MEA Finance - August 2021 by meafinance

August 2021

Leading inclusive innovation Rola Abu Manneh, Chief Executive Officer Standard Chartered Bank UAE

August 2021

Leading inclusive innovation Rola Abu Manneh, Chief Executive Officer Standard Chartered Bank UAE

10 Market Focus | 14 Private Equity | 20 Roundtable Event | 36 Banking Technology | 54 Cryptocurrency

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In this issue...

s we reach the halfway mark in Q3, 2021, there appears to be a cautious optimism abroad, with curiosity for what the near future will bring. The post-pandemic world, or if you prefer, the New Normal is underway and clearly demonstrated in the banking and financial world by the digital options and techniques now widely adopted in daily life. This is clearly seen in our August 2021 issue of MEA Finance Magazine where as well as providing extensive coverage of our Future of Payments roundtable, hosted by Volante Technologies and starting at page 20, we also provide a powerful line-up of banking technology leaders, expressing their thoughts in our Banking Technology Innovation Enablers feature, pages 36 to 49. As well as the changes wrought by technology in the world of finance, our gradual emergence from the shadow of the pandemic has spurred reflection on wider societal issues, presenting a chance to focus on the very real opportunities for benefits that wider inclusivity can bring for banks and businesses. This theme is explored in our cover story, which this month features Rola Abu Manneh, the Chief Executive Officer of Standard Chartered Bank in the UAE, “Through courage, conviction, dedication and commitment, anyone is capable of navigating their way to corporate success”. Our Market Focus this month is upon the United Arab Emirates, Page 10, where we asses that despite the depression of oil prices and the scourge of Covid-19, analysts are expecting the country to post significant growth. We then take a look into the regional Private Equity and Venture Capital scene between pages 14 and 19, which is experiencing an upswing in activity and where, in an interview with Alex Gemici, Chairman & CEO, Greenstone Equity Partners, he defines its prospects in the region, “Today, the venture capital industry in the region is enjoying a "purple patch" as governments around the region from Amman to Kuwait City look to support SMEs as part of their efforts to diversify their economies from fossil fuel production”. We wade into the volatile waters of crypto currencies from page 54, where we look at the appetite for these and digital assets in the region, noting the caution that they are viewed with due to their lack of a central authority. Neatly following, on page 55 is our Opinion Piece which this month is offered by Erwin Dokter, Chief Executive Officer of Zeniq, expounding on Blockchain Tokenisation and Crypto Assets. Finally, with our market news covering some of the regional finance and banking activities of note in the past weeks, we hope this issue brings you some useful insights and helpful foresight.

mea-finance.com

CONTENTS

CONTENTS 32

MARKET NEWS

KPMG Report: CEO’s have shifted investment focus to customer experience, technology and data security

Emirates Development Bank Board reviews strategic progress, applauds achievements in H1, 2021

MARKET FOCUS

Staying ahead of the curve

PRIVATE EQUITY

14 18

The new frontier of investment Venturing Forth

ROUNDTABLE EVENT

The frictionless future for payments

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 EXECUTIVE DIRECTOR AND PUBLISHER : Kenneth Mitchen Email: ken.mitchen@mea-finance.com

Banking and Finance news in the MEA market

Banking Technology Innovation Enablers: Empowering Digitalization

39 40 42 44

Intelligence Quotient Mission Accomplished Pride and Passion Beyond Boundaries

PARTNER CONTENT

Emerging trends reshaping the retail lending landscape

Building the future of financial transactions together

CRYPTOCURRENCY

Are cryptos a bubble or the future of finance?

OPINION

Tokenization, more than the sum of its parts

LIFESTYLE

Presenting the elegant oasis of Raffles Maldives Meradhoo

39 52 46

57 58 mea-finance.com

MARKET NEWS

KPMG Report: CEO’s have shifted investment focus to customer experience, technology and data security KPMG’s Banking Pulse Quarterly survey provides a timely snapshot into CEOs’ expectations on business growth resumption, the impact of vaccine rollouts, evolving organizational requirements, and business transformation priorities

he latest KPMG Banking Pulse Quarterly, with the financial performance of 10 listed Saudi banks, presents insights from the firm’s recent CEO Outlook pulse Survey, interviewing 60 bank CEOs from around the world. While Covid-19 certainly brought disruption to the financial services sector in Saudi Arabia, the sector has weathered the storm well, and has thrived again from a financial performance perspective. Khalil Ibrahim Al Sedais, Office Managing Partner – Riyadh at KPMG in Saudi Arabia, said: “Although we have been experiencing our fair share of trials and tribulations over the past year, we clearly see a bright future for Saudi Arabia’s banking industry which performed better than it ever has over the past year. With the sector’s total assets crossing SAR 3 trillion (799.9$ billion) and total deposits approaching the SAR 2 trillion (533.2$ billion) mark, generally the banking system is in great shape.” The survey indicates that 45% of CEOs globally envision their companies’ return

to normality happening sometime in 2022. All survey respondents agreed that a successful vaccine roll-out is the most important factor in bringing back a sense of normality. Further, nine out of 10 CEOs are keen to ensure their staff’s safety by asking employees to notify them when they’ve been vaccinated. Still, %50 of bank leaders are concerned that not all employees will have access to the Covid19- vaccines, which could potentially jeopardize their operations and competitive advantage. Furthermore, the survey found that 56% of bank CEOs have a newfound appetite for M&A – and the recently concluded merger between SAMBA and NCB may pave the way for further consolidation in the Kingdom’s banking sector. The top drivers for investment have shifted into the digital realm to transform the customer experience and value proposition while increasing market share and transforming business models at a significantly faster pace. Moreover, the changes which have taken place over the pandemic have pushed CEOs to reconsider their firm’s priorities.

Banking and Finance news in the MEA market

Khalil Al Sedais Office Managing Partner – Riyadh, at KPMG in Saudi Arabia

That being so, customer-centricity and technology are now at the forefront of their minds, alongside investments in data security measures, digital communications and cloud computing. The survey also highlighted the enduring focus on environmental factors and climate risk by linking them to trust and reputation within the financial industry. Likewise, there is a heightened focus on the “S” component of ESG, and in line with that, %88 of bank CEOs are looking to lock in the gains in sustainability and climate change which were brought about by the pandemic as opposed to %55 in the previous year. On the diversity and inclusion front, the report noted %62 of bank leaders believe that progress has moved too slowly, with an overwhelming majority of %85 of leaders agreeing that there is still much to be done in regard to gender diversity on boards.

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MARKET NEWS

Emirates Development Bank Board reviews strategic progress, applauds achievements in H1, 2021 In their review of the first half of 2021, The Emirates Development Bank sums up the numerous activities and achievements that they have concluded this year to date

he Emirates Development Bank (EDB), a key financial enabler of the country’s economic diversification and industrial transformation agenda, held its fifth Board meeting today to discuss the bank’s progress in its strategy roadmap for the first six months of 2021. The EDB Board reviewed the Bank’s achievements in the past six months including the launch of its credit guarantee and co-lending program with five partner banks; partnership activation with the Ministry of Industry & Advanced Technology, the onboarding of anchors to the National Supply Chain Finance platform, and the successful issuance of its second bond of AED 750 million which was oversubscribed four times. These initiatives are part of EDB’s strategy to support the UAE’s industrial g ro w t h , a d o p t i o n of a d va n c e d technology, enhancement of the role of

SMEs and promotion of innovation and entrepreneurship through its tailored suite of products and services. His Excellency Dr Sultan Ahmed Al Jaber, Chairman of the EDB Board and Minister of Industry and Advanced Technology, said: “EDB has taken strong strides in its strategic roadmap to support the country’s economic diversification efforts in line with the vision of the country’s wise leadership. The steps taken in such a short span of time, since the launch of our new strategy, augurs well for our long-term plans as a key contributor to the achievement of our leadership’s objectives.” At the meeting, the Board also discussed the plan for H2 2021 with key initiatives to deploy assets in the developmental space, as well as to further the digitization agenda across the Bank. Ahmed Mohamed Al Naqbi, CEO of EDB, said: “We have made considerable

AS WE PROGRESS THROUGH THE REST OF THE YEAR, OUR IMMEDIATE PRIORITY IS TO RAMP UP EFFORTS SO THAT EDB DELIVERS BEST-IN-CLASS SOLUTIONS TO A WIDER CUSTOMER BASE 8

Banking and Finance news in the MEA market

His Excellency Dr Sultan Ahmed Al Jaber Minister of Industry and Advanced Technology and Chairman of the EDB

progress in H1 of 2021. Our partnerships with government entities, partner banks and anchor buyers are significant milestones in our journey as they highlight our commitment to provide an all-encompassing business ecosystem to SMEs and unlock immense potential for them. As we progress through the rest of the year, our immediate priority is to ramp up efforts so that EDB delivers best-in-class solutions to a wider customer base.” In the first half of 2021, EDB has signed credit guarantee and co-lending programs for SMEs in the UAE with five partner banks, including Commercial Bank of Dubai, RAKBANK, National Bank of Umm Al Qaiwain [NBQ], Mashreq Bank, and the First Abu Dhabi Bank [FAB]. As part of the MoUs, the partner banks can offer up to AED 10 million financing to a SME, and 50% of the facility amount will be either guaranteed or co-lent by EDB. Moreover, EDB also joined forces with the Sharjah Chamber of Commerce and Industry to foster the development and growth of UAE-based manufacturers, exporters and SMEs through financial support. As part of the agreement, EDB will extend direct and indirect lending support, equity funding for SMEs and startups in the priority sectors as well as non-financial support in the form of mentorship and business guidance.

