasting offer limited support for the first two steps, often lacking the insights and recommendations provided by prescriptive analytics. They also lack the flexibility to change or widen scenario assumptions, perform ad hoc simulations, or expand the metrics set. Monolithic architecture, poor IT performance, data quality and existing governance policies all limit the financial institution’s ability to effectively make smarter decisions. Considering these limitations, a good approach is to deploy an overarching, dedicated framework to deliver strategic planning and best recommendations to optimize the balance sheet under constraints. This can be achieved by investing in a data extraction layer as a foundation, which can then feed sourceagnostic tools, such as risk, analytical and optimization apps for a system migration with minimal intrusion or disruption. Thanks to advances in cloud based services and open API standards, time to market and costs to build have decreased dramatically. C o m p u te r- a i d e d p e r fo r m a n c e optimization, underpinned by complex data and behavioral pattern correlations, should be seen as an important part of the financial institution’s company-wide business continuity planning process and strategic vision. In comparison to manual processes, benefits include the

THANKS TO ADVANCES IN CLOUD BASED SERVICES AND OPEN API STANDARDS, TIME TO MARKET AND COSTS TO BUILD HAVE DECREASED DRAMATICALLY enablement of timely decisions and planning across multiple time horizons, to verify the probability of achieving stated goals. It can also help to identify any conflicts between multiple goals and prioritize them accordingly.

Defining goals and constraints To manage uncertainties, companies need to simulate the behavior and c o r re l a t i o n b et we e n g o a l s a n d constraints in three primary market environment scenario groups: the stable, business-as-usual scenario group; the most damaging group; and the most favorable. This enables informed definition and prioritization, which can be applied to the real environment scenario. There are a number of performance optimization tools available which can propose the balance sheet structure together with associated goals and constraints, considering all or the subset of the scenario groups simultaneously. For example, there are tools that employ stochastic programming methods to optimize with the presence of uncertainty. They can also be trained to use a large body of real, historical and theoretical scenarios. By using machine learning, especially deep reinforcement learning, these tools provide the ability to generalize and propose a concrete optimized balance sheet management plan, or actions, as a response to unforeseen events.

The role of platforms The trend towards open, cloud-based, and service-oriented platforms is shown by Finastra’s recent survey of 1,600 senior industry executives. 85% of respondents are already implementing or planning to implement Banking as a Service (BaaS) over the next 12-18 months.

We believe that a platform that provides balance sheet optimization with dynamically managed goals and constraints is the best way to tackle the challenges financial institutions will unquestionably continue to face. This platform must be capable of delivering the vital insights and recommendations required to successfully achieve specific targets for both management and business lines. Equally important is modularity. This avoids the ‘big-bang’ implementation challenge as users can start with the pillar of primary importance and supplement the others with already existing data or applications. An example of such a platform is Finastra’s open development and collaboration platform, FusionFabric. cloud, which orchestrates a large ecosystem of fintech experts who bring solutions and knowledge across different disciplines. For example, Straterix Scenarios, available on the platform and pre-integrated with our Fusion Risk solution, specializes in generation, design and application of scenarios in strategic business planning, capital and liquidity optimization, stress testing and risk management, leveraging advanced algorithms based on machine-learning and data mining techniques. By utilizing the benefits of a platform and the technologies offered by specialized fintechs, financial institutions can ensure they are implementing the best services which help them to optimize their balance sheet, reduce risk and make better decisions when faced with any event. After all, marketplace uncertainty is here to stay – financial institutions need to ensure they have access to the right tools and technology to effectively manage and plan for any events that lie ahead. mea-finance.com mea-finance.com

MEA FINANCE BANKING TECHNOLOGY SUMMIT 2022

Continuing Innovation in Banking and Finance The wave of digital transformation currently underway in the Middle East is expected to equip regional banks with the capabilities to keep up with evolving customer demands and expectations while maintaining a competitive edge in the market

he Middle East financial service sector is buzzing with talk and activity on digitalisation strategy and the artificial intelligence-enabled (AI) bank of the future will need to embrace emerging technology, remain agile to adopt evolving business models and be customer-centric. As the global financial system is scaling greater heights after emerging stronger from the pandemic, Deloitte said that banks should take account of the tectonic shifts reconfiguring the financial service

sector such as phenomenal growth in digitisation and fusion of technologies. Industry experts are cautiously optimistic and enthusiastic that AI, robotics and blockchain will usher the financial services sector into a new era while expressing concerns over risks inherent in disruptive digital technologies. The outbreak of COVID-19 brought about more than a decade worth of changes in the way banks do business in just a few months. Financial regulators in the Middle East are undisputedly mature when it comes to preparedness for open banking,

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compared to other emerging markets, while in the wealth management and private banking division, digitalisation is changing the way wealth managers deliver advice and serve their high-networth individuals (HNWI) clients. Over the past two years, the digital payments space has also gained significant traction in the Middle East as cash usage wanes. However, cybercriminal activities such as fraud, e-commerce data seizure and phishing attacks have also increased as the regional financial system swung to the “digital-first” approach MEA Finance hosted its Banking Technology Summit & Awards 2022 on 19 May in Dubai under the theme Continuing Innovation in Banking and Finance. The exclusive annual forum attracted leading bankers and technology professionals in the Middle East, who debated new developments in the financial services sector while identif ying emerging trends and opportunities in the region.

The world is changing in unprecedented ways and there is no secret that the lasting impact of the pandemic is the quantum shift to digital, Imane El Majdoubi, Director, Financial Services Industry, UAE at Microsoft said in her welcome speech. While in her keynote address, Raja Al Mazrouei, Executive Vice President, DIFC FinTech Hive, reflected on the journey of DIFC FinTech Hive. Being the first and largest fintech accelerator in the Middle East region, DIFC FinTech Hive was launched in 2017 to enable financial institutions to tap into the transformational opportunities that are coming through technology and the shift towards the digital. To date, the FinTech Hive has accelerated more than 160 start-ups in the past five years and the who raised around $272.2 million (AED 1 billion) in fundraising.

Open banking Open banking platforms allow financial services customers to securely share financial data in real-time and share account information as well as transaction history with external parties such as vendors, suppliers, business partners and other banks using Application Programming Interfaces (APIs). Moderated by Mohamed Roushdy, the Founder of Fintech Bazaar, the Open Banking, expecting exponential

growth to continue panel highlighted the growth and use of open banking and open APIs in the region. The discussion had the participation of Ali Imran, Head of Digital Services & Transaction Banking, Commercial Bank of Dubai; Dr. Nouran Youssef, Senior Financial Sector Specialist, Arab Monetary Fund; Peter Smith, Head of Policy and Strategy, DFSA; Vivek Porwal, SVP, Consulting & Banking Practice Head, Quality Kiosk Technologies; Saud Al Dhawyani, Chief Technology Officer, Emirates NBD and Ahmed Giyab, Business Development Manager, Loxon. Roushdy said that today’s world is wellconnected, and openness is happening not only in the banking sector but the entire financial service ecosystem. According to PwC, open banking has the potential to reshape the financial services landscape and several financial centres in the emerging markets, the Middle

CULTURE IS PARTICULARLY IMPORTANT. A FINANCIAL INSTITUTION CAN HAVE THE BEST STRATEGY AND A GREAT VISION, BUT UNLESS ITS CULTURE REFLECTS THE COMPANY’S VALUE AND THE SERVICE THAT IT AIMS TO PROVIDE TO END CUSTOMERS, IT WILL NOT FLY HIGH – Imane El Majdoubi, Director - Financial Services Industry - UAE, Microsoft

East included, are making considerable moves in this space. “Contrary to common belief open finance or open banking is only meant for the end consumer. The reality is if applied properly even the financial institutions themselves can benefit from it,” Imran said adding that with open banking there are benefits that come to end consumers. Consumers’ increasing desire for frictionless, more seamless and intuitive value-added banking experiences amid a surge in fintech firms and ‘challenger banks’, who are seeking to capitalise on these developments, are driving legacy banks to develop open and collaborative financial ecosystems. mea-finance.com

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Imran said that corporates and small to medium enterprises (SMEs) alike also have a set of benefits they get from open banking; an inevitable innovation that is forcing financial institutions to be where their clients are. Asked why incumbent banks such as Emirates NDB might be on the positive side by being pro-innovative, Al Dhawyani said that for centuries the financial services sector has been a closed ecosystem that nobody understood, but open banking as an initiative is now allowing financial institutions to open their inner architecture through APIs via third parties. “By leveraging API, open banking platforms authorise the sharing of data with third parties such as telecom operators, cloud providers and other banks to promote innovation, enhance financial services, ensure competitiveness and above all boost financial inclusions and promote accessibility,” Al Dhawyani said. From a regulatory perspective, Dr. Youssef said that the Arab world is not far removed from what is happening in the global financial ecosystem, but what is different is individual countries’ approach to open banking. She said that some countries in the Middle East are using

the regulatory sandbox to promote open banking solutions while others such as the UAE, Bahrain and Saudi Arabia have open banking frameworks in place though they differ in approach. The Saudi Central Bank (SAMA) introduced its open banking framework earlier in 2021, Bahrain’s central bank last September ordered financial institutions to implement the requirements for the second phase of its open banking framework by the end of June 2022 and the Central Bank of the UAE (CBUAE) have a FinTech Office to support financial innovation in the country. Dr. Youssef also said that some regional countries are establishing fintech hubs such as the Bahrain FinTech Bay while running hackathons at the national level to drive more solutions and give more education to the market. Asked about the UAE and Saudi Arabia’s approach to open banking initiative, Dr. Youssef said that the Gulf states’ approaches are phased, saying “they started with a market-driven approach but now it’s regulated.” DFSA’s Smith weighed in saying the question for regulators is whether they can mandate standards around the use of API and how much interplay as well as room there is? If regulators mandate standards such as what happened in the UK through

an industry-led initiative, then the question is are you leaving financial institutions enough room to innovate? he asked. “The real challenge for regulators, from a strategic perspective we see open banking and open finance as a necessary and potentially very interesting part of the whole innovation wave. Our strategic approach is to be facilitative as a regulator,” said Smith. He said that in the UAE, the DFSA’s strategic approach is to be facilitative while being conscious of risk including data security and cyber threats. The challenge facing policymakers and regulators is how to structure an open banking regime that balances the need for innovation, information security and privacy and does not inadvertently create an uneven playing field. On challenges that are confronting financial institutions while implementing o p e n b a n k i n g o r o p e n f i n a n c e, Vivek identified the government, the infrastructure—which is available as public digital infrastructure—and third, consumer adoption. Vivek said with banking and financial services providers, multiple use cases are emerging including account services and digital payments as well as new use cases that are evolving towards micro-savings public finance and personal finance.