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MARKET FOCUS

Staying ahead of the curve

The twin shocks of COVID-19 and a plunge in oil prices tossed the world economy into the greatest recession since World War II, but the UAE is weathering the negative trend and analysts expect the country to post significant growth this year

hough the UAE has a far more diversified economy compared to its Gulf neighbours, oil still contributes significantly to the country’s gross domestic product (GDP). However, any volatility in the global and oil markets can dampen investor confidence and affect the country’s economic performance. The twin shocks of the COVID-19 pandemic and low oil prices tossed the world economy into the greatest recession since World War II, however, the UAE is weathering the negative trend in global markets and analysts remain optimistic about the country’s growth this year.

Moody’s affirmed its Aa2 issuer rating of the UAE in May, saying the rating is “supported by the relatively muted impact of the pandemic on the federal government’s fiscal strength,” in part due to an effective policy response to the virus. As part of the government’s initiatives to open its economy, the UAE is the most vaccinated nation globally with 75.6% of the population having received first dose of COVID-19 vaccine and 65.8% received two doses of the vaccine, as of July 11, 2021. IHS Markit said that business conditions in the country’s non-oil private sector

Banking and Finance news in the MEA market

continued to improve in June, although at a weaker pace, due to prolonged pandemicrelated curbs and border closures. The UAE’s efforts to diversify the economy away from heavy dependence on oil revenues are opening more investment opportunities in the non-oil private sector and are critical to achieving sustainable growth. “The UAE’s institutions and governance strength has been demonstrated by the spearheading of reforms destined to improve the business environment, and the progress made on diversifying the economy and fiscal revenues away from the hydrocarbons sector,” said Moody’s.

Compared to other GCC countries, the UAE has a slightly better public debt outlook and the implementation of structural reforms to nurture sustainable growth and the development of transparent rules-based fiscal frameworks is expected to spur long-term sustainable growth.

Bolstering the coffers D e s p i te t h e UA E c e nt ra l b a n k ’s decisive and far-reaching actions that have helped to prop up the economy since the arrival of the pandemic, the financial services sector continues to operate in a challenging environment characterized by low interest rates while dealing with issues relating to counterparties’ creditworthiness and provisioning, said KPMG. Analysts projected that UAE banks’ profitability will remain squeezed as pressure on net interest income – their main source of revenue – persists and provisions increase further. However, S&P Global estimated that gross lending growth will accelerate slightly this year as UAE banks recycle the central bank’s liquidity support to help their clients navigate the pandemic crisis and due to borrowing by the government and its related entities ahead of Expo Dubai 2020. Lending growth is also expected to be supported by an increase in corporate borrowing as some firms will be executing capital expenditures that were deferred last year. Compared to their regional peers, UAE banks are digitalizing complex processes and end-to-end customer journeys across the front, middle and back offices to meet the evolving needs and expectations of customers that includes the quest for self-service, seamless, automated, and omnichannel experience – with the minimal waiting time. The country’s first independent digital banking platform, YAP, was launched in March. Other neobanks that are yet to launch in the UAE include Zand, the first Shari’ah-compliant digital-exclusive bank and while ADQ is also looking to set

THE UAE’S INSTITUTIONS AND GOVERNANCE STRENGTH HAVE BEEN DEMONSTRATED BY THE SPEARHEADING OF REFORMS DESTINED TO IMPROVE THE BUSINESS ENVIRONMENT, AND THE PROGRESS MADE ON DIVERSIFYING THE ECONOMY AND FISCAL REVENUES AWAY FROM THE HYDROCARBONS SECTOR – Moody’s

up a digital bank using a legacy banking license of First Abu Dhabi Bank. “The UAE has a strong regulatory foundation for the launch and operations of digital-only banks,” said KPMG.

Fiscally fit The UAE Cabinet approved a $15.8 billion (AED 58.3 billion) budget for the fiscal year 2021 last November. The 2021 federal budget is aimed at advancing the country’s development plans and projects to improve standards of living and provide a decent life for citizens and residents alike. Despite the current fiscal budget being smaller than last year’s $17 billion (AED 61.35 billion), the UAE government allocated a larger share of it towards social development including social welfare, health, and education. In April, the International Monetary Fund (IMF) revised the UAE’s growth forecast for 2021 from 1.3% in October 2020 to 3.1% on the back of recovering oil prices and the country’s advanced vaccination rate – which both cushioned the economy against the second wave of the virus. The UAE’s highest level of herd immunity together with a surge in exports in the next 24 months is expected to provide an additional boost to the nonoil private sector. Fitch affirmed its ‘AA-’ issuer rating of the UAE and the rating agency stated that it reflected the country’s moderate

consolidated public debt level, strong net external asset position and high GDP per capita. In a regionally coordinated move, central banks across the GCC region are also extending their stimulus aid schemes as part of regional governments’ efforts to shore up their economies which were hit by pandemiccontainment measures. In April, the Central Bank of the UAE (CBUAE) said that it was extending “integral parts” of the Targeted Economic Support Scheme (TESS), the Emirates’ economic stimulus scheme, until mid2022. The extension of key components of TESS gives UAE licensed banks access to a collateralized $13.61 billion (AED 50 billion) zero-cost liquidity facility until June 30, 2022, to provide loans to individuals, SMEs and private sector entities that were affected by the outbreak of the virus. Since its inception, the TESS program has benefitted over 320,000 customers, including individuals, SMEs and other private corporations as of March, said CBUAE. “A loan deferment program and ex te n s i ve C B UA E s u p p o r t h a ve supported earnings at the UAE’s top banks, although net interest margins slid and impairments will likely increase as repayment holidays end,” S&P Global said in a report last December. mea-finance.com

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Diversification drive Expo 2020 Dubai The World Bank expects Dubai’s hosting of the World Expo later in October to stimulate sustainable growth in the UAE driven by economic stimulus measures being implemented by the Dubai and Abu Dhabi government. Expo 2020 Dubai was delayed by a year following the pandemic. “Expo 2020 Dubai and its legacy are expected to contribute $33 billion (AED 122.6 billion) of gross value added (GVA) to the UAE’s economy from 2013–31 as well as support up to 905,200 full-time equivalents (FTE) job-years, which is equal to approximately 49,700 FTE jobs per annum,” according to EY’s The economic impact of Expo 2020 Dubai report that was released before the outbreak of the virus. The Dubai Expo site, which will be redeveloped to District 2020 after the expo, is also projected to play a critical role in the country’s future vision by supporting sustainable economic development as the UAE moves towards an innovative-driven economy while creating a business environment to support key growth sectors such as logistics and transport, travel and tourism and property development. Driving growth The UAE, both at the emirate and federal level, is introducing several initiatives to spur foreign direct investment (FDI) as part of the country’s push to drive growth in the non-oil sector as authorities are rethinking the role foreign investors can play in easing fiscal burdens and foster sustainability. The federal government recently introduced programs to shore up investment such as the ‘Make it in the Emirates’ and ‘Operation300bn’, initiatives that are aimed at supporting SMEs for the next 10-years to boost their contribution to the country’s economy output. Under the ‘Operation300bn’, the government seeks to enhance the industrial sector’s contribution to the UAE’s economic output, from the current

A LOAN DEFERMENT PROGRAM AND EXTENSIVE CBUAE SUPPORT HAVE SUPPORTED EARNINGS AT THE UAE’S TOP BANKS, ALTHOUGH NET INTEREST MARGINS SLID, AND IMPAIRMENTS WILL LIKELY INCREASE AS REPAYMENT HOLIDAYS END – S&P Global

$36 billion (AED 133 billion) to $82 billion (AED 300 billion) over the next 10 years. The UAE is also betting on both local and international tourism as it looks to boost growth in the country’s non-oil private sector. Last December, the Emirates launched a campaign to promote local tourism and its desert winter. “The Most Beautiful Winter in the World” initiative is part of the federal government’s efforts to double domestic tourism’s $11.2 billion (AED 41 billion) contribution to the economy.

$15.8 billion UAE 2021 budget

Source: UAE Federal Government

Structural reforms The UAE offers foreign investors who are interested in establishing their businesses in the country two options – establishing a presence in the mainland in any of the seven emirates or establishing in one of the UAE’s economic free zones. Last November, the government scrapped a law that required an Emirati shareholder or agent when foreigners are opening a company in the country, a move that is expected to drive FDI. The UAE’s new company law came into effect on June 1 and it will boost the country’s competitive edge in the region.

The abolition of the Commercial Companies Law that required an Emirati shareholder or agent is a significant shake-up to the UAE’s foreign ownership laws and comes almost two years after the cabinet approved a ‘Positive List’ of activities in July 2019 – under which up to 100% foreign ownership is now permitted in mainland UAE entities. In a major policy shift, the UAE also said that it would offer Emirati citizenship and passport to a set group of foreigners, including investors, professionals, and special talents – a first in the Gulf region as the government looks to give its huge expat population a bigger stake in the economy to drive growth. KPMG stated that given the current economic impact of the COVID crisis, the move to allow foreign entrepreneurs and investors to fully establish and own companies is a welcome move for new and existing investors and reinforces the country’s appeal as a regional investment hub. In the first quarter of the year, the government expanded its visa system which now allows university students to sponsor their families, introduced visafree travel with Israel and introduced a remote work visa – which allows foreign employees to live and work from the UAE. KPMG hailed the UAE’s efforts to spur foreign investment, saying the steps come as a welcome move for new and existing investors and reinforces the country’s appeal as a regional investment hub. mea-finance.com

PRIVATE EQUITY

The new frontier of investment The increase in funding during the first six months of 2021 shows how private equity and venture capital investors have become confident in navigating the unprecedented challenges of the previous year and adapting to ‘the new normal’

020 was a year like no other for all sectors of the economy, and the private equity (PE) a n d ve nt u re c a p i ta l ( VC) market was not spared either. However, despite the challenging economic conditions, the industry has proven resilient and adaptable to the new working environment.

The Middle East and North Africa (MENA) PE/VC market has expanded over the last few years as regional governments look to support SMEs as part of diversification plans despite the double whammy of COVID-19 and volatile oil prices. “PE/VC firms in the MENA region are overwhelmingly optimistic going into 2021,

Banking and Finance news in the MEA market

with nearly three-quarters expecting investment activity to increase and 43% focusing on making new investments,” said S&P Global. As Middle Eastern economies emerge from the pandemic into the new normal, PE/VC firms such as Investcorp, Wamda, SHUAA Capital, Middle East Venture Capital, Saudi-based STV and Mubadala Capital Ventures lookout for deals after the economic fallout made companies cheaper to buy and scandals such as the collapse of Abraaj Capital trimmed competition. Though there is an increasing number of investment opportunities in the MENA region, the market is still in its infancy compared to other emerging markets. As such, investors are pouring money into startups in a bid to unearth the next MENA unicorn following the 2019 acquisition of Dubai-based Careem by Uber Technologies in a $3.1 billion (AED 11.38 billion) deal, Amazon’s $580 million (AED 2.13 billion) takeover of Souq.com and Anghami’s $220 million (AED 807.9 million) public offering in New York via a merger with a special purpose acquisition company (SPAC).

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PRIVATE EQUITY

According to Bain & Company, “Based on heavy global activity in early 2021, pentup demand will likely have a strong positive impact on current-year deal numbers. All indicators suggest that funds will continue to chase deals in the sectors least affected or actually enhanced by the ongoing COVID-19 crisis.” The wave of deal-making in the MENA region is being led by Gulf states such as UAE, Saudi Arabia and Kuwait. As regional PE/VC investors position themselves for improved economic conditions there is a clear focus on new technologies whether that be enterprise and the cloud, edutech, fintech, Insurtech, MedTech, legaltech, artificial intelligence (AI), blockchain as well as other markets such as logistics and mobility and consumer and marketplaces. “As the COVID-19 situation normalized over the summer, PE investors turned their attention back to executing deals, leading the industry into a strong rebound in the second half of the year,” said S&P Global.

An enabling environment In 2020, divestment activity tumbled due to the outbreak of the pandemic, dropping by 16% to just 2,185 exit transactions compared to the previous year, due to pricing uncertainty and market volatility. However, MENA PE/VC firms are seeing a rebound in business with initial public offerings (IPOs) viewed as the main exit strategy as well as trade sales and secondary buyouts – a trend representing shifting industry dynamics region. With around $35.4 billion in assets under management (AUM) diversified by geography, asset class, and client type, Bahrain-based Investcorp has invested $1.4 billion into the region over the past decade and made a return of about 1.8 times on invested capital. Investcorp helped more four family-controlled Saudi companies in which it held stakes to list in Riyadh. The PE firm and global alternative investment manager helped with the IPOs of jewelry manufacturer L’Azurde, gym owner Leejam Sports, grocery

chain BinDawood Holding with car rental firm Theeb Rent-a-Car Co. being the latest listing. Theeb raised $137.6 million (SAR 516 million) in April by offering 12.9 million shares, representing 30% of the company’s share capital at $10.66 (SAR 40) per share. Investcorp joined forces with global asset manager Aberdeen Standard Investments to launch the Aberdeen Standard Investcorp Infrastructure Partners fund in 2019. The new regional infrastructure fund, whose size is estimated

in a deal that is expected to contribute $11.2 million in Q2 2021 and reclassify the negative cash flow hedge reserve of $14.4 million to the firm’s condensed financial statement. SHUAA acted as financial advisor on Anghami’s listing on Nasdaq Stock Exchange in March and also backed the IPO with $30 million funding through private investment in a public equity (PIPE) deal. SHUAA confirmed that it was in preliminary talks with investment banks in July to launch three blank-check firms,

PE/VC FIRMS IN THE MENA REGION ARE OVERWHELMINGLY OPTIMISTIC GOING INTO 2021, WITH NEARLY THREE-QUARTERS EXPECTING INVESTMENT ACTIVITY TO INCREASE AND 43% FOCUSING ON MAKING NEW INVESTMENTS – S&P Global

to be around $800 million and is anchored by Saudi wealth fund Public Investment Fund, looks to continue investing in the Gulf region’s real estate assets. “On top of inorganic growth strategies to enhance the value of their existing portfolio, PE/VC investors are increasingly turning their attention to minority investments in response to rising numbers of cash-strapped companies in need of liquidity injections,” said S&P Global. Meanwhile, following the merger with Abu Dhabi Financial Group in 2019, SHUAA Capital has divested several non-core assets as it pursues more tech investments. SHUAA Capital and Goldilocks Fund, a fund managed by its subsidiary, sold 3.8% and 9.8% stakes, respectively, in Bahrain’s Khaleeji Commercial Bank to GFH Financial Group in June. In May 2021, the Dubai-based asset management firm also divested its Mirfa Power Holding Company stake

Banking and Finance news in the MEA market

SPACs, as the financial services platform looks to open the emerging market to GCC investors. Bloomberg s aid t h at investor enthusiasm for blank-check firms is heating up in the MENA region at a time when the momentum for the investment vehicles has waned in the US after the lackluster share performance of recent deals and increasing scrutiny from regulators.

VC fundraising Signaling a positive outlook, thanks to COVID-19 vaccine-fuelled economic recovery expected in the new normal, VC investments are expected to remain robust in the MENA region heading into Q3 and Q4 especially in sectors like fintech and B2B services, AI, robotics and blockchain-related solutions – including non-fungible tokens. In its Q1’21 Venture Pulse Report – Global trends report, KPMG said that the

global VC market saw an explosion of activity in Q1’21 as investors across the globe competed for the biggest and best deals. As several regional startups are considering raising their pre-IPO rounds, it appears that there is a significant amount of FOMO (the fear of missing out) in the market as investors are on the lookout for deals. With as much as $1.9 trillion in dry powder globally, according to Preqin estimates, a low-interest-rate environment, government investment initiatives, and a changing regulatory landscape, it is likely that the hunt for good assets will continue to be very competitive. Together with promising new opportunities emerging in the market, the above factors bode well for economic expansion across different sectors especially in the GCC region where countries are diversifying their economies away from heavy reliance on oil revenues. “The strong competition and numerous oversubscribed rounds helped accelerate deal activity quite significantly, at least for late-stage deals in addition to driving valuations upwards,” said KPMG. July 2021 marked a promising turning point in the MENA VC market when UAEbased Kitopi raised $415 million in a Series C funding round, making it the newest entrant to the unicorn club (startups with a $1 billion valuation). Magnitt said that with over $1.2 billion invested in MENA-based startups in the first six months of the year compared to $1.1 billion invested in the full year of 2020, regional VC investors have set a new record for capital deployed with six months before the end of the year. In Egypt, trucking marketplace startup Trella raised $42 million in a funding round that was led by Maersk Growth and Raed Ventures with participation from Algebra Venture among others. Another Egyptian startup Yodawy also raised $7.5 million in a Series B funding round in July. The investment in the digital pharmacy benefits marketplace was led by Global Ventures, Middle East Venture Partners, and Algebra Ventures.

The investment in most MENA startups is late-stage focused underlining the gradual maturity of the industry. “The investment activity in 2021 has been consistent in investors’ preference for transactions at later stage deals over riskier earlier stage startups in 2020,” said Magnitt. This is evident in the case of Saudi Arabia’s Sary, a B2B marketplace that connects small businesses including mini-supermarkets, restaurants, and cafes with a network of fast-moving consumer goods wholesalers. The Saudi startup secured $30.5 million in Series B funding round in May 2021 shortly after closing its Series A round, which attracted $6.6 million in funding in April. As startups are maturing, they require increased investments to fund their growth and scale up their services and products. In June, Kuwaiti flowers and gifts full-fledged e-commerce solution provider, Floward secured $27.5 million in a Series B funding round from STV and Impact46. Egyptian B2B e-commerce platform, MaxAB also raised $40 million in a Series A funding round that was led by impact investor RMBV with participation from existing investors Beco Capital and 4DX Ventures.