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MEA FINANCE BANKING TECHNOLOGY SUMMIT 2022

Vivek, still on challenges, also said that unless the digital infrastructure is evolved to modernised application architecture, it cannot support the end-to-end customer journeys. “These are the challenges which need to be resolved when the support needs to be provided to business, when the decision is to go towards open banking and open finance,” he said. Taking a leaf out of the European market book, Giyab emphasized that consumers’ trust is “very important.” He said the recent study of the European market showed that 48% of banking consumers have negative opinions about open banking. “This is due to lack of education and basically the lack of trust,” said Giyab. After this panel debate, Yasar Yilmaz, Director, Head of Financial Services MEA, Microsoft gave a presentation titled Around the banking world in 8 minutes: What banks have been up to? Yilmaz spoke at length about the unprecedented digitalisation that ensued when the pandemic hit and global digital trends including open banking, open data and open finance.

Digitisation of Wealth Management The private banking and wealth management sector has remained largely on the sidelines in an industry where digitalisation has transformed much of the financial services and products.

BY DEFAULT, CUSTOMERS EXPECT CROSS-BORDER PAYMENTS TO BE INSTANTANEOUS, FRICTIONLESS AND THEY WANT A SEAMLESS DIGITAL JOURNEY FOR ALL THE PARTIES INVOLVED – Anand Sampath, Head of GTB Payments & Receivables & Client Implementation, First Abu Dhabi Bank

The shift to digitisation is inevitable and wealth management experts expect it to radically transform the sector in the coming decade. Wealth management is typically seen as embodying old-fashioned values and providing discrete, tailored service, attributes that remain valuable parts of the business, but McKinsey said for many clients, these qualities are “no longer sufficient”. The discussion around the innovations in the wealth management industry was moderated by Arjun Singh, Head of Financial Services, MENA, Arthur D. Little and it had the participation of Anand Krishnan, Director, Head of Technology, Emirates Investment Bank; Anthony Habis, Managing Director, Head of the Middle East & Africa, BNY Mellon; Dinesh Sharma, Managing Director & Head of Personal Banking & Wealth Management,

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Middle East, Citi; Ayesha Abbas, Managing Director and Head of Affluent Priority & Premium Banking, Standard Chartered UAE; Daniel Robinson, Head of Wealth & Personal Banking, HSBC and Damian Grice, Chief Operating Officer, Greenstone Equity Partners. Singh opened the panel by asking Robinson about the key trends that are being seen in wealth management across the Middle East. Robinson said that there’s a softening of inflation in the region relative to other markets and, “we feel relatively confident on a global basis that the region has a lot of opportunities to offer.” “Environmental, Social and Governance (ESG) is also a massive trend in the region, not because corporates want to talk about it, but the growth in client’s interest is huge,” he added. Robinson also said that the structural reforms, not just in the UAE but in many markets, are enabling more and more high-net-worth individuals (HNWIs) and affluent clients to choose where they can invest. Other speakers on the panel identified a generational shift in wealth, a fast-evolving regulatory landscape and unprecedented digital transmission as trends that are shaping wealth management in the Middle East. A coherent digital transformation plan will give firms a head-start in leveraging stronger client relationships, reduced operating costs and enhanced risk management as well as regulatory compliance capabilities. When it comes to the impact of technology on premium, Abbas said regardless of how a bank packages it, whether it’s in the

form of a digital channel or in-person, consumers want trust, especially in wealth management. “Regardless of how the models shape up. What all wealth managers are doing, and they continue to do is to ensure that they are there for the client in the shape and in the form that the consumer prefers,” Abbas said. The growth of “automated wealth managers” or Robo-advisors is also revolutionising wealth management with unprecedented force. Asked how Roboadvisory is playing out in the Middle East and whether regional wealth players would acquire local Robo players or build their own, Robinson said that Roboadvisory is here to stay and globally there are as much as $2 trillion assets under management with the support Roboadvisory services. Robinson said that Robo-advisory builds up the speeds that HNWIs clients require, adding that HSBC has it live at the bank’s primary markets in the UK and Hong Kong. “There’s a demand for the complex investment and environment to come through on Robo-advisory. The demand is there, but I think it comes down to the market, the regulatory reform to enable the speed of adoption,” he added. Krishnan weighed in on the Roboadvisory discussion saying though automated wealth management has been around for some time, it’s a constantly evolving area and does not need a onesize-fits-all approach. “There is an appetite for more complex products specifically from the ultra-high net worth segments. And therefore, wealth managers have to tie in Robo-advisory with several other value-added services such as portfolio rebalancing,” said Krishnan. To maintain a competitive edge in a crowded market, Abbas said that banks and financial services providers are now partners with the clients throughout their financial journey across generations. She said in the UAE, banks that have a global footprint such as HSBC and Standard Chartered are “bringing to the table connectivity”. This means connecting

families and the generations not just for wealth management but even for their transactional requirements. “If a client lives in the UAE and wants to buy a property in London and requires placing their wealth management, more sophisticated estate planning services through Singapore, banks like Standard Chartered will connect the customers and provide the services,” Abbas said. Sharma concurred with Abbas that connectivity is vital but highlighted that the

REGARDLESS OF HOW THE MODELS SHAPE UP. WHAT ALL WEALTH MANAGERS ARE DOING, AND THEY CONTINUE TO DO IS TO ENSURE THAT THEY ARE THERE FOR THE CLIENT IN THE SHAPE AND IN THE FORM THAT THE CONSUMER PREFERS – Ayesha Abbas, Managing Director and Head of Affluent Priority & Premium Banking, Standard Chartered UAE

challenge with connectivity is stemming from Relationship Managers (RMs). He said that they tried connectivity from 2010 to 2016 by introducing clients to booking center in Jersey, London and Singapore. However, it never worked because RMs at these centers thought of customers as suitcase bankers and were hesitant to pass them to RMs in other financial hubs. From a technology-first approach, Grice said that Robo-advisors are “sustainable and they’re here to stay.” He noted that the next generation of wealth owners constitute affluent clients who are comfortable with technology in every single facet of their daily life, adding, “They use it, they want it, they need it and they demand it.” Reflecting on Sharma’s point about multiple booking centers, Habis said that BNY Mellon’s Pershing platform is the world’s largest enabler of wealth management firms offering more than $3 trillion. The platform provides trading and settlement services, investment solutions, bank and brokerage custody, middle and back-office support, data insights and business consulting. Following the Digitisation of Wealth Management panel, Peter Tanny D’souza, Regional Sales Manager, Thales Cloud Security gave a presentation titled Data Security for a Zero Trust World. The global financial services sector has undergone a profound digital transformation over the past two years and D’souza highlighted how institutions mea-finance.com

MEA FINANCE BANKING TECHNOLOGY SUMMIT 2022

can mitigate cyber-attacks through zero-trust capabilities to alleviate risks such as ransomware attacks from decentralised data.

Financial technology enablers Over the last two years, several C-suite executives in the Middle East have come to believe that digital transformation is more of an enabler; a vehicle that allows institutions to get the desired value from their transformation agenda. Traditionally, the financial services sector has a rather conventional outlook and takes time to adapt to change and innovation, but the pandemic has created a different narrative. COVID-19 has accelerated a perceptible shift in the financial services sector by necessitating a quick transition from physical to digital. The Competitors, Vendors and Partners, The Blurring Line panel was moderated by Angela Halawi, Strategic Account Lead, Financial Services, Microsoft and it had the participation of Devid Jegerson, Head of Customer Experience & Platform Development, National Bank of Fujairah; Ahmed Al Naqbi, Chief Executive Officer, Emirates Development Bank; George Hojeige, Chief Executive Officer, Virtuzone; Sriranga Sampathkumar, VP & General Manager, the Middle East & Africa, Infosys; Anirudha Panse, MD & Head of Trade Finance Product Innovation, First Abu Dhabi Bank (FAB) and Balaji Viswanathan, MD & CEO, Expleo Solutions Ltd. Halawi said in her opening remarks t h a t ove r t h e l a st d e c a d e, t h e banking landscape has become more competitive and more fragmented, thanks to all the changing operating environments and disruption to the market from fintechs as well as other emerging technologies. Several financial institutions in the region have been taking very aggressive action in the ecosystem, some are partnering, some are competing and some are on standby waiting to see what will happen next, she added.

Asked about Emirates Development Bank’s (EDB) funding strategy across several industries, Al Naqbi said as a development bank in a unique position, EDB opens bank accounts for SMEs and startups within 48 hours whether onshore or offshore—the first partnership. The bank completed the second stage of its partnership in May, an initiative that will see the development bank offering automated lending. The bank plans to lend up to $1.4 million (AED 5 million) to any SME in the UAE within five business days. From a consultancy and digital services perspective, Infosys’ Sampathkumar said we are in an age of “very disruptive technology whether it is from a customer’s point of view or a vendor.” “The blurring line quoted here applies to both parties,” he said. Hence today, both fintechs and banks are considering collaborations to find an optimum solution that can fit the model being required by customers. Meanwhile, traditional banks are also contemplating co-inventing with other financial institutions to offer intuitive, agile and efficient products and services to the market. Sampathkumar called on banking fraternities to come together and offer financial solutions that meet customers’ requirements and expectations while helping to bring more streamlined products through disruptive technologies.

Banking and Finance news in the MEA market

The field of trade finance is a complex as well as a diverse ecosystem and there have been several partnerships between incumbent banks and fintechs in this space. First Abu Dhabi Bank’s Panse said that collaborations with fintechs are aimed at solving real financial problems. “The real problem could be an internal problem for the bank, or it could be solving an external problem for clients,” he said. Trade finance is traditionally known as a paper-based business that is time-consuming in terms of looking for the correct documentation and making sure that they are in line with regulatory requirements. However, Panse said that fintechs are coming in to support the field, first by digitising the documents. By leveraging AI, ML and natural language processing, fintechs are giving banks a “well-thought-through output” and the facility can also be extended to clients. Partnerships between traditional banks and fintechs are solving ‘two problems’ in one go; digitising the document and digitising trade, giving customers faster turnaround. The UAE Trade Connect platform is a consortium of eight banks in partnership with telecoms major e&, formerly Etisalat Group, that joined forces to create a blockchain-based solution where members anonymously exchange information and conduct

money laundering related checks to give an institution the confidence to make advances to the trade on the table. On customer experience and personalisation, Jegerson said that he had the opportunity to apply AI ‘deeply ’twice, first to create an algorithm as part of ML for fraud management in an e-commerce payment gateway and second in PayPal. “PayPal create one of the first algorithms for anti-money laundering. Applying the image recognition simply represents the transfer of the funds between the peers in PayPal through an image,” he said. However, Jegerson noted that AI is a misleading concept. AI as a concept is a computer system that is applied when a human does not know, the rules at the beginning. Hence, there’s misleading information and chatbots is not AI and robots that we have in our houses are not AI, he added. On the SMEs and startups front, Hojeige said Virtuzone onboard between 500 and 600 companies a month, which is good for Dubai and the country. Given that starting a new business is a daunting task, Virtuzone offers would-be investors advice on what could be their best options, especially in the UAE where there are 52 jurisdictions. The company also supports entrepreneurs by creating pricing plans, getting a business license, visas as well as opening business bank accounts and registering for the tax. “The agility of the UAE Government’s decision-making is what differentiates it from the rest of the world. We have seen a lot of the policies when it comes to attracting foreign businesses here that have done great strides,” said Hojeige. B a n ks a n d f i nte c h a re fa c i n g mounting challenges from new entrants in the market as well as customers’ need for a seamless experience. Viswanathan said that Expleo Solutions’ approach or engagement is primarily to deliver quality and automation first while ensuring the reduction of the time to market—both for product owners banks and fintechs alike. “The way we look at it is that what’s best for the customer that is the end

customer, what’s best for the market and what is best for investment,” said Viswanathan. Banks and fintechs are competing in some areas but there are also fields they are collaborating. Meanwhile, new entrants in the crossborder trade finance ecosystem are addressing opportunities for banks. Panse said cross-border trade finance is overly complex and consists of two parts, first is traditional trade which happens mostly as people would know on the back of letters of credit, guarantees, etc., and the second part is where it happens mostly on an open account basis.

Executive Financial Services, Accenture, the Assessing existing cross-border payment infrastructures discussed how blockchain-based technologies is revamping the traditional crossborder payment landscape that was once marred with high costs, thirdparty intermediaries and a long chain of data verification. The panel had the participation of Anand Sampath, Head of GTB Payments & Receivables & Client Implementation, First Abu Dhabi Bank; Mohammed Wassim Khayata, Founder & CEO, Al Maryah Community Bank; Mohit Gupta, Director, Product Management, Middle East & North Africa, Mastercard

CONTRARY TO COMMON BELIEF THAT OPEN FINANCE OR OPEN BANKING IS ONLY MEANT FOR THE END CONSUMER. THE REALITY IS IF APPLIED PROPERLY EVEN THE FINANCIAL INSTITUTIONS THEMSELVES CAN BENEFIT FROM IT – Ali Imran, Head of Digital Services & Transaction Banking, Commercial Bank of Dubai

In the traditional trades space, there have been fintechs’ who have been trying to produce solutions in digitalising the end-to-end trade. Panse noted that the biggest challenge has been getting the parties onto this ecosystem, hence that is why there has been not as much success in the space.

Payments Globally, payments remain among the best-performing financial services product segments and the sector is evolving faster than any other area of financial services driven by changes in digital technology, consumer demand and competitive forces.

Cross-border payments

Moderated by Naim Alame, Senior

as well as Olivier Crespin, CEO, Zand; Domenico Scaffidi, Vice President, Global Industry & Regulatory Affairs, Volante and Naushad Contractor, CEO, Fable Fintech. Asked about the opportunities within the cross-border payments as well as the challenges that banks are facing, FAB’s Sampath said that with the recent technology trends following the outbreak of the pandemic and other industry developments, expectations have changed significantly. “By default, customers expect cross-border payments to be instantaneous, frictionless and they want a seamless digital journey for all the parties involved,” he said. Sampath highlighted that crossborder payments are fraught with several issues such as message formats, mea-finance.com

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different compliance requirements based on jurisdictions as well as funding costs and a smaller window due to the nature of the job. However, SWIFT gpi started with resolving some of these issues (speed and transparency) while the continued advancements in financial technologies are also expected to promote frictionless and smooth crossborder payment. Khayata put cross-border payments into three categories including business to business, business to consumer and consumer to consumers. He said the most significant challenge facing the sector is the ability to issue a stable coin such as a Dirham-based stable coin. As you know, the UAE today is one of the most advanced countries in enacting regulations. Khayata called for regulation of tokenized assets to ensure that “any amount of money transferred is equivalent to the amount of money received at the other end.” Zand’s Crespin said that there are six points to consider when choosing a payments architecture including getting a platform or partners that can be plug and play without creating any dependency on a co-banking system, as well as having a smart architecture where you give the facility to clients to choose based on the timing and the cost “Cross-border payments are in a renaissance moment right now. We are w it n es si ng a n uni ma gi na b l e pace of development and innovative change in the cross-border payment space,” Gupta weighed in adding that Mastercard’s cross-border services is a seamless solution that allows financial institutions, telecom companies and fintechs to connect across 140 different countries and make payouts in over 60 currencies. Comparing the Middle East and other regions, Volante’s Scaffidi said that there is a lack of interoperability in the payments ecosystem even though there is one single standard for example European Payment Council rulebook on one hand and ISO 20022 on the other. Scaffidi expects

the adoption of ISO 20022, a globally developed methodology for transmitting data that provides a consistent messaging standard for payments, to bolster the acceleration of cross-border, crosscurrency instant and business-to-business payments in the future. Elaborating on Fable’s faster, interoperable and transparent payments business model, Naushad said that at the core of the fintech firm’s approach to clients are four main questions: Do you want to be in control? Are you flexible enough to use options based on important decisions, client requirements and your own architecture? Are you able to optimally and intelligently (make) transactions based on multiple parameters: and are you regulatory compliant?

Evolving payments sector

The Facing the challenges of the changing payments landscape in the Middle East & Africa panel was moderated by Shafique Ahmed, Digital Transformation & Payment Leader at Walvat. He was joined on the stage by Vincent Kilcoyne, EVP, Head of Product Management, SmartStream; Kartik Taneja, EVP, Head of Payments & Consumer Lending | Chairman, Neopay, Mashreq; Cem Soydemir, Senior Payments Expert | GTM - MENAT, SWIFT as well as Kazim Kirmani, Managing

Director & Head of Products and Data, Magnati; Balaji Muthu, Executive Director, Mindgate and Mohit Aery, Regional Director, Payment Gateway Services EEMEA, Mastercard. On what drives progress in the payment space for retail and corporate banks, Aery said that following the outbreak of the coronavirus, governments, organisations and financial institutions quickly digitalised their services and products creating a virtual experience for the customers. On the other end, consumers were also adopting new ways of shopping which accelerated the growth in contactless and digital payments. “Both consumers and the institutions are two key verticals of what we call a co-party model in the payments world, and both drive each other,” Aery said. SWIFT’s Soydemir concurred with Airy saying that customers’ expectations grow from the initiatives or innovations that are being driven by the financial institutions. However, on the other end innovations in other sectors are being driven by what customers expect from financial institutions. Kilcoyne weighed in saying technology is “a multi-participant model”. He posed a couple of questions: What is the expectation of the customer? What is the expectation of the regulator? Kilcoyne said in most payments discussions, mea-finance.com

MEA FINANCE BANKING TECHNOLOGY SUMMIT 2022

the banking sphere driven by changing customer needs and regulatory initiatives such as regulatory sandboxes.

Retail banking

regulators are talking about retail payments vs corporate payments vs small value faster real-time payments, as well as interbank large money and in the process, “they’re constantly creating bifurcated thinking.” On whether traditional banks can introduce value-added services such as those being introduced by fintechs and technology giants, Kirmani said that from this perspective what’s important is that banks will not compete but continue providing core services; more of a partnership. With a partnership model, there are services that fintechs can offer better than financial institutions while on the other end fintechs are not able to offer services to clients without regulatory and compliance coverage that banks typically provide. “Whether it’s Apple Pay which launched the Apple card in 2019 there is a bank (Goldman Sachs) at the back end,” he said. N e o p a y ’s Ta n e j a s p o ke of a democratized model saying no one can do everything both fintech and banks alike. “On the one hand, what I see in terms of what fintechs are doing is nothing new. But on the other hand, I think everything about the new model and if you take it further down to DeFi and Web 3, absolutely new business model,” said Taneja. NeoPay, the payments unit of Dubai’s Mashreq Bank,

was carved out into a new standalone business in March 2022 and seeks to help businesses manage credit and debit card payments amid a pandemic-fueled e-commerce boom. Meanwhile, Muthu sees the payments ecosystem today being driven by convenience, “there is always debate in terms of the revenue versus the portfolio.” Customer data is key to financial institutions, and it is the manual that helps them meet customers’ preferences and expectations as well as explore new avenues of growth or new business models. Muthu said financial institutions may not get direct revenues from the proposition that they offer to customers, but by getting more data they can extend that convenience to the customer. The data obtained from customers can be used for some other revenue streams and banks can easily leverage this balancing mode because they have both consumer convenience demand and the data.

Digital transformation Banks in the Middle East were already at the forefront of innovation and digital transformation well before the pandemic hit. Industry experts who attended the MEA Finance Banking Technology Summit see this trend continuing to dominate

Banking and Finance news in the MEA market

The discussion on How Can Technology Help to Give Banks an Edge in Retail Banking was anchored by Neale Croutear-Foy, CTO-Digital Banking, Apex EDB. The panel had the participation of Amit Malhotra, General Manager, Personal Banking Group, Commercial Bank of Dubai; Saqib Khan, Regional Head, Middle East, Backbase; Sanjay Malhotra, Chief Consumer Banking Officer, Dubai Islamic Bank as well as Tarek Soubra, Chief Technology Officer, Al Maryah Community Bank; Marwan Abouzeid, Principal Solutions Consultant, Finastra and Imane El Majdoubi, Director, Financial Services Industry - UAE, Microsoft. Croutear-Foy opened the discussion by emphasizing that digital transformation is now the norm, and the key aspects are how banks are differentiating services, products and offerings from an efficiency perspective as well as how financial institutions work with the new ecosystem of vendors and partners. Touc hing on the fou n dat ion al principles, El Majdoubi said that through partnerships with different banks in the Middle East region, there are financial institutions that successfully managed to transform their core banking. These banks are managing to serve their customers in a personalised way while maintaining a competitive edge in the market. “Culture is particularly important. A financial institution can have the best strategy and a great vision, but unless its culture reflects the company’s value and the service that it aims to provide to end customers, it will not fly high,” El Majdoubi said. Al Maryah Community’s Soubra said from a digital bank perspective, trends that are providing more benefits to customers’ digital experience include the first contact between a bank and its customers, which is digital onboarding; the customer does not have to wait hours and days before an

account has been opened and increasing customer engagement by having an AI-based way to communicate and reach clients through any channel. Abouzeid weighed in saying in terms of shifting priorities, Finastra has the privilege of engaging with multiple clients including incumbent banks, digital banks and neobanks. “Over the past five or six years, there was a lot of focus on onestop-shop technology providers that can provide the breadth of functionality that a bank requires, but a fundamental shift has taken root over the last few years, where banks are now looking for a solution that gives them accessibility to the wider fintech ecosystem,” added Abouzeid. Meanwhile, Sanjay said a bank’s digital transformation journey is detailed by a “common definition and understanding” of what needs to be achieved. The definition comes from the top management and when Dubai Islamic Bank approached a digital or digitization phase, “the first thing was our definition of digital which is something which will enhance customer service, improve our turnaround times, is profitable and save operational costs” Khan said that from a banking software firm’s perspective, customers’ needs, and expectations are driving the change in the financial services sector while technology and companies such as Backbase are a vehicle that effect the change. C o m m e rc i a l B a n k of D u b a i ’s Malhotra said that it is a fact that financial institutions have taken the brick-and-mortar banks into customers’ smartphones. There are many use cases where banks have leveraged technology through partnerships with fintechs and technology providers allowing the sector to deliver the products and services that customers require. “The core reality is that the way the customers are consuming banking has changed and that is ever-changing. Today customers bank using their fingers, using just their voice and glancing at the screen of their smartphones,” said Malhotra. After the panel, Guhan Muthudamy, Co-Founder of Mindgate gave a

presentation titled Request to pay on real-time payments. Muthudamy highlighted how Real-time Payments (RTP) create a payments ecosystem where consumers, merchants and banks can make payments, settle bills and transfer money in seconds.