A global perspective G l o b a l l y, P E / V C i n v e s t o r s a re demonstrating an overwhelmingly bullish outlook for the industry and this relatively optimistic dynamic is expected to continue over the last six months against the backdrop of the highly contagious Delta variant of COVID-19 and the growing tensions between the US and its allies on one end and China on the other. As investing for impact is gaining momentum among investors and policymakers alike, environmental, social and governance (ESG) factors continue to grab PE/VC investors’ attention. A study by S&P Global showed that 40% of global PE/VC firms are working on improving socially conscious standards within their current portfolio companies. This trend is also evident in the Middle East although

THE INVESTMENT ACTIVITY IN 2021 HAS BEEN CONSISTENT IN INVESTORS’ PREFERENCE FOR TRANSACTIONS AT LATER STAGE DEALS OVER RISKIER EARLIER STAGE STARTUPS IN 2020 – Magnitt

ESG practices appear to be in the initial stages of development in the region. “We anticipate environmental, social and governance (ESG) considerations to become an integral part of a sustainable value creation strategy for portfolio companies from the screening phase of deal-making through the exit of an investment,” said PwC. PE/VC investors in the oil-rich GCC region and the entire MENA region aim to participate in the post-COVID-19 economic recovery and transformation in their respective countries by investing in sustainable core infrastructure projects. Investors continue to focus on pandemicaccelerated sectors. “The pandemic increased funding in many areas as investors looked to get in on tech companies seeing a rapid acceleration in demand, including areas like software-as-a-service, delivery, and a wide range of consumer-focused digital solutions – from edtech and gaming to digital health services,” said KPMG. The increase in H1 2021 investments across the MENA region shows how confident PE/VC investors have become in navigating the unprecedented challenges of the previous year and adapting to ‘the new normal’, boding well for any future challenges which may arise.b. mea-finance.com

PRIVATE EQUITY

Venturing Forth MEA Finance talks with Alex Gemici, Chairman & CEO, Greenstone Equity Partners, who paints a detailed picture of the prospects for the Private Equity and Venture Capital market in the Middle East, telling us that while there are challenges, there are also bright spots in the region too Alex Gemici Chairman & CEO, Greenstone Equity Partners

rivate Equity activity reached a peak in Q4 2020, remaining positive in 2021. How do you sum up the regional PE & VC market? In short: VC is booming, and PE continues to consolidate. While the Financial Times reported that, globally, PE broke a 40-year record with $500 billion of deals in the first half of this year alone, some markets, including the MENA region, have not grown in the same pace. It remains true that on a relative basis, private funding is substantially underutilized in MENA compared to Western markets. Today, the venture capital industry in the region is enjoying a “purple patch” as governments around the region from Amman to Kuwait City look to support SMEs as part of their efforts to diversify their economies from fossil fuel production. Sovereign funds are also either making direct investments or backing venture funds in the hope that they will unearth the next MENA unicorn, or at minimum help drive economic growth in the business and service sectors. The UAE, Jordan and Lebanon continue to be the centers of influence for PE and VC in the MENA region. Overall, however, a lack of finance available for businesses, particularly SMEs, continues

to present challenge to growth. This results in SMEs’ inability to utilize capital to scale as rapidly as they should. A growing youth population also means local governments need to generate levels of economic growth capable of putting these young people to work. As governments alone cannot employ the waves of young people coming into the workforce, they need the private sector to drive employment and further growth. Meanwhile, MENA-based PE firms are still recovering with more firms simply shutting down or consolidating due to capital raising challenges. EY reports that regional participants in the sector have raised about $1 billion in capital over the past five years, down from the high of around $5 billion in 2008. Local fund managers acknowledge that there is little appetite from either local or international investors to commit to funds from the region. One factor in this is the geographical diversification needs of local investors, and continued imbalance in risk-adjusted returns between North America/Europe and MENA. The difficulties in fund-raising predate the pandemic. The dislocation in the marketplace started as early as 2015, even before the Abraaj implosion in 2018. The long-term outlook for MENA-

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based PE is that the sector is downsizing to a more modest level and fund-raising remains difficult.

Which market sectors or industries in our region will see the most Private Equity and VC activity? There are unprecedented opportunities in the market on which PE and VC firms can capitalize across sectors leading the transition to the fourth industrial revolution. Sectors that are attracting interest and investment include financial services, AI, robotics, service sector solutions, healthcare, and education. There is also a strong, continued investment in renewables, food security, and sustainable real estate. In each of these industries, much of the focus revolves around technology to create adaptive, efficient, and effective solutions to face expected global challenges and increase economic productivity. The bright spot today is that there is growing VC interest to back technology start-ups in the region. MENA’s fintech industry alone is expected to hit a record valuation of $3.45 billion by 2026. In just the first quarter of 2021, related venture investments increased 163% year-on-year, as the pandemic caused an acceleration in the fintech industry.

Focus will be the differentiator, with PE firms focusing on established companies with track record, profitability and solid cashflows. It is worth noting that, globally, PE firms today have $1.6 trillion in their disposal to go on a shopping spree for companies, and that dry powder is slated to grow further as a record number of PE funds are currently on the market to raise an additional $900 billion this year alone. However, considering that the US and Europe have so many PE firms with effectively unlimited dry powder pushing valuations ever higher, investment opportunities in MENA, which continue to be attractively priced relative to other regions, look more and more appealing.

into Shariah-compliant funds have also grown significantly in the past 18 months. MENA VC investment into start-ups ticked up to $245 million in Q1 2021 as investors focused on fintech solutions across the spectrum, as well as e-commerce and cloud kitchens. There have also been several blockbuster VC exits in the last 18 months which have delivered stellar returns for local and international investors alike: Careem sold to Uber in early 2020, InstaShop sold to DeliveryHero, and Lebanonbased music streaming platform Anghami’s merged with Nasdaqlisted SPAC Vistas Media Acquisition Company, which raised $100 million in its 2020 listing.

How have Private Equity Funds performed in the past 18 months?

Do you expect Private Equity firms to become more involved in M&A in the region?

Driven by increased activity and investor appetite for disruptive technology companies, VC is the clear winner globally with an annual trailing return of almost 54% in 2020. These returns remain consistent with strong threeand five-year returns of 30% and 20%. As a result of these returns, GCCbased investor interest in this strategy has grown substantially, even during the pandemic. Greenstone Equity Partners was an early adopter of virtual roadshows, starting in March 2020, and, during the ongoing travel restrictions, was able to leverage its relationships to secure new capital for its fund manager partners at similar or higher volume than 2019 across a number of alternative investment strategies. With more available opportunities in the alternative fund space, investments

In Q2 2021, global PE and VC buyout deals doubled to just over 1,000 compared to Q1 2021. There is considerable pentup demand for M&A and consolidation persists, particularly in the UAE, Saudi Arabia, Qatar, Kuwait and Egypt. Through the first half of 2021, the total value of mergers and acquisitions in MENA reached $44.8 billion. While there is movement, there is still room for more activity. Major sectors in need of consolidation include financial services (banks), healthcare (clinics, hospitals, pharmacies), real estate and hospitality (hotels, restaurants etc.), as well as covid-impacted industries. There are also a number of potential opportunities currently available in the market including in cybersecurity, distribution and construction sectors.

THERE IS CONSIDERABLE PENT-UP DEMAND FOR M&A AND CONSOLIDATION PERSISTS, PARTICULARLY IN THE UAE, SAUDI ARABIA, QATAR, KUWAIT AND EGYPT

Greenstone Equity Partners is also seeing increased interest in infrastructure both from fund managers looking to raise capital from the region and local investors looking to deploy capital into sustainable projects. We expect this trend to continue over the next five years.

Are SPACs (Special Purpose Acquisition Companies) competition or an opportunity for Private Equity? Special Purpose Acquisition Companies, also known as blank check companies, are not new - they were invented in 1993. For many reasons, the SPAC structure languished for the first 25 years in its existence and then exploded into the market in 2020 with unexpected veracity. SPACs raised $45 billion between 1993 and 2019. In 2020 alone, the number jumped to $65 billion and during the first six months of this year, an additional $115 billion were raised by SPACs. According to SPAC Analytics, compared to the traditional IPOs, SPACs went from less than 1% of the IPO market in 2003 to 55% in 2020 and 65% of the IPO market this year. Why are SPACs relevant to private equity deployment challenges? Unlike private equity funds, which have up to seven years to deploy capital, most SPACs have to complete their acquisition in 18 months or must return the money back to investors. The promotors of SPACs, who generally have the most to gain from the transactions, are loath to return money to investors and are therefore routinely outbidding everyone else in the market. Bloomberg recently categorized this as a risk that the SPAC promoters “might agree to disastrously overpay for a company”. The SPAC speculation hit a level in the first quarter of this year where global PE firms from TPG and Riverstone to even Softbank have started their own SPACs with primarily retail investor funds, as opposed to their own funds’ investor capital. The viability of SPACs is open for debate and the post-acquisition stock price gains and losses will dictate if SPACs are here to stay or a short-term fad. mea-finance.com

ROUNDTABLE EVENT

The frictionless future for payments

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On 16th of June, 2021, senior bankers and top executives from leading financial institutions gathered for the MEA Finance and Volante Technologies Roundtable in Dubai to discuss the emergence of new technologies and how evolving customer needs are driving major innovations in the payments industry while offering financial institutions a window to be more innovative and efficient in delivering service

lobally, payments remain among the best-performing financial services product segments but unfortunately for banks – traditionally the main providers of payments services – this momentum is no longer extending to most of them especially under the current operating conditions. Non-banking players including e-commerce firms, fintechs, merchants and social media platforms now offer instant payment solutions, a trend that is disrupting and driving rapid changes in the sector. For banks to maintain a competitive edge in the payment ecosystem, McKinsey said, “Success will depend on thoughtfully assessing capabilities, determining the role of payments in market strategies, and appropriately aligning payments operations to achieve the required performance improvements.” Although the prolonged COVID-19 pandemic has put the world economy on an uncertain footing and is presenting a set of unprecedented challenges to the financial services sector, it also accelerated and strengthened the adoption of instant payment solutions, a trend that was is also gaining momentum across the GCC region. The GCC region’s digital payments volumes have soared since the pandemic hit, reportedly generating as much as 10

years’ worth of growth across B2C, B2B, and P2P spaces in just over 12 months. Industry experts from different financial institutions and payments solutions providers gathered for Volante Technologies and ME A Finance Roundtable themed Future of Payments – The Winning Strategy in Dubai to gain insight into the evolving payments sector and how financial services providers can leverage cloud, payment infrastructure, data and Open Banking to broaden their payments services. US-based Volante Technologies is a cloud payments and financial messaging solutions provider helping more than 100 banks, financial institutions, market infrastructures, clearinghouses and corporate treasuries to accelerate their digital transformation. The company counts Citibank, Qatar Islamic Bank UK, BNY Mellon, Bank Leumi UK and FIMBank among its customers. The changes in the global payments sector are being driven by the growth in e-commerce as the pandemic is pushing more shoppers online, evolving customer preferences and demands among the young tech-savvy customer base and the understandable fear that cash might be a possible vector of the virus. In the Middle East region, the growth of the payments industry can also be attributed to regional governments’ mea-finance.com