Emerging landscape

Moderated once more by Neale CroutearFoy, the discussion on the emerging landscape in banking technology had the participation of Mohammed Abdel Razek, Chief Tech & OPs Officer, Africa Middle East, Standard Chartered Bank; Shankar

WHETHER IT’S APPLE WHICH LAUNCHED THE APPLE CARD IN 2019 THERE IS A BANK (GOLDMAN SACHS) AT THE BACK END – Kazim Kirmani, Managing Director & Head of Products and Data, Magnati

Garg, Region Head of the Middle East and Africa, Xebia; Srinivasan Sampath, Acting Chief Technology Officer, First Abu Dhabi Bank as well as Mamoun Alhomssey, Chief Information Officer, Abu Dhabi Islamic Bank and Lakhwinder Singh, Pre-Sales Manager, META, Thales. Alhomssey, who opened, said that it is a privilege to be in this part of the region, and the UAE in this era of unprecedented digital transformation in the banking sector, thanks to several initiatives that are being introduced by the CBUAE as well as the federal government’s AI strategy. O n s e c u re p a y m e n t g a tewa y integration, Razek said that Standard Chartered operates in 25 markets across Africa and the payment structures are different and to address the challenge

the bank unveiled an API first strategy, Access Labs, which is the bank’s sandbox to co-create in partnership with clients and customers. With the adoption of open banking across the Middle East, legacy banks are slowly losing their tight control of customer data and total dominancy in the payments services sector. Sampath said that open banking has different maturity levels across different jurisdictions some driven by the customer requirements, some by the regulations and some by the market requirements. On cloud adoption in the region, Garg said the cloud is the future. He said on considering long-term success in cloud adoption, “there are two points that we need to consider.” “First the cloud adoption itself is not going to deliver the business value or the financial value and the second point, avoid the technology or option plate use, as we call them,” he said. Banks in the Middle East are increasingly recognising that the cloud is more than technology but is a destination for financial institutions to store data and applications and access advanced software applications. To best approach secured cloud uptake and build out a hybrid strategy for data security, Singh said when it comes to the cloud, Thales thought about how the company can implement security to make the banking sector the big customer while ensuring safe and secure cloud adoption. He said small customers that have fewer legacy applications and have already adopted the new generation DevOps move into the cloud easily but for most banks that have legacy applications, “it’s not easy to go to the cloud right away.” Leading bankers and technology professionals who attended MEA Finance banking technology summit agreed that the emergence of innovative technologies is offering banks a window to be more innovative and efficient in-service delivery while opening the door for new entrants such as fintechs, global retail giants and neobanks into the financial services sector. mea-finance.com

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Showcasing Ongoing Innovation

y warmest congratulations to all the winners of the MEA Finance Banking Technology Awards 2022, and sincere thanks to all you who actively supported and participated in this year’s awards and summit events. As we power on into a new normality, the results of the accelerated adoption of digitisation in finance has focused minds in both the banks and their technology suppliers. Now, more than equipping banks so that they continue to function in difficult circumstances or a changing world, the realm of banking technology has to face up to building on innovation with more innovation and with working in an increasingly competitive commercial environment. The MEA Finance Banking Technology Awards recognise the financial institutions, the technology vendors and the individuals who are leading services into a new phase of convenience, inclusivity and sustainability, and publicly acknowledges those that are standing tall in a crowded field of ideas, innovation and competition. The MEA Finance Banking Technology Awards, 2022 were, once again, a huge success and we are proud to have had the opportunity to recognize and showcase so many achievements in our market over the past year. Financial Institutions in the region readily embrace change and enthusiastically strive to stay ahead of the curve, keeping on par with, and occasionally edging in front of financial institutions around the world. They are ably partnered in this by innovative and dedicated technology companies that ensure that our banks are providing the best levels of service and agility. At MEA Finance Magazine, we will continue to award outstanding institutions and companies that lead the industry forward. Congratulations again on all your accomplishments; we are keen to see what you will bring the business in the coming year.

Nap Estampador Group Commercial Director, MEA Finance

mea-finance.com

BANKING TECHNOLOGY AWARDS 2022

The MEA Finance Banking Technology Awards 2022 announces the outstanding technological achievements in the region’s banking and financial industry

he winners of the MEA Finance Banking Technology Awards 2022 held at the Armani Hotel Burj Khalifa on May 19, 2022 were announced at a much welcomed in-person ceremony, honoring leaders and businesses within the banking, finance, and financial technology sectors in the Middle East and Africa, for excellence, achievement and leadership during the recent and challenging past. The awards programme, organized by MEA Finance Magazine, benchmarks

and promotes excellence and stand-out performance in banking and financial technology. It gives due recognition to institutions that have benefitted their clients and customers by innovating throughout challenging economic c o n d i t i o n s a n d t h e h e i g h te n e d competitive industry environment. Hundreds of entries were critically evaluated by a panel of judges comprised of industry experts and commentators. Forty-five category winners have been chosen after some in-depth evaluation of their research and knowledge of the

Banking and Finance news in the MEA market

market, consideration of the needs of their full range of clients and customers and an assessment of all relevant developments and achievements from the previous year. Kenneth Mitchen, Executive Director and Publisher of MEA Finance said, “Congratulations to all the winners at the MEA Finance Banking Technology Awards 2022. We honor the ‘champions’ of the banking and financial industry, celebrating the success and achievements of the institutions who are playing a key role in the region’s development.

The forty-five awards honouring the winners of the awards were presented in two halves, the first for technology vendors and the second half for banks and financial institutions. Here is the full list of the MEA Finance Banking Technology Awards 2022 winners: TECHNOLOGY PROVIDERS 1. Digital Banking Provider of the Year - Backbase 2. Islamic Digital Banking Provider of the Year - Azentio Software 3. Best Cybersecurit y Provider - Help AG 4. Best Core Banking Solutions Provider - Mambu 5. B est User Experience Solution Provider - BPC 6. Best Data Management Solution Provider - Thiqah 7. B est Risk Management Solution Provider - Loxon Solutions 8. Best Customer Experience Provider - QualityKiosk Technologies 9. Best Analytics Solution Provider UAE Trade Connect 10. M ost Innovative Cloud Services Provider - SmartStream Technologies 11. Most Innovative Mobile Banking App - Xebia 12. Best Reg Tech Solution Provider Codebase Technologies 13. Best Communications Platform Provider - Avaya 14. Best Open Banking & API Solutions Provider - Mindgate Solutions 15. Most Innovative Payment Solutions Provider - Volante Technologies 16. B est Wealth and Investment Technology Provider - additiv 17. M ost Innovative Digital Wallet Deployment - Magnati for Careem PAY 18. B est D i gi tal Transformati on Consultancy Firm - SR Intelligent Technologies (SRIT) 19. B est Islamic Fintech Systems Integration Provider - DDCAP Group 20. Best Cloud-Native Digital Banking Platform - Infosys Finacle

21. Best QA/QE Solution Provider of the Year - Expleo Solutions Limited 22. Payments Technology Executive of the Year - Houssam Chaker, Regional Head, Volante Technologies 23. Technology Executive of the Year - Haitham Kaddoura, CEO, SmartStream Technologies FINANCIAL INSTITUTIONS 1. Digital Banking Innovation of the Year - First Abu Dhabi Bank (FAB) 2. Best Digital Innovation in Islamic Banking of the Year - Dubai Islamic Bank (DIB) 3. Best Neobank - payit powered by FAB 4. B est Core Banking Technology Implementation - Banque Saudi Fransi 5. Best Mobile Banking Services HSBC 6. Best Innovation in User Experience - Mashreq 7. Best Innovation in Retail Banking Emirates NBD 8. B est Innovation in Corporate Banking and Finance - National Bank of Oman 9. Best Innovation in Investments Banking - Commercial Bank of Dubai (CBD) 10. Best Innovation in Trade Finance National Bank of Fujairah (NBF)

11. Most Innovative Trading Platform National Bank of Fujairah – NBFX 12. Best Islamic FinTech Solutions Implementation - rabbit by Dubai Islamic Bank 13. Best AI Technology Implementation - Al Ramz Corporation PJSC 14. Best Innovative Payment Solution Magnati 15. B e s t O p e n B a n k i n g & A P I Implementation - HSBC 16. B e s t B r a n c h D i g i t i s a t i o n Implementation - First Abu Dhabi Bank (FAB) 17. Best Corporate Payment Service Mastercard Payment Gateway Services 18. B e s t R i s k & C o m p l i a n c e Implementation - Greenstone Equity Partners 19. Best Retail Payment Implementation - Magnati 20. B est Tre a s u r y M a n a g e m e nt Implementation - Standard Chartered Bank 21. B anking Technology Leadership Award - Investment Management Bank - Eyad Kashkash, Executive Vice President and Group Head of IT, Al Ramz Corporation PJSC 22. Banking Technology Leadership Award - Personal Banking - Amit Malhotra, General Manager PBG, Commercial Bank of Dubai mea-finance.com

MEA FINANCE BANKING TECHNOLOGY AWARDS 2022

Digital Banking Innovation of The Year First Abu Dhabi Bank

First Abu Dhabi Bank (FAB) was the recipient of the Digital Banking Innovation of The Year award in the Middle East. The Digital Banking Innovation of The Year award recognized the UAE’s biggest bank by assets as the leader in the sector for building and implementing a banking solution that automates the direct debit process. FAB’s Electronic Direct Debit (eDDS) initiative encourages merchants to move away from physical instruments such as cash and cheques while enhancing corporates’ turnaround time to collect dues from their debtors. Though incumbent banks are not viewed as disruptors, FAB’s eDDS is an automated process for billers to collect payments from customers by debiting their bank accounts based on the pre-agreed authorization setup. The banking innovation eliminates the current paper-based manual process for FAB accounts and provides a portal that allows both billers and payers to register mandates online without requiring DD300 forms. It also provides full visibility and control over their mandates and collections.