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support that is seeing banks leveraging these adoption rates to advance their digital transformation strategies. Though outsourcing of the full payments stack is a possibility, a new generation of instant payments and financial messaging solutions providers are emerging allowing financial institutions to swiftly expand their footprint while modernizing their payments product portfolio without incurring high upfront investment. Payments-as-a-service (PaaS) players operate cutting-edge cloud-based platforms to provide specialized services, such as card issuing, payments clearing, cross-border payments, disbursements and e-commerce gateways, said McKinsey. As instant payments are significantly enhancing the speed of settling payments (the making and receiving of a payment), Boston Consulting Group and Swift expect the global payments sectors’ revenue to hit the $1.8 trillion mark in 2024, from $1.5 trillion in 2019, buoyed by sustained growth in e-commerce and electronic transactions and greater innovation.

Fostering growth The MENA region payments market is expected to register an annual growth rate of 6.5% between 2020 and 2025, according to ResearchAndMarkets. com. The outbreak of the pandemic and its economic fallout has undoubtedly

accelerated a string of existing trends in both consumer and business behaviors while introducing new developments that saw the use of instant payment methods surpassing the use of cash and debit cards in the Gulf region. The million-dollar question becomes how PaaS in the cloud is disrupting the payment ecosystem and is PaaS the answer to the Middle East region’s evolving payments sector? The emergence of new technologies and the evolving customer requirements have driven major innovations in the

FOR REGIONAL BANKS, I THINK THE BALANCE IS THERE AND THE COMPETITION FROM NEW ENTRANTS IS WELCOME BECAUSE IT IS FORCING MORE INCUMBENT BANKS TO FRANKLY WAKE UP AND CONSIDER THESE FORWARD-LOOKING STRATEGIES AND BE A BIT MORE AGILE – David Aldred

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payments industry. It is also offering financial institutions a window to be more innovative and efficient in delivering services. Deloitte said that it normally takes one business day between the time when the payer dispatches the payment instruction and the time the recipient will be able to re-use the transferred amount of money. However, with cloud and PaaS this will happen in real-time, all year around the clock, with the funds being available immediately for use by the recipient. Prasad Mopidevi, the Chief Technology Officer at Commercial Bank of Dubai, said, “Payments as we know, no longer have the traditional definition and that calls for the requirement to change and support a world that requires 24/7 social media kind of facilities”. Mopidevi highlighted that the upscaling of the payments ecosystem should not be just on the customer and retail side, but also on the institutional side of things where it involves players in the payments sector such as financial institutions and regulators, though it comes with its share of challenges.

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Ajayi Singh Pundir, Director, Global Industry & Regulatory Affairs, Business Development, Middle East and Africa at Volante Technologies, said that the way the payments industry has evolved is a collaboration of what an institution can do beyond considering deploying software and how a firm can deploy an ecosystem around that software. “There are hundreds of fintechs offering hundreds of value-added services to financial services providers out there. Bringing these together is one of the best ways of ensuring that as an ecosystem, the payments sector combines what these firms have to offer and provides that value to the

in real-time and in a swift manner,” said Yazbeck. To maintain a competitive edge in a crowded market or adapt to changing operating environment , payment services providers across the GCC should understand the expectations and requirements of their customer base. Accenture said that as the payments market is evolving, customer experience is becoming the prime competitive differentiator. Alaa Al Rousan, Senior Account Director at SWIFT, said that with the increasing need for companies to meet customers’ expectations while providing intuitive, seamless, responsive and

n ew s e r v i c e s a n d n ew m a r ket s faster while leveraging collaboration with fintechs. David Aldred, Managing Director Treasury and Trade Solutions Business Head, MENA & Pakistan at Citi, said that the developments in the payments sector are taking place at a faster pace, which is exciting, but also keeps banking executives awake at night wondering what is the best step into the future? “For regional banks, I think the balance is there and the competition from new entrants is welcome because it is forcing more incumbent banks to frankly wake up and consider these

end customer or the macroeconomy”, said Pundir. Naim Yazbeck, Regional Director, Enterprise and Partner Group (EPG) at Microsoft Gulf, weighed in saying that as someone who works for one of the world’s biggest cloud technology providers, banks and fintechs can leverage cloud solutions to enhance their digital payments services. “The payments ecosystem is not only about how a payment process is performed but also how the cloud can bring large amounts of data combined with the payments service so that companies can make informed decisions

efficient services, the payments sector is now a warzone – financial institutions are looking for more volumes to justify reducing the cost and the possibility to make the operating cost more efficient from their perspective. Financial institutions that have the volume that justifies building infrastructure such as investing in the cloud and collaborating with financial technology solutions providers such as Volante are doing it with ease, but it’s a different story for small firms that have a small customer base. PaaS in the cloud is expected to assist financial institutions to launch

forward-looking strategies, and be a bit more agile,” said Aldred.

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Leveraging the cloud As the demands from digitally savvy corporate and consumer customers i n c re a s e a m i d c o m p et i t i o n a n d i n c re a s e d re g u l a t i o n , f i n a n c i a l services providers are being forced to fundamentally calibrate their operating and business models. IBM said, “Beyond cost reduction and scalability, speed to market is perceived as the major benefit by cloud users.” Afzal Khanani, Head of Strategy & Transformation at Abu Dhabi Islamic Bank,

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THE PAYMENTS ECOSYSTEM IS NOT ONLY ABOUT HOW A PAYMENT PROCESS IS PERFORMED BUT ALSO HOW THE CLOUD CAN BRING LARGE AMOUNTS OF DATA COMBINED WITH THE PAYMENTS SERVICE SO THAT COMPANIES CAN MAKE INFORMED DECISIONS IN REAL-TIME AND IN A SWIFT MANNER – Naim Yazbeck

said, “PaaS in the cloud is an enabler, and it will support financial service providers to reduce operational cost while maintaining a competitive edge in a crowded market.” Cloud computing offers a dynamic platform to develop, trial and offer innovative services—driving operating and business model transformation. According to Volante, PaaS in the cloud offers resiliency, is cost-effective and accelerates customer onboarding, allowing organizations to focus their operating and business models while meeting customers’ demands. Onur Ozan, Regional Head - Middle East, North Africa and Turkey at SWIFT

said given that financial institutions are often chasing after regulation and innovation to cope up with the changes, PaaS in the cloud allows financial services providers to offload some complexities to outsourcing. Saurabh Jain, Head of Digital Wallets and New Payment Initiatives at Mashreq Bank, said, “PaaS in the cloud seems the right solution in the current operating environment amid the complexity of the payment ecosystem and changing customer requirements. However, this approach becomes much more complex when it comes to large financial services providers and legacy

financial institutions because they have invested so much in their legacy infrastructure which hosts the majority of current backup services. Moving all these systems to the cloud poses bigger and multi-dimensional challenges to large banks.” Jain said that banks should have a balancing act in place to manage the investment in the existing infrastructure as they transition to new solutions that are aimed at advancing service delivery. Managing both seamlessly, assumes a much larger challenge for the financial service providers, he added. With several cloud solution providers expanding their presence in the Middle

East, financial institutions are tapping into the cloud to boost operational efficiency while improving their ability to partner, source, and collaborate with fintechs. “Now for the banks, you must know, there are two ways to do business. One is that we keep continuing the way we are doing today and then within another five or 10 years we’ll be out of business, or we need to open up and probably the cloud is the best way to open up, where you have open APIs, where you can have a participative type of partnership with all the other players which are small or big within the payments ecosystem,” Salim mea-finance.com

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Awan, Managing Director - Institutional Pa y m e nts S o l u t i o n s a t M a g n a t i weighed in. Banks are also leveraging the cloud to significantly expand their customer value proposition and geographic footprint while changing their role within an industry or even tap into a different industry. “The higher the intensity of cloud adoption in the financial service sector, the greater the benefits will be,” said IBM. It is no surprise that most disruptors in the financial service began their journey in the cloud and benefit from low entry costs, scalability and speed to market from the abundance of plug and play composable components available to incorporate into their offerings within and across clouds. Digital payments professionals and bankers who attended the MEA Finance and Volante roundtable underscored that the shift to cloud computing in the financial service sector is inevitable and can be the key to maintain a competitive advantage in a market such as the GCC region. There are three areas where the cloud has been driving innovation in the payments sector and these include high data security, cost-effectiveness on the part of banks and as an enabler of innovation as banks keep on introducing new services and products to maintain their market position and meet customers’ evolving demands and expectations.