Best Digital Innovation in Islamic Banking of the Year Dubai Islamic Bank

Dubai Islamic Bank (DIB) walked away with the Best Digital Innovation in Islamic Banking of the Year. The Shariah-compliant bank was conferred with the award in recognition of rabbit, an exciting and unique digital banking experience that is revolutionizing the connected generation. rabbit is poised to be one of UAE’s most contemporary digital brands and is on track to establish new standards for innovation in the financial services sector as part of DIB’s broader strategy to make banking effortless and fun for its customers. The digitally native brand that was unveiled last December is aimed at and tailored towards the millennials and DIB aims to take the banking platform to all the markets that the bank currently operates in with similar youthful populations. rabbit is available to download from both Apple and Android mobile app stores and initially, it launched with a current account, globally accepted debit card as well as payments and transfers.

Best NeoBank payit

First Abu Dhabi Bank’s payit was honored with the Best NeoBank award in recognition of the financial institution’s online-exclusive bank that is efficient and offers a wide range of digital and mobile-first financial solutions including investments, payments as well as money transfers and lending. payit, the UAE’s first fully-featured digital wallet has grown exponentially since it was launched in February 2018 to meet and ease the evolution of the country into a cashless society. Though neobanks are now a regular feature on the region’s banking landscape, payit has maintained its leading position among the Middle East banks that are leading us into the new era of banking. payit offers a wide range of innovative solutions to users including utility bill payments, the ability to split bills with friends, money transfers and shopping. It is catering to the increasing adoption of contactless and cashless payments which was accelerated by the outbreak of the pandemic.

Banking and Finance news in the MEA market

Best Core Banking Technology Implementation Banque Saudi Fransi

In the banking technology implementation category, Banque Saudi Fransi was conferred with the Best Core Banking Technology Implementation award in the Middle East region. The Saudi lender embarked on a five-year strategy in 2018 to rollout the largest core banking transformation in the region to bolster scale and enhance customer experience. Despite challenges from multiple fronts, Banque Saudi Fransi successfully rolled-out its digital transformation on time and the implementation far exceeded other core banking transformation programs undertaken in the Middle East in recent years, covering over 150 applications and all segments from retail to corporate clients. The new core banking system enables the bank to accelerate time-to-market, enhance customer insights, automate currently manual activities and improve the resilience and stability of its systems.

Best Mobile Banking Service HSBC

The Best Mobile Banking Service award was given to HSBC in recognition of the bank’s strategic ambitions to put a “bank in your pocket”, which ties in neatly with its digital strategy themes: Access, Engagement, Sales and Experience. The ‘Bank in your Pocket’ proposition seeks to enable customers to better manage their finances on smartphones whenever and wherever they want. Though HSBC is globally recognised and one of the main international banks in the MENA region, the bank is continually innovating to enable customers to leverage industry developments. Since April 2021, HSBC ‘Bank in your Pocket’ has seen a 26% increase in the number of customers that are actively using the mobile application. The mobile banking service’s areas of focus include international, foreign currency and payments, wealth, card servicing, conversational banking and customer acquisition. HSBC is adding new features to the ‘Bank in your Pocket’ strategy including Buy Now, Pay Later and Global Money Account and Global Money Transfers.

Best Innovation in User Experience Mashreq Bank

Mashreq Bank was honoured with the Best Innovation in User Experience award for its digital journey for the secondary account opening initiative. The bank deployed a new feature for its existing bank customers in April 2021. The five click, 45 seconds and zero user data entry process for creating an additional account with Mashreq has seen a 48% increase in additional accounts in 2022 to 46,190 compared to 31,219 a year earlier. The initiative allows customers frictionless access to Mashreq’s full range of savings products while empowering them to manage their funds more effectively and across products they choose/prefer. The savings accounts available digitally for Mashreq’s existing customers include Money Multiplier Account, Dream Saver, Max Saver, Daily Bonus Account, Easy Saver, Easy Saver plus & Foreign Currency Accounts.

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Best Innovation in Retail Banking Emirates NBD

Emirates NBD was the recipient of the Best Innovation in Retail Banking award in honor of the major digital transformation journey that the bank embarked on, which zeroed in on two key retail banking customer journeys in 2021 with the rest planned in 2022. Account onboarding Customer digital onboarding is the first contact that a new user has with the bank and the process should be intuitive, seamless responsive and efficient. Emirates NBD enabled instant account opening for salaried customers through its Tablet banking, which saw accounts for 65% of the customers being opened instantly making Dubai’s biggest bank by assets the first to offer such service in the Middle East. For Emirati customers, the bank’s high priority segment, the further enhancement of the process enabled instant account opening for all the customers resulting in a 100% increase in the number of customers being onboarded every month.

The instant onboarding experience creates customer delight at the outset of the relationship with the bank and shapes the first impressions by delivering the product hassle-free in the least turnaround time (TAT) possible. However, to manage and mitigate the compliance risks without compromising on the user experience, Emirates NBD implemented a new system for customer screening using intelligent rule engines. Digital payments Payments are the most frequent touchpoint between a bank and its customers. For payments, Emirates NBD registered a 12% improvement in straight-through processing (STP) rates from 83% to 93%. An STP payments experience is critical as it is a highfrequency interaction and sensitive given the movement of funds. Similar to account onboarding, it was critical for Emirates NBD to manage and mitigate the compliance risks without compromising the user experience.

The bank said that the biggest lever for improving STP rates as reducing false positives and improving automation rates for transaction screening. However, this remained a challenge due to the high number of false positives due to common regional names and increasing regulatory requirements. Emirates NDB implemented several key solutions to halve compliance hit rates from 16% to 8% including cleaning up internal databases to remove records with very limited data or enrich records with additional data. The bank also implemented a new analytics decision model to automate the decisioning of false alerts in a bid to manage and mitigate the compliance risks. The use of a combination of an Artificial Intelligence (AI) model and Robotic Process Automation enabled the bank to replace manual decisioning for alerts generated on customer or beneficiary name and address. Emirates NBD said the solution can close 40% of the alerts it handles, with very high accuracy rates.

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MEA FINANCE BANKING TECHNOLOGY AWARDS 2022

Best Innovation in Corporate Banking and Finance The National Bank of Oman

The National Bank of Oman (NBO) received the Best Innovation in Corporate Banking and Finance award in the region, in recognition of the bank’s technologydriven corporate banking platform that offers more cost-effective ways to manage company finances such as bulk salary processing and online trade. The bank’s cutting-edge technology and leading security features empower corporates and government-owned entities to make instant transactions, payments and transfers as well as access account balances, make on-thespot inquiries and view complete transaction histories on all of their accounts. NBO took several steps to strengthen the platform last year to improve customer experience by enhancing the utility bill payment functionality and a dedicated tab for customers to download the “VAT Invoice Report” directly from the platform. Last year, the bank registered a 25% increase in the number of customers onboarded to the platform, which contributed to a massive increase of over 270% in overall digital transactions reported by the bank.

Best Innovation in Investments Banking Commercial Bank of Dubai

Commercial Bank of Dubai (CBD) was honored with the Best Innovation in Investments Banking award in the Middle East region. Digital transformation remains a strategic priority for CBD, underpinned by the lender’s vision to be “default digital” and exemplified by the launch of the “CBD Investr app”—making the bank the first in the Gulf region to offer a Robo-advisory. The innovative investment app, which was developed in partnership with a Belgian wealthtech firm, is powered by smart algorithms that actively manage investment portfolios to deliver optimal risk-adjustedperformance. CBD Investr offers customers convenient access to globally diversified and personalized portfolios of stocks, bonds and other asset classes using low-cost exchange-traded funds (ETFs). The mobile app allows customers to start investing with just $500 and withdraw at any time without any charges and does not require a CBD bank account to fund their portfolios. CBD Investr users can make a local transfer from any bank account in the UAE.

Best Innovation in Trade Finance National Bank of Fujairah

National Bank of Fujairah (NBF) was the recipient of the Best Innovation in Trade Finance award, which was conferred to the bank in acknowledgment of the strides that it has made in expanding its digital offerings. NBF’s digital offerings have undergone a significant overhaul amid a wave of digitalisation in the Middle East financial services sector to boost security and advance the customer experience. NBF’s Corporate Access Online Banking takes a key place in the provision of the UAE-based lender’s services and its Connect Platform, which was created with SMEs in mind, and is accelerating the bank into the digital world while contributing to their trading capabilities. The bank’s trade finance portfolio contributes 40% of its revenue, making the correct solutions for its clients of core importance.

Banking and Finance news in the MEA market

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MEA FINANCE BANKING TECHNOLOGY AWARDS 2022

Most Innovative Trading Platform National Bank of Fujairah

In recognition of its pioneering leadership in digital banking, with its stateof-the-art technology and superior market intelligence, the National Bank of Fujairah received the Most Innovative Trading Platform award. The bank’s NBFX platform combines the latest technology with in-depth market experience, ensuring that customers can customize it according to their preferences, have access to the most competitive price execution and tap into valuable data and insights to help guide decisions. The platform offers customers a bespoke digital experience to hedge their treasury requirements and is available for both conventional and Shariah-compliant banking customers. NBFX is available 24/5 and allows customers to execute complex FX NDFs (Non-Deliverable Forwards) and Time Options, alongside the more traditional FX Spot, Swaps and Forwards. To complement its digital milestone, NBF launched its digital corporate dashboard that allows customers to view their cash flow position across a spectrum of business-related payments to facilitate higher efficiency in cash management and informed decision making.

Best Islamic Fintech Solutions Implementation Dubai Islamic Bank

rabbit, which is powered by Dubai Islamic Bank (DIB), was honored with the Best Islamic Fintech Solutions Implementation award. The award was given to rabbit in recognition of how the Shariah-compliant digital offering is modernizing banking by tapping into the technology-savvy millennial market while helping the unbanked to get access to the formal financial system. The launch of rabbit last December gave birth to a new word in the language, “funtech” which typifies DIB’s philosophy and goal to take the banking platform to different markets with younger demographics and populations. The new brand, which currently caters to retail customers only, will offer services for small and medium-sized enterprises as it “evolves” in the future. With rabbit, DIB aims to fill an existing void prevalent in the UAE by creating a financial brand that is engaging and connects directly with the customer, removing the jargon and complexities typically seen.