Regulations The expansion of the tech innovations in the financial service sector is introducing a new set of security risks and challenges that requires a review of the security infrastructure that is currently in use. Since the outbreak of the pandemic, there has been a surge in cyber-attacks and malicious hacking cases. However, just like any financial technology, instant payments are not immune to mobile security and data privacy risks. Accenture said that though the cloud’s efficiency in terms of time

and money is its most popular feature, organizations are realizing that cutting corners on the cloud can render their organizational processes opaque, opening a plethora of discreet entry points for cybercriminals. “ Pa y m e nts i s a ve r y c o m p l ex ecosystem, and it is fragmented as well, yes expectations from customers are high, but regulation is also dominating a n d c h a n g i n g t h i s e c o sy ste m ,” said Ozan. Ozan said that financial institutions are operating under significant pressure

box is no longer to leave a country or certain jurisdiction, said Puri. “With PaaS in the cloud, financial services providers are outsourcing services to other companies that are fintechs and aggregators instead of them doing the work or processes themselves,” said Puri. Ozan said that there is significant regulation happening in the payments sector, whether it is Open Banking, Payment Services Directive (PSD) the scheme in the UK, or what Middle East region regulators are working on.

PAYMENTS-AS-A-SERVICE PLAYERS OPERATE CUTTING-EDGE CLOUD-BASED PLATFORMS TO PROVIDE SPECIALIZED SERVICES, SUCH AS CARD ISSUING, PAYMENTS CLEARING, CROSS-BORDER PAYMENTS, DISBURSEMENTS AND E-COMMERCE GATEWAYS – McKinsey

in a bid to meet customer demands and expectations, regulatory requirements, keeping up with changes in technology among other forces. The explosion in digital payment options together with skyrocketing adoption across the Middle East region was met with an increase in cybercriminal activity as hackers are becoming more sophisticated and aggressive, making occasional headlines by stealing customer data. Vivek Puri, Sales Director - the Middle East at Volante Technologies, said that the cloud is one of the best innovations of the century and it is being used by almost everyone through a remotely accessible server. With the cloud, the only thing that has happened is the box that used to be stored in a company’s IT Department is now located miles and with the current regulations, that small

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Drawing an example from the payments infrastructures already available in the GCC region such as Buna, Ozan highlighted that all these regulatory-driven initiatives are leaving a strong footprint in the payments sector, adding, “there is a lot of catching up to be done by the bankers.” Hence in this context, looking at regulation from a payments perspective instead of the financial sector shows that PaaS in the cloud has a significant role to play. Pundir concurred with Ozan, saying there is a bit of catch-up to be done by regional banks, payment solutions companies or payment services such as Buna. Several changes that are currently being witnessed in the payments industry are being driven by technological disruption not necessarily regulatory. For Pundir, regulation is one aspect of that change that is taking place in the

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ecosystem and the major development that needs to be tackled is technological change with regulations. The move is expected to enable financial institutions to unbundle what they thought were the right products on offer, or service they expected to bring in revenues. by joining forces with other corporates and fintechs while acquiring the right technologies to advance services delivery. Awan weighed in saying that following the outbreak of the pandemic there has been a surge in the adoption of instant digital payment services and people in the Gulf region and entire Middle East region are using various wallets to settle payments. Regional countries are also digitalizing payments for governments services and the trend is expected to ease regulations. Kartik Taneja, Executive VP, Head of Payments/General Manager - Idfaa payments at Mashreq Bank, said that regulation is helping the financial service sector and financial watchdogs must be more reflective of the advantages of

PAYMENTS AS WE KNOW, NO LONGER HAVE THE TRADITIONAL DEFINITION AND THAT CALLS FOR THE REQUIREMENT TO CHANGE AND SUPPORT A WORLD THAT REQUIRES 24/7 SOCIAL MEDIA KIND OF FACILITIES – Prasad Mopidevi

the measures they are implementing in the industry. “And in particular, I find a lot of PSD is extremely regressive towards innovation. When you regulate some form when you regulate margins, right? What happens is that there is an arbitrage which is created with every regulation, that there’s a possibility of an unintended consequence,” added Taneja. Ali Imran, Head of Transaction Banking & Wholesale Digital Services, Commercial Bank of Dubai, also weighed in on regulation in the payments sector saying regulation is twofold, one is the consumer protection part and the other innovation – these go hand in hand. Nzaar Ihsan, Senior Vice President Business Manager Cards at Mashreq, said, “I think some discontented banks will continue to control everything, I think that’s the issue, we will not wake up one day and our lanes will have been bypassed, our regulation would have been bypassed, then the regulations will evolve to legitimize what is happening.” mea-finance.com

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Awa n a l s o e c h o e d t h e s a m e sentiments, saying financial watchdogs are being forced to adapt to the innovations in the financial services sector and on their own they will not liberate the market unless a certain development pushes them. Awan identified the market, consumer needs and expectations and cost as the three elements that are driving innovation in the financial services industry and not the regulators.

Enabling environment In March, Buna – the cross-border and multi-currency payment system owned by the Arab Monetary Fund, said that it is considering launching instant payments at a later stage, in addition to trade finance solutions, securities settlement and ATM/ POS processing service. The move is expected to complement Buna’s current offering of multi-currency crossborder interbank payments, commercial payments and consumer remittances. Khanani said that the overall dynamics of the payments industry have changed – the efficiency is the game, cheaper infrastructure is a need and the banking sector is being confronted by a lot of external forces including competition from new non-banking entrants, regulatory requirements and evolving customers’ requirements. With its messaging platform, products and services in use by over 11,000 banking and securities organizations and corporate customers globally, SWIFT offers products and services to facilitate access and integration, identification, analysis and regulatory compliance. The relationship between financial institutions and payment solution providers is no longer about competition but is now about collaboration through adopting cutting-edge technology services to meet customer needs and expectations. Aldred said that traditional bank’s viewed fintechs initially as competitors, but these new non-banking entrants have become clients and partners to the

financial services sector, adding that who would think incumbent banks such as Goldman Sachs would venture into the payments industry and go as far as tapping into the cloud and APIs, and ignore the legacy technology that has been in use in the sector for decades. Several regional lenders are leading or participating in several accelerators, incubators and training programs to advance access to instant payment technologies and enhance service delivery. For fintechs and startups, such partnerships provide easy access to resources, data, funding, space and

region can be considered as a battle to achieve competitive advantages using precise strategies to obtain favorable positions. “The requirements of new customer demographics have also changed, and their expectations are clear – if I click a button a payment is settled, if I put a card or my mobile phone near a wireless POS terminal a contactless payment has been initiated. So, there are too many things happening at this point and fintechs are playing a crucial role,” said Khanani. Sameer Nemazie, Director, Transaction Banking at Standard Chartered Bank,

THE REQUIREMENTS OF NEW CUSTOMER DEMOGRAPHICS HAVE CHANGED, AND THEIR EXPECTATIONS ARE CLEAR – IF I CLICK A BUTTON A PAYMENT IS SETTLED, IF I PUT A CARD OR MY MOBILE PHONE NEAR A WIRELESS POS TERMINAL, A CONTACTLESS PAYMENT HAS BEEN INITIATED. SO, THERE ARE TOO MANY THINGS HAPPENING AT THIS POINT AND FINTECHS ARE PLAYING A CRUCIAL ROLE – Afzal Khanani

networking opportunities to test and showcase their prototypes. The partnership between PaaS in the cloud solutions providers and banks is crucial for the financial sector because it allows players in the industry to calibrate their business models while enabling them to bundle some of the solutions available on the market to meet customers’ demands, whether it be embedded banking, lending, working capital and data solutions, said Aldred. The competition between instant payment services providers in the GCC

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posed a question, “How do you incentivize someone to use your products?” Nemazie said that an institution could implement a scheme allowing for the payment of for example $5 or $10, every time a sale is done. He added that “It’s about trying to bring in some of those schemes back into the payments ecosystem and making it easier or making it more trustworthy for someone to say, Okay, I see value in terms of what I’m doing or what I’m selling.” Awan joined in saying several fintechs that opened their doors for business in the last decade have grown bigger,

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dwarfing some financial institutions in terms of their size, services and products they offer as well as the regions they cover. This is because these companies, mostly startups, are open to adaptability, they are agile, have created partnerships across the value chain and accept the current challenging market trends.

Embracing the new technology Although the banks in the Middle East have made significant progress in their digital transformation journey compared to their peers in other financial centers such as Hong Kong and London, the fact that payments represent the most frequent touchpoints between financial institutions and their clients makes digital investment in the sector more important than ever. Houssam Chaker, Regional Sales Head at Volante Technologies, said that instant payment is a revolution going on around the world, and regionally it is already in full swing in Saudi Arabia and Bahrain and its coming to the UAE big time.