Best AI Technology Implementation Al Ramz Corporation

The Best AI Technology Implementation award was given to Al Ramz Corporation in recognition of Fahad the Robot. Fahad was developed to fulfill the requirement of providing a minimum commitment to the various UAE stock exchange markets. The robot is designed to mimic financial traders at the Market Making desk to alleviate the responsibility of fulfilling the minimum commitment while allowing them to focus on getting creative with their tasks at hand. Fahad’s success arises from the robot’s solution that solves some of the prime limitations present in organizations while maximizing the generation of profits, at almost no cost and with no additional resources. The AI solution was developed by Al Ramz to avoid the additional expenditure on resources and ensure optimal performance. The robotics solution is responsible for placing more than 88% of the market-making desk’s total number of daily placed orders to Abu Dhabi Stock Exchange, Dubai Financial Market and Nasdaq Dubai.

Banking and Finance news in the MEA market

Best Innovative Payment Solution Magnati

Magnati was the recipient of the Best Innovative Payment Solution award in the Middle East. The payments solution provider is based on a “Payment as a Platform” model and provides merchant acquiring, consumer payment solutions and government payment solutions, issuer processing and acquiring processing services through single API integration. The company offers the latest in payment processing technology to enable merchants to provide invisible, seamless and secure payment experiences. Magnati’s 2021 acquiring revenue soared by 31% and to date, the company has served nearly 30,000 merchants, processing close to $23 billion in transaction value. Magnati is a partnership platform offering API-enabled services such as “Super Surprises”—a data monetisation tool built on AI and machine learning that generates customised offers for every unique card that interacts with the firm’s payment ecosystem. First Abu Dhabi Bank carved out Magnati into a stand-alone operational entity in April 2021.

Best Open Banking & API Implementation HSBC

HSBC was honoured with the Best Open Banking & API Implementation award in recognition of how the global lender’s transaction bank continues to play a pivotal role as regional economies emerge from the pandemic. HSBC’s API Developer Portal was launched in 2021 and helps customers easily find the right APIs for their business needs, enabling more timely, realtime decisions for matters such as account balances, payment initiation, status inquiries and SWIFT pre-validation. The bank’s APIs remove barriers to integration between businesses and enable faster scaling, reducing the risk of fraud while boosting overall corporate governance. In providing customers and developers with direct access to a suite of tools with which they can integrate the bank’s API solutions into their products, HSBC is embedding its insights into customers’ businesses to make them more resilient and less dependent on the limitations of their technologies.

Best Branch Digitalisation Implementation First Abu Dhabi Bank

The Best Branch Digitalisation Implementation award was given to First Abu Dhabi Bank (FAB). FAB managed to solve the difficulties of in-branch payment of cash and cheques to merchants that require specific recorded details of the transaction with a convenient digitised method for depositing cash or cheques into their corporate customers’ accounts, with enhanced narration which helps in accounts reconciliation. The solution, FABePay, allows payers to create single or multiple cash and cheque deposits by accessing an online portal for various billers or merchants with detailed deposit information using a computer or a mobile device. The portal provides several benefits to both the payers and the billers. FAB is working closely with some neobanks to support them with their collection process using our FABePay capabilities. Beyond FABePay, the bank introduced the Electronic Invoice presentment and payment (EIPP) feature through which billers or merchants can present their invoices to payers electronically. mea-finance.com

MEA FINANCE BANKING TECHNOLOGY AWARDS 2022

Best Corporate Payment Service

Mastercard Payment Gateway Mastercard Payment Gateway Services walked away with the Best Best Corporate Payment Service award. The global payments major was conferred with the award in recognition of its advanced gateway technology that securely captures and transfers payment data from the merchant’s checkout to the acquiring bank and then transfers the acceptance or decline back to the consumer. With a global footprint that includes over 190 acquirer connections, more than 500,000 merchant profiles and more than 20 years of payments expertise, Mastercard is helping its acquiring partners and their merchants in the region by offering a White Label gateway platform and a single connection to a growing selection of the latest payment products and innovations. Merchants benefit from Mastercard’s growing range of value-added services including Tokenisation, EMV 3DS, Tap On Phone, Buy Now Pay Later, Instalments and access to several global payment methods, fraud management tools and flexible integration options.

Best Risk & Compliance Implementation Greenstone Equity Partners

Greenstone Equity Partners was honored with the Best Risk & Compliance Implementation award in the Middle East region. The award was conferred to Greenstone Equity Partners in recognition of the firm’s risk and compliance platform that provides regulatory compliance solutions to international fund managers who hold over $700 billion in assets under management. Dubai-based Greenstone Equity Partners strengthened its regulatory compliance proposition in 2022 by creating a strategic partnership with a leading global firm to provide access to a Compliance as a Service tool with access to the latest private capital regulations across all GCC markets, allowing users to remain up to date with the regulatory landscape and simultaneously raise capital compliantly. Founded in 2011, the private equity firm bridges the needs of local institutional investors and family offices who wish to gain access to global private investment opportunities. Its regulatory compliance solution can be offered standalone or in parallel to their traditional capital raising products.

Best Retail Payment Implementation Magnati

In recognition of its pioneering Payment as a Platform that broadened the financial services offered by Careem while allowing the ride-hailing giant’s customers to make P2P transfers, Magnati received the Best Retail Payment Implementation award. The platform is a future-proofed service with tools that make it easier for merchants to run and grow their businesses. It can converge card payments, new payment methods including domestic and international digital wallets, loyalty programs, QR solutions as well as value-added services such as buy-now-pay-later and easy-instalment plans, onto a single service layer. Founded in 2021, Magnati’s Payment as a Platform allows merchants access to multiple tech solutions and payment acceptance methods through a single API integration, which makes it customisable to merchant needs. It also enables fintechs to easily integrate and work with Magnati seamlessly.

Banking and Finance news in the MEA market

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MEA FINANCE BANKING TECHNOLOGY AWARDS 2022

Best Treasury Management Implementation Standard Chartered Bank

Standard Chartered Bank was the recipient of the Best Treasury Management Implementation award in the Middle East. The role of the treasurer has become central to the financial fitness of businesses over recent years and Standard Chartered strategy is to be the leading digital bank across the many markets they operate in. Technological innovations such as APIs and robotics, combined with a detailed understanding of its customers’ businesses have enabled Standard Chartered to work closely with clients to design innovative solutions that equip treasurers for a more realtime world. The bank developed a solution that provides instant payment and debit status notifications via API to the treasury management systems or accounts receivable systems. Leveraging its international footprint, Standard Chartered offers clients access to an unparalleled range of emerging market and G10 currencies through traditional voice and electronic channels.

Banking Technology Leadership Award – Investment Management Bank

Eyad Kashkash, the Executive Vice President and Group Head of IT at Al Ramz Corporation

Eyad Kashkash, the Executive Vice President and Group Head of IT at Al Ramz Corporation was the recipient of the Banking Technology Leadership Award – Investment Management Bank in the Middle East region. Eyad is leading Al Ramz’s technology deployments while helping the business develop and implement technology-enabled strategies. He has almost 20 years of experience at top-tier financial services companies in the US and the UAE. Exemplified by the adoption of Robotic Process Automation Technology which markedly increased productivity, Eyad led his team effectively building a culture of automation and digitization while ensuring that the goals achieved aligned with the company’s vision, thus bringing drastic performance improvements. Eyad is a holder of an MBA from the University of Bedfordshire, a Bachelor’s Degree in Software Engineering from Philadelphia University as well as several professional certifications in the field of IT and Project Management. He is the brains behind Al Ramz’s digital transformation initiatives and his approach determines the future innovations across the group.

Banking Technology Leadership Award – Personal Banking Amit Malhotra,

General Manager, Personal Banking at Commercial Bank of Dubai

Amit Malhotra, General Manager, Personal Banking at Commercial Bank of Dubai (CBD) was the recipient of the Banking Technology Leadership Award – Personal Banking in the Middle East. With almost three decades of career and leadership experience and an unrivaled depth of knowledge in the financial services sector, Amit is responsible for leading and transforming the retail bank division on its journey towards digitization and customer centricity. Prior to joining CBD, he was Senior Managing Director and Group Retail Banking Head at Al Hilal Bank and he also held senior retail and credit roles in Standard Chartered Bank in Singapore, Vietnam and India as well as similar roles at Citibank in Thailand and India. Amit is a holder of a BCom (Hons) from Delhi University and a Post Graduate Diploma in Business Management from the Institute of Management Technology, India. He was a founding member of www.makemytrip.com, India’s largest online travel company with market cap of over $1.2 billion.

Banking and Finance news in the MEA market

Digital Banking Provider of the Year Backbase

Backbase was the recipient of the Digital Banking Provider of the Year award and recognized as the leader in the sector for creating and implementing products and services that are not only unique, but meet the requirements of financial service institutions in the region. The company’s Engagement Banking Platform (EBP) is a clear evolution of the digital banking experience and used by large financials around the world, helping them to scale up operations and keep pace with change as well as competition. The platform enables any journey, from digital sales to everyday banking to deliver seamless, frictionless experiences for both your customers and employees. The digital-first banking company seeks to enhance banks and financial institutions’ digital transformation to allow them to deploy digital sales and banking experience across all segments, channels, and products through turnkey customer and employee apps

Best Cybersecurity Provider Help AG

Help AG was honored as the Best Cybersecurity Provider in the Middle East. The firm received the award in recognition for how the cybersecurity solutions provider is offering financial service providers an exemplary system of protection and adaptability amid the evolving nature of cyberthreats. Help AG launched a service-centric model in December 2021 that customers can avail ‘as a service’ based on state-of-the-art platforms and tools, highlighting them a pioneer in the Middle East’s cybersecurity sector. The cybersecurity solutions provider has always been on the forefront of innovation with their Security Service Edge, secure cloud enablement, OT security or the utilization of machine learning for dealing with cyber threats. Help AG joined forces with the Dubai Financial Services Authority in January 2020 to create a Cyber Threat Intelligence Platform—the region’s first financial regulator-led platform that facilitated the development of a community of information sharing for regulated and non-regulated companies operating in or from the DIFC.

Best Core Banking Solutions Provider Mambu

The Best Core Banking Solutions Provider award was given to Mambu in recognition for their market-leading integrated core banking system which comes with deployable components that covers all areas of corporate banking including corporate lending, trade finance, payments and cash and liquidity management, with the addition of analytics and compliance. The banking software firm offers more than 30,000 financial products, with several fintechs and financial institutions of all sizes successfully working with their Software as a Service (SaaS) cloud-banking platform. Mambu’s five-minute, 100% digital onboarding process and ten-minute credit decisioning is the Middle East region’s fastest, which is made possible through the company’s flexible, scalable and secure core banking solution. The company enables rapid deployment of banking and lending services while plug-in integrations allow for streamlined and automated customer journeys. Mambu’s customers only need to configure and integrate rather than tech-heavy coding and customisation.

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MEA FINANCE BANKING TECHNOLOGY AWARDS 2022

Islamic Digital Banking Provider of the Year

In the Sharia-compliant digital banking solution provider category, Singaporebased Azentio Software received the Islamic Digital Banking Provider of the Year Award. The company was given the award for successful iMAL core banking system implementation experiences at leading Islamic banks in the Middle East and Africa. Azentio offers a comprehensive range of software products – serving core operations to modern digital needs – for the financial services industry. The company’s deep domain knowledge and expertise extend across retail and corporate lending, Islamic financing, risk management and anti-money laundering, asset management and core insurance. In addition, Azentio serves mid-market enterprises across the Middle East, Africa, Asia Pacific and India with a comprehensive ERP suite. As a technology partner focused on powering the bank of tomorrow, Azentio

gives its clients a distinctive service that enabling them to stay ahead of the innovation curve. Azentio powers their transformation to a smarter and digital organization to reap competitive advantages from higher profit margins to faster market share growth. The company’s key differentiators include working closely with its clients and technology partners to keep pace with client requirements, banking regulations and industry trends. Azentio’s iMAL is an industry-leading Islamic core banking platform designed and developed in accordance with the Sharia guidelines, and it is certified by AAOIFI. iMAL helps traditional and emerging financial institutions drive truly digital transformation to achieve frictionless customer experiences, larger ecosystem play, insights-driven interactions and ubiquitous automation. As iMAL addresses specific country and regulatory requirements, forwardthinking Islamic banks in over 40

Banking and Finance news in the MEA market

countries rely on iMAL to service millions of customers around the world. Its proven scalability and high availability make it a premier choice for financial institutions committed to implementing a 24/7 reliable platform. iMAL addresses the core banking, Islamic banking, omnichannel, payments, treasury, origination, liquidity management, risk management and compliance, analytics and artificial intelligence, and blockchain requirements of Islamic financial institutions to drive business excellence. iMAL has been architected out of years of experience and offers several powerful and differentiating features making it one of the most comprehensive, flexible and scalable solutions available in the market. The banking platform offers an industry-leading total cost-of-ownership benefits based on lower infrastructure and ongoing operating costs, as well as increased productivity. The platform helps clients drive new revenue opportunities, increase productivity, and deepen relationships with their customers, employees, and stakeholders. iMAL permits the co-existence of Islamic and conventional banking in the same core banking infrastructure and allows user access restrictions and different screen layouts for Islamic and conventional operations.

Best User Experience Solution Provider BPC

In recognition of its open-loop platform that is helping end-user public transport operators and drivers track their revenue in real-time and manage their fleet for the first time, BPC was accorded the Best User Experience Solution Provider in the Middle East for O-CITY. The platform also allows acceptance of different payment methods from passengers, including QR codes, NFC and prepaid cards such as the ‘Moja Carte’ which can be topped up to pay for public transport. O-CITY, an innovative e-ticketing system from BPC, is delivering a frictionless payment experience at every city touchpoint including tollgates, buses, trains, subways as well as parking facilities, bike rental and city tourist attractions. As public transport payments are gradually shifting from cash and closed-loop cards to a more holistic open-loop ticketing experience across all channels, O-CITY is currently available in more than 130 cities.

Best Data Management Solution Provider Thiqah

Thiqah received the Best Data Management Solution Provider in the Middle East. Thiqah developed the Wathiq, which is an online service that helps enterprises and entrepreneurs to develop and create new business opportunities. An Application Programming Interface (API) provides a direct data verification mechanism for individuals and organizations through electronic linkage to obtain the latest data from governmental entities instantly. The Saudi Arabia-based firm is paving the way to link data between the ministry of commerce and banks as well as financial institutions to make use of the registered commercial licenses and certificates and provide a level of efficiency and security Since its inception, Thiqah has been an outstanding corporation offering smart solutions and creative services for the business sector in Saudi Arabia

Best Risk Management Solution Provider Loxon Solutions

Loxon Solutions was the recipient of the Best Risk Management Solution Provider award in the Middle East in recognition of the risk management company’s ability to offer corporates in the region solutions that preempt and mitigate risks around the clock. Over the past twenty years, Loxon Solutions become one of the market leaders providing its systems and implementation services to clients worldwide with their IFRS 9 Engine delivering a business solution providing end-to-end IFRS 9 compliances. The company’s IFRS 9 Calculation Engine offers a comprehensive solution for the automatic calculation of loan loss provisions based on IFRS 9 regulations and jurisdiction. Loxon Solutions’ IFRS 9 Engine automates data collection, accounting classification and measurement, portfolio building, classification, PD/LGD calculations, provision calculation and reporting. This reduces redundancy, standardizes the provisioning process, increases internal controls and maximizes data quality as well as calculation reliability.

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MEA FINANCE BANKING TECHNOLOGY AWARDS 2022

Best Customer Experience Provider Quality Kiosk

Quality Kiosk was the recipient of the Best Customer Experience Provider award in the Middle East, in recognition of the company’s ‘Customer Experience’ testing suite which has helped banks improve customer service, deliver consistent and high-quality digital experiences and improve user approval and satisfaction ratings With solutions such as digital testing, customer journey mapping, full-stack observability, data analytics, AIOps, omnichannel testing and Robotic Process Automation, Quality Kiosk have empowered businesses to leverage an automationdriven approach to proactively enhance processes from end to end, delivering customer delight. Quality Kiosk has an extensive portfolio of quality assurance services, platforms and products that are designed to support banks at each stage of the software development lifecycle. Integrated with cutting-edge technologies such as AI and ML, the solutions allow financial institutions to remain agile and stay at the forefront of the evolving digital landscape.

Best Analytics Solution Provider UAE Trade Connect

In the analytics solution provider category, UAE Trade Connect was conferred with the Best Analytics Solution Provider award. UAE Trade Connect was given the award in recognition of its financial services sector analytics solution that was built ‘for the banks by the banks’. The analysis capabilities of UAE Trade Connect’s platform continue to deepen as they onboard more banks and financial institutions, strengthening the network. UAE Trade Connect is a wholly-owned subsidiary of e& (formerly Etisalat Group) and runs on one of the country’s first commercialised blockchain applications. The company is a pioneer in the niche space of blockchain technology. The national trade finance platform enables banks to send invoice information into a private permissioned blockchain network through their own individual node on the blockchain. This information is then run through e&’s fraud detection system to prevent fraudulent activities through consensus mechanisms and detect duplicate or over-financing.

Most Innovative Cloud Services Provider SmartStream Technologies

SmartStream Technologies was honored with the Most Innovative Cloud Services Provider award in the Middle East. This award recognized SmartStream Technologies’s leading position in offering a wide range of cloud management solutions that offer advanced assessment services ensuring that financial service institutions’ path to cloud transformation is seamless, quick and cost-effective. The company’s managed services bring many of its market-leading solutions to its banking customers in a scalable, reliable, secure and cost-effective way. As the cloud is becoming a key enabler of banks’ digital transformation initiatives, SmartStream’s cloudenabled solutions are the norm and they are the basis for its rapidly growing managed services. SmartStream AIR, a key element of the company’s portfolio, is an AI-enabled reconciliation platform that can match any structured or unstructured data sets in seconds rather than weeks. Meanwhile, the company recently unveiled Affinity, an observational learning solution driven by ML and aimed at improving operational data management and data quality.

Banking and Finance news in the MEA market

Most Innovative Mobile Banking App Xebia

The Most Innovative Mobile Banking App award was given to Xebia in honor of its unwavering support to the banking sector through its next-generation mobile application that covers all aspects of retail banking. The award was conferred to Xebia in appreciation of its mobile banking solutions that help in the elimination of paperwork, risk reduction in core activities and less time spent servicing clients, conducting transactions and settlements. The mobile banking application comes with a completely digitalized onboarding process enabling new customers to open accounts in a matter of minutes and includes Know Your Customer as well as Anti Money Laundering checks. Xebia’s mobile app includes a one-app marketplace including multi-service Shari’ah compliant banking, scheduled transfers and payments, money transfer through chat and a microservices-based digital transformation layer connecting the mobile app with downstream systems. The mobile-first approach helped in catering to the digital transformation of retail banking by adding convenience and improving customer experience.

Best Regulation Technology Solution Provider Codebase

In recognition of its outstanding services in delivering regulation technology solutions, the Best Regulation Technology Solution Provider award went to Codebase Technologies in recognition of the firm’s highly adaptable and flexible solution, built using an open API-driven and open-source microservices architecture. Codebase’s versatile solution enabled one of the firm’s clients, a leading financial services provider in Bahrain, to create accurate CAGR reports, RISK reports, Prudential Information Returns for Islamic banks and other central bank required reports, thus enhancing the efficiency and quality of its regulatory reporting. The company’s solution is cloud and database agnostic and can be integrated with banks’ existing core banking systems, cutting down on implementation time and overall cost. Codebase creates digital financial experiences for conventional and Islamic banks, fintechs, neobanks as well as lenders and startups.

Best Communications Infrastructure Provider Avaya

Avaya was the recipient of the Best Communications Infrastructure Provider award. The award honored Avaya for its track record in providing the vital communication infrastructure that allows banks and financial services providers to conduct their day-to-day business. The company’s One-cloud experience platform which is dedicated to empowering financial organizations to compose unique, modernised and personal experiences and allows banks to more rapidly bring new capabilities to their existing solutions for their customers. Avaya is the leading pure-play communications and collaboration provider globally with over 144 million users in 190 countries. The company seeks to enable banks to innovate at the edge and achieve speed to value. While the shift to remote and hybrid working was accelerated by the outbreak of COVID-19, new attitudes towards work and the office will likely carry through to the post-pandemic era. Avaya’s communication and workstream collaboration solutions provide security of data and contact even when teams and staff are working remotely.

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MEA FINANCE BANKING TECHNOLOGY AWARDS 2022

Best Open Banking & API Solutions Provider Mindgate Solutions

In recognition of its ability to provide the best open banking and API solutions that have been instrumental in delivering core banking transformation engagements for more than 65 global banks and payment Solution providers, Mindgate Solutions was honored with the Best Open Banking & API Solutions Provider award. Mindgate Solutions provided its innovative solutions for their payments, cash management and treasury services as well as for their card solutions to a leading financial institution in the GCC region, which enabled the bank to achieve industry recognition for excellence. With operations in India, the Middle East, the US and Association of Southeast Asian Nations (ASEAN) market, Mindgate Solutions’ runs two development centers, five support centers and four global sales centers. The company’s Merchant Management allows banks to onboard all merchants on a single platform and defines the scheme enablement for merchants as well as dynamic routing with merchants settlement and pay-outs.

Most Innovative Payment Solutions Provider Volante Technologies

Volante Technologies received the Most Innovative Payment Solutions Provider award in the Middle East. The award was given in honor of the firm’s support to the financial services sector where it is working with over 100 banks globally, including powering four out of the world’s top five corporate banks with its solutions that process millions of transactions worth trillions of dollars daily. The company’s VolPay facility allows Middle East banks to configure a payment solution to meet specific needs and provide the only multinetwork managed service solution which is available on premises or in the cloud. Last year, Volante Technologies supported GCC central bank to launch a new instant payment system following a successful pilot phase with two local banks.