“The big definition of instant payment today is if you see for instance what’s happening because of the COVID-19 pandemic, is that we all have big pressure on cash management and cash flow management,” said Chaker. Chaker noted that instant payments are also based on size and quantity too and a lot of data is attached to these payments, hence there will be two payments using an instant payment and can attach invoices to accompany the payments. McKinsey has said that carving out the payments business allows a more flexible approach to growth while also establishing a currency that makes subsequent consolidation possible, as car ve - outs can tap into the higher valuation afforded payments companies. Treating payments as a stand-alone entity for example in the case of Emirates NBD’s Network International and First Abu Dhabi Bank’s Magnati allows for the expansion of services across the

financial services sector and opens the service to a broader array of customers, thereby driving scale and improving profitability. Murali Krishna, Associate Vice President, FX -Products, Emirates NDB, said that the Middle East financial service market should probably take a leaf from North America, where PaaS in the cloud solutions are being developed so that the integration process becomes plug and play for banks. Krishna also highlighted that one of the common issues that usually affect financial institutions is the amount of time it takes to onboard customers to the new service. “By building the connectivity with fintechs and cloud aggregators, our ability to connect one time to the cloud, and then allow customers to come in and plug and play with equal labor and infrastructure will be a game-changer that the clients would want,” said Krishna. The advancement in the Middle East payments industry is being driven by a shift in consumers and businesses mea-finance.com

ROUNDTABLE EVENT

behavior towards e-commerce platforms and associated services, and support from regional governments making it imperative for banks to provide frictionless payments solutions. It is also opening the door to new entrants such as fintechs, global retail giants as well as card networks and neobanks. Tushar Gaur, Sales Director, Middle East, and North Africa at Volante Technologies said instant payment services were brought into existence from the cash surplus economies. “From an end-consumer perspective and using instant payment service as an option, I can also benefit from the service not just in terms of the convenience it offers,” said Gaur adding that if a consumer has an option of using instant payment at any point in time, they can manage the cash they have. “On the contrary, from an institutional point for view, I know the amount I have, and I can manage that, I can do an instant payment and on the other side, the corporate or vendor receiving the payment is satisfied and I can save as well in the process,” he added. G u l f re g i o n c o u nt r i es a re spearheading different digital payments initiatives such as Oman’s Mobile Payments Clearing and Settlement System, UAE’s e-Dirham, DubaiPay, BenefitPay in Bahrain and Saudi Arabia’s Sarie – all of which are meant to enable service providers and government entities to offer payment facilities around the clock.

BY BUILDING THE CONNECTIVITY WITH FINTECHS AND CLOUD AGGREGATORS, OUR ABILITY TO CONNECT ONE TIME TO THE CLOUD, AND THEN ALLOW CUSTOMERS TO COME IN AND PLUG AND PLAY WITH EQUAL LABOUR AND INFRASTRUCTURE WILL BE A GAME-CHANGER THAT THE CLIENTS WOULD WANT – Murali Krishna

Nemazie said that in terms of resources and the operating environment, we should appreciate efforts by banks and countries in the Middle East to drive innovation as regional governments are pushing towards cashless economies. This is the point where regulatory support for innovation is coming in. However, banks are also expected to continue to be vigilant about their choice of fintechs to partner with and the type of controls do they have in place, and that is probably going to be a slowdown, added Nemazie. The growth of instant payments services in the region is also driven by their popularity among small businesses and start-ups. Instant payment is expected to revolutionize the payments sector and its application into the retail industry, standard B2B transactions and the entire trade sector is projected to potentially disrupt

Banking and Finance news in the MEA market

the market in terms of how business is currently being conducted. The Volante Technologies and MEA Finance Roundtable was attended by representatives of several financial institutions in the UAE including Afzal Khanani from ADIB, David Aldred from Citi, Prasad Mopidevi and Ali Imran from Commercial Bank of Dubai, Murali Krishna from Emirates NBD, Salim Awan from Magnati, Kartik Taneja, Nzaar Ihsan and Saurabh Jain from Mashreq and Sameer Nemazie from Standard Chartered Bank. Also, on the panel of speakers were Naim Yazbeck from Microsoft as well as Onur Ozan and Alaa AlRousan from SWIFT, the world’s largest interbank electronic payments messaging system. At the roundtable panel representing Volante Technologies were Houssam Chaker, Vivek Puri, Tushar Guar and Ajay Singh Pundir.

COVER INTERVIEW

Leading inclusive innovation

Rola Abu Manneh, CEO of Standard Chartered Bank, UAE

Rola Abu Manneh CEO of Standard Chartered Bank, UAE, outlines why it is important to lift participation of women in our societies, telling MEA Finance that through proactive actions to create inclusiveness of opportunity, such as their Women in Technology (WiT) Incubators programme, and by focusing on sustainable finance and economic growth strategies, we can overcome COVID-19’s setbacks and be better placed to face the challenges and the opportunities of the post-pandemic era

Banking and Finance news in the MEA market

ou have been the CEO of Standard Chartered Bank UAE for exactly three years, during which time disruption, competition and Covid-19 all came to a head. Have these been the three most challenging years ever for banking and finance? Over the course of my career, I have been for tunate enough to make meaningful contributions to the industry and community in both a personal and professional capacity. Since I joined the bank three years ago, these experiences and challenges have allowed me to contribute to the development of Standard Chartered in the UAE. The onset of the COVID-19 pandemic has changed our ways of working and living and brought unprecedented challenges, like we have never experienced before,

to virtually every sector. Banking is certainly no exception. If it has taught us anything, it is the importance of compassion within the business sphere. While a crisis’ early days might seem like the time for leaders to put their head down and exhibit control, it was just as critical to showcase a degree of emotional intelligence and ensure employees and colleagues are able to grapple with their own reactions. Although the past year has been a testing period across the industry, it has also provided us valuable opportunities. The evolution of the bank during this pandemic has set us up for our future. We changed the way we worked, the way we communicated and accelerated our product offerings to adapt to the new world. This year onwards, we want to keep pushing this strategy forward. We will continue to innovate and continue to communicate with our clients to ensure we are meeting their needs in a timely manner. We know that the COVID-19 has caused a significant shift in the banking sector and has accelerated the drive towards digital adoption. We are proud of the digital transformation we have undergone – especially here in the UAE, and it is great to see our hard work come to fruition. Moving forward, we will continue to place priority on developing that work even further as we enter the new normal.

You are among a growing number of female bank CEOs in the UAE and the wider world. How long overdue is this in finance and how different would the world of banking be if it had happened several generations earlier? Gender equality has been in the headlines, and in our hearts, for decades. Whether at home or the office, we have seen women fighting for their right to be heard, to be included, and to have equal opportunity. Despite significant progress in this regard, we have hit a bump in the road to equality due to the pandemic, which has hindered the ability for women

globally to progress in their workforces, effectively erasing years of reform aimed at ensuring equal opportunity and gender parity in the corporate sector. In the banking sector particularly, women had to fight for a seat at the table for decades. Historically, C-suite roles were held by men and if women were given a fair opportunity, then, we wouldn’t be advocating for equality today. This is why it is imperative for women in leadership today to support the younger generation and be a voice of inspiration for them. Every woman may be subject to gender inequality as she embarks on her journey to seniority. Despite these obstacles, we should continue to approach work with a high degree of confidence and push ahead. Through courage, conviction, dedication and commitment, anyone

amount of bravery. I found that shattering the metaphoric glass ceiling, one that can sometimes deter women from the corporate environment altogether, was a task that brought with it a considerable amount of uncertainty, as well as some excitement. Being able to maintain this level of bravery and unwavering determination has ultimately led me to the role I’m in today.

What more can be done to lift the participation of women in our societies? It’s no secret that the financial industry is a traditionally male-dominated field and, despite our undeniable progress, a 20 percent representation of women on executive committees and 23 percent on boards is not enough. There is still a long way to go to create an industry

THROUGH COURAGE, CONVICTION, DEDICATION AND COMMITMENT, ANYONE IS CAPABLE OF NAVIGATING THEIR WAY TO CORPORATE SUCCESS – Rola Abu Manneh

is capable of navigating their way to corporate success. I know that there is still a long way to go to create an industry in which women have equal access to opportunity and positive outcomes. However, my experience as a citizen of this country and a CEO of one of Standard Chartered’s key markets for the Group is a testament to the industry’s growth and enhancement to a more equitable field for both men and women. This also demonstrates the great wok the UAE and its leaders are doing to lead the way in this domain acting like a beacon for other nations in the region to follow. Looking at the banking sector, specifically, even the decision to be part of the industry took a significant

in which women have equal access to opportunity and positive outcomes. Government authorities must be held responsible for creating inclusive and progressive frameworks that enforce measures that foster gender equality in the workplace. In this sense, I am proud to say that the UAE is paving the way. However, corporations must also be held accountable for developing a gender diverse and equally opportune workplace. It’s not just about employing women, but also encouraging them to progress and supporting their success. A key area of opportunity for women is in digital and technology. As we become an increasingly digital society, we can expect that new technology will continue mea-finance.com

COVER INTERVIEW

to enter the market and create new jobs and, therefore, require new skills. Likewise, technological platforms will enable women access to various vocational opportunities, as well as access to valuable SME and entrepreneurial markets. A great way to leverage the rise in technology is by equipping women with the necessary tools and resources needed to excel through training and education programmes. Standard Chartered is championing initiatives in this capacity, such as the Women in Tech and Goal programmes. These initiatives aim to educate women of all ages to

adapt to the changing technological advancements and leverage them in their professions.

In the post-pandemic world, e c o n o m i c re c ove r y i n t h e region will depend heavily on entrepreneurial activity. Will ensuring greater inclusiveness in entrepreneurship boost economic success and are banks actively encouraging this? At Standard Chartered, we recognise the importance of entrepreneurial activity in the economic growth in the region.