Best Wealth and Investment Technology Provider additiv

The Best Wealth and Investment Technology Provider award was given to additiv. The award was conferred to additiv in honor of the significant strides that the company has made in the Middle East market with its business model enablement solutions since opening its regional office in Dubai offices in 2020. additiv offers a range of solutions including Hybrid Wealth Manager, Wealth Robo Advisor and Embedded Wealth. The company is scoring on many fronts including the clear separation between interaction channels and the orchestration platform or its DFS system which offers an extensive set of APIs for integration and interaction with other systems and data providers. additiv also offers a unified data structure for the integration of external data feeds. Over the past two years, additiv has positioned itself as a leader in business and technology enablement and they have had several wins, including with the investment units of Saudi Arabia’s top five banks and a leading External Asset Manager in Dubai.

Banking and Finance news in the MEA market

Most Innovative Digital Wallet Deployment Magnati

First Abu Dhabi Bank’s Magnati was the recipient of the Most Innovative Digital Wallet Deployment award. The award was conferred to the payments firm in recognition of its partnership with Middle East ride-hailing giant Careem, enabling the launch of Careem Pay, a new payments service on and beyond the super-app. Magnati is leveraging the APIs that form the basis of its “Payment as a Platform” strategy to broaden the range of financial services offered by Careem Pay. Careem’s digital wallet and fintech arm, Careem Pay, allows customers to store money in the digital wallet, make peer-to-peer transfers as well as pay for utilities and goods and services through the mobile app. Careem super app offers 11 services in the UAE including ride-hailing, food and grocery delivery, micro-mobility, payments and partner services such as home cleaning and PCR testing—all of which can be paid for using Careem Pay.

Best Digital Transformation Consultancy Firm SR Intelligent Technologies

SR Intelligent Technologies was the recipient of the Best Digital Transformation Consultancy Firm award in the Middle East. The award was presented to SR Intelligent in honor of the company’s specialized consulting services that they provide to the region’s banking and financial services sector. With more than 400 plus technology experts across the globe, Dubai-based SR Intelligent has worked with several leading financial institutions in the GCC region to advance their businesses and optimize workflows. Throughout the process of building its proven track record, the company has grown deep roots in and accumulated a broad knowledge of banking technologies through the process of helping their extensive portfolio of leading banks in the Middle East region and further afield in Asia. SR Intelligent offers testing and quality assurance, consulting, outsourcing and managed services. The company’s solutions ensure that banks are compliant with regulatory changes, are technology ready, protected from cyberattacks and operate with streamlined day-to-day operations.

Best Islamic Fintech Systems Integration Provider DDCAP

The Best Islamic Fintech Systems Integration Provider award went to DDCAP. Integrating fintech solutions is a complex and vital activity in today’s banking world. Since its establishment 25 years ago, DDCAP is one of the biggest intermediaries in the Islamic finance sector. Islamic finance institutions, with Shari’ah-compliant oversight adding an extra layer of requirement over and above their peers in conventional markets, are especially focused on risk management, governance and compliance. Following the increasing and overlapping resonance of responsible financing, DDCAP with its ETHOS Asset Facilitation Program connects the global Islamic financial market responsibly. London-based DDCAP unveiled ETHOSTerminal last year, bringing additional integration functionality to its clients via an open market environment that enables users’ full discretion in choosing trade counterparts. The company works with several Shariah-compliant banks in the Middle East and aspires to connect to the global Islamic financial market responsibly while promoting awareness of the business.

mea-finance.com

MEA FINANCE BANKING TECHNOLOGY AWARDS 2022

Best Cloud-Native Digital Platform Infosys Finacle

In the cloud-native digital platform category, Infosys Finacle was honored with the Best Cloud-Native Digital Platform award in the Middle East region. The award was given in recognition of how the digital banking solutions’ cloud-native solution suite and Software as a Service (SaaS) services help banks to engage, innovate, operate, and transform better. Finacle’s cloud-native approach ensures delivery and support across managed cloud services for private, public and hybrid clouds with seamless porting of their applications to any cloud. Finacles’s cloud-native solutions allow banks to compose contemporary digital business models such as ‘Banking as a Service’ with ease, using the company’s open APIs, webhooks and pre-integrated API management infrastructure. As the financial services sector is going through unprecedented digitalization, Finacle is helping both traditional and emerging financial institutions drive truly digital transformation to achieve frictionless customer experiences, larger ecosystem play, insights-driven interactions and ubiquitous automation.

Best QA/QE Solution Provider of the Year Expleo

Expleo Solutions was awarded the Best QA/QE Solution Provider of the Year award in the Middle East. The company, which focuses on business assurance, quality assurance and software testing for the banking, insurance and financial services sector, was given the award in recognition of how it is supporting financial services providers achieve operational excellence. With over 40 years of industry experience leveraging its wide-ranging expertise in digitalisation, hyper-automation, cybersecurity and data science, Expleo is present in more than 30 countries. The company has served over 150 customers in Asia-Pacific, the USA, the UK as well as Europe and the Middle East. Its track record in the Middle East includes a major Core Banking Solution upgrade in a multi-country consolidation, the implementation of a payment system hub for a leading Middle East bank and managed testing services for one of the world’s largest banks.

Banking and Finance news in the MEA market

Payments Technology Executive of the Year

Houssam Chaker, Regional Head at Volante Technologies Houssam Chaker, Regional Head at Volante Technologies was the recipient of the Payments Technology Executive of the Year Award in the Middle East. With 15 years of career and leadership experience as well as an unrivaled depth of knowledge in digital transformation across several industries, but with a specific focus on payments, banking and financial services sectors, he has had a positive impact in shaping the new digital financial landscape in the MEA region. Mr. Chaker, who has background roots in the software industry, has been at the helm of Volante Technologies in the MEA region since 2020, oversaw the delivery of both the processing of the first-ever Instant payment in Saudi Arabia and the first-ever cloud-based payment services ecosystem deployed within the Middle East. Under his leadership, Volante has provided cloud-native and APIfirst payment modernisation solutions to the MENA region to support governments and companies with instant payments and next-generation cross-border. The company is also turning open banking into business opportunities, speeding up corporate onboarding and simplifying the complexities of ISO 20022 migration.

Technology Executive of the Year

Haitham Kaddoura, CEO, SmartStream

Technologies Group

Haitham Kaddoura, the CEO of SmartStream Technologies Group was the recipient of the Technology Executive of the Year award in the Middle East. Mr. Kaddoura, who has been at the helm of SmartStream since 2016, has nearly three decades of entrepreneurial and leadership experience having been part of the Dubai Government initiative to establish the Dubai International Financial Centre (DIFC). Under the leadership of Mr. Kaddoura, SmartStream returned to profitability in just a few months and implemented a raft of measures that would calibrate the company and change its priorities while getting the innovative technology solutions provider’s diverse workforce and divisions to work together towards a common goal. Today, SmartStream boasts of a comprehensive suite of solutions, which each address specific pain points in the industry—and which work together to create a portfolio of technologies and services that help banks to be more agile and responsive at a time when they face growing competition from fintech and challenger banks.

mea-finance.com

LIFESTYLE

50 Jahre BMW M: The BMW M4 edition model marking the company’s anniversary 50 Jahre BMW M: The BMW M4 edition model marking the company’s anniversary

Limited edition, unique design features, marketspecific configuration: to mark the start of its sixth decade of existence, BMW M GmbH is offering M enthusiasts an exclusive collection of rarities based on its high-performance sports cars

i t h eve n t s fe a t u r i n g sensational new model innovations BMW M GmbH is celebrating the first five decades of its existence during these weeks and months. On 24 May 1972, the partnership agreement for BMW Motorsport GmbH was signed. Exactly 50 years later to the day, the company now known as BMW M GmbH is presenting an exclusive collection of edition models as a current anniversary highlight.

EXECUTIVE DIRECTOR AND PUBLISHER Kenneth Mitchen ken.mitchen@mea-finance.com GROUP COMMERCIAL DIRECTOR Nap Estampador nap.estampador@mea-finance.com Tel : +971 50 100 5488 DIRECTOR Andrew Cover andrew.cover@mea-finance.com Tel: +971 50 931 3236

With the BMW M4 Coupe, M enthusiasts in the Middle East can express both their passion for racing and their awareness of tradition. Limited editions, exclusive design features and individually selectable equipment options ensure that each edition vehicle can become a unique car that reflects the personal style of its owner. The exclusive character of the edition models is the result of a market-specific configuration with unique design features and a strictly limited number of units in each case.

In this way, fascinating rarities are created for the most important automotive markets around the world. For the exterior paintwork of the edition vehicles, style-defining colours from the history of BMW M GmbH are being reissued. These are complemented by M forged wheels in a similarly exclusive colour scheme and striking accents in the interior. In the Middle East and other selected sales regions, BMW M GmbH is offering an exclusive edition of the BMW M4 Coupe to mark its anniversary. Their expressive appearance is enhanced by 19-inch M forged wheels on the front axle and 20-inch wheels on the rear axle featuring a doublespoke design, which are being offered for the first time in the colours Orbit Grey Matt and Gold Bronze matt. In the interior of all edition vehicles based on the BMW M4 Coupe, door sill panels bearing the lettering “Edition 50 Jahre BMW M”, a metal plaque on the centre console with the lettering “M4 Edition 50 Jahre BMW M” and a corresponding imprint on the headrests of the standard M sports seats and the optional M carbon bucket seats for driver and front passenger hint at the anniversary. The “Edition 50 Jahre BMW M” lettering on the door sill trims and M stripes on the headrests of the front and outer rear seats characterise the interior. A metal plaque on the cupholder cover of the centre console bears the inscription “M3 Edition 50 Jahre BMW M” and the reference “1/500”.

EVENTS AND MARKETING MANAGER Cris Balatbat crissyb@mea-finance.com Tel: +971 58 594 4818

ADMIN AND FINANCE MANAGER Marilyn Nainque marilyn@mea-finance.com Tel: +971 58 5025836

EVENT AND CONTENT PRODUCER Natasha Cristi natasha@mea-finance.com Tel: +971 50 303 4235

WEB ASSISTANT Marie Orayan web@mea-finance.com

SENIOR DESIGNER Florante Magsakay Tel: +971 52 570 1811

Banking and Finance news in the MEA market

FEATURE CONTRIBUTORS: Adrian Murdoch, Mushtak Parker, Walter Sebele editorial@mea-finance.com

Dubai office: #404, Building B, Al Saaha Offices, Old Town Island Burj Khalifa District PO Box 487177, Dubai, UAE Email: info@mea-finance.com

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