Banking and Finance news in the MEA market

Globally, nine out of ten new jobs are created by small businesses and nearly 3.3 million new jobs are needed every month in emerging markets by 2030 to absorb the growing workforce. Entrepreneurs will always seek more knowledge of basic financial management tools. Relying on their past trial and errors, or their experience of family entrepreneurship won’t suffice. Lifting the par ticipation through improved financial knowledge can provide entrepreneurs with the skills they need to grow their businesses and contribute to local economic development. Additionally, governments a n d re g u l a to rs a re i n c re a s i n g l y focusing on the role banks play in supporting those businesses to grow and furthering financial inclusion and education. At Standard Chartered, we have launched our Women in Technology (WiT) Incubators to support female tech entrepreneurs and to respond to calls for greater diversity in technology and opportunities for women to further develop leadership expertise. The WiT Incubators target femalel e d e n t re p re n e u r i a l te a m s a n d provide training, mentorship and seed funding. There is an annual open call for participation leading to a final selection of top contestants (ranging from 5 to 20 businesses) with the most compelling ideas. In the UAE, Standard Chartered introduced this programme, the 2020 edition of which has adapted its curriculum to give its third cohort of startups the tools they need to navigate the unprecedented challenges incited by the COVID-19 pandemic through various learning modules and expert resources. The unique experience-based accelerator follows a blended model where startups are immersed in one of the region’s most vibrant investment hubs during the Dubai bootcamp, complemented with virtual support before and after conducted remotely in their home countries. The three top-performing startups will be awarded a total of $30,000 in equity-free

prize money following the completion of the programme. Set to begin operations later this September, the upscaled Women In Tech programme is geared towards empowering female entrepreneurs to confront the challenges of uncertain times as they grow their impact-driven businesses across the AME region.

In your opinion, what are some of the most significant challenges the industry needs to overcome in order to thrive in the future? In the past year, the banking industry h a s e m ba r ked o n a n i nnova ti o n renaissance. Digitisation is a key area of focus for the region, and we know that the COVID-19 crisis has caused a significant shift in the banking sector and has accelerated the drive towards digital adoption. Insights derived from my own bank’s Road to Resilient Growth – which is a series of action-oriented insights aimed at helping businesses build resilience – indicates that digital transformation is no longer an option but an imperative. While traditional banks still dominate across the region, it has become increasingly clear that relying on existing tools and customer bases will not be enough to preserve and gain market share. There is great opportunity in traditional banks identifying their place on the digital banking spectrum; be it through FI-Fintech partnerships, Banking as A Platform, AI or blockchain, to formulate a clear strategy and subsequently innovate, integrate and accelerate into the future. In regions such as the GCC, with a population encompassing mostly young and tech-savvy individuals, digital banking is gaining popularity amongst customers who would prefer an electronic service rather than visiting a physical bank. Hence, in order to thrive in the future, organisational and structural challenges need to be addressed. Banks will need to assess the evolving customer needs and identify a clear strategy in order to implement a

robust digital transformation. Outdated o rg a n i s a t i o n a l st r u c t u re s , r i g i d processes and working methods can all impede digital transformation success. This was never more apparent than in 2020 when companies struggled to shift to a remote business model.

How is Standard Chartered championing sustainability? What are some key initiatives you have been leading in the UAE? We have all seen the urgency for global economies to move towards a sustainable recovery. What we are seeing across the region is both regulators and government authorities have started a series of nationwide sustainability initiatives aimed at reversing the consequences of climate change and have called on institutions to act as champions. Across all our markets, Standard Chartered is committed to Accelerating Zero while promoting sustainable finance and supporting sustainable economic growth, expanding renewables financing and investing in sustainable infrastructure where it is needed most. GCC economies, particularly the UAE and Saudi Arabia, are heavily moving towards diversifying their energy mix

by investing in renewables including solar and waste to energy. Solar energy has continued to grow in the region since Masdar inaugurated what was the world’s largest concentrated solar power (CSP) plant at the time – Shams Solar Power Plant – in 2013. The plant, which remains one of the world’s biggest CSP projects, has paved the way for additional renewable energy capacity in the UAE, most notably with the recent development of the Mohammed bin Rashid Al Maktoum Solar Park in Dubai and the completion of the Noor Abu Dhabi solar power project. The Bank was mandated as the lead arranger of Noor Energy 1 of the Mohammed bin Rashid Al Maktoum (MBR) Solar Park and provided $4.32 billion in financing to fund this monumental project, playing an integral role in its impending completion. Earlier this year, we were also involved in financing the $1.2 billion waste to energy project by Dubai Holding-led consortium to build one of the largest energy-from-waste facilities in Dubai. Banks like Standard Chartered have the ability and potential to connect, provide know-how and support economies to make tremendous progress towards achieving sustainability and meeting the SDG targets by 2030. Most recently, we have launched a new study that reveals that multinational companies will cut suppliers for failing to curb carbon emissions, with 78 percent of multinationals (MNCs) planning to remove suppliers that endanger their carbon transition plan by 2025. For UAEbased suppliers who fail to transition alongside their MNC partners, this could mean a loss in export revenue of $119.6 billion. Utilising our position as a leading global bank with a prime commitment to sustainable development, our goal is to continue to work closely with our partners in the private and public sectors to put into place effective systems and regulations that will drive the UAE’s sustainability leadership and achieve net-zero. mea-finance.com

DATA SECURITY BANKING TECHNOLOGY

BANKING TECHNOLOGY INNOVATION ENABLERS

Empowering Digitalization The relationship between banks, vendors and fintechs is no longer about competition but is now about collaboration through adopting cutting-edge technology services to deliver best-in-class services and products

ore than a year and a half into the pandemic, several executives in the Middle East banking sector 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. In the GCC region, the quest to meet customers’ demands and expectations while maintaining a competitive edge

in an overcrowded market had already paved way for digitalization well before the pandemic hit. The financial services sector has a rather traditional outlook and takes time to adapt to change and innovation, but coronavirus has created a different narrative. T h e p ro l o n g e d p a n d e m i c i s accelerating a perceptible shift in the financial services sector by necessitating a quick transition from physical to digital. It is at this stage that the fintech industry

Banking and Finance news in the MEA market

has risen to the occasion to arm financial institutions with digitization initiatives into the new normal. The relationship between banks, vendors and fintech firms is no longer about competition but is now about collaboration through adopting cuttingedge technology services to deliver bestin-class services and products. Financial institutions are also leading or participating in several accelerators, incubators and training programs to

get early access to technology and talent without taking any significant stake in the fintech companies. These types of collaborations are a valuable addition to the internal innovation programs of the financial institutions that seek to increase and maintain their customer relevance. Deloitte said that leaders across the banking industry agree that digital transformation and customer-centricity go hand in hand. For banks, the digital transformation journey stretches from digital channels such as mobile banking, digital payments to the company-wide digitalization of employee working models, smart branches, data management methods and risk control strategies. Though the application of disruptive technology is nothing new to the financial services industry it has been under the spotlight in recent years as advances in machine learning (ML) and artificial intelligence (AI), as well as new business models, are challenging existing products, services and processes while enabling faster, intuitive and more engaging solutions to be created. As legitimate players of an emerging banking ecosystem, fintechs are deploying digital onboarding solutions, Open Banking enabled solutions, cloud solutions and advancing digital payment services. According to EY, the growth of the industry has strengthened the common belief that fintech will disrupt banking, but collaboration – not competition – will be the primary driver of disruption. Digital onboarding The implementation of an automated customer onboarding process is an essential feature that determines whether or not a financial institution can obtain new customers. Globally, around 12% of banking customers tend to change from one bank to the other annually and in that regard, it should be noted that retaining a customer is easy but acquiring new customers is difficult for all types of banks.

Deloitte said that an automated onboarding process is a mutually beneficial situation offering speed, efficiency and convenience for the customers and freeing bankers for more value-added tasks. Customer onboarding is the first contact that a new user has with the bank and the process should be intuitive, seamless, responsive and efficient. It is defined as the guidance of customers in the first steps of platform accessibility and a critical step in a customer’s journey with a financial institution as it leaves a

data) and external (e.g. mobile app, social media). • Innovative – products and services offered through the building of strategic partnerships with nonfinancial services players to enhance user experience. Open banking Open Banking is a connected ecosystem of financial services that allows two or more unaffiliated banks to enrich their digital offerings safely and securely, bringing greater financial transparency and new and tailored customer services

THE LEADING PUBLIC CLOUD PROVIDERS OFFER AN ARRAY OF INNOVATIVE PRODUCTS-AS-A-SERVICE THAT CAN BE ACCESSED ON THEIR PLATFORMS AND HELP BANKS IMPLEMENT BUSINESS AND OPERATING MODELS TO IMPROVE REVENUE GENERATION, INCREASE CUSTOMER INSIGHTS, CONTAIN COSTS, DELIVER MARKET-RELEVANT PRODUCTS QUICKLY AND EFFICIENTLY, AND HELP MONETIZE ENTERPRISE DATA ASSETS – Deloitte

long-lasting impression in the clients’ minds about how they perceive a financial institution. KPMG said that banks should adopt three approaches to their digital onboarding process: • Protect – which entails the development of in-house processes and standards to ensure compliance with jurisdictional requirements in terms of data privacy and API guidelines. • Compete – that is investing in strategic enablers both in-house and externally including internal data usage (e.g. unstructured, big

to the region. KPMG said, “Whilst open banking could be of great benefit to customers, it may also result in hurdles in some areas, for example, cybersecurity, c h a n g i n g b u s i n es s m o d e l s , a n d regulatory oversight. The Middle East region is unarguably mature when it comes to regulators’ preparedness for Open Banking compared to other international financial hubs in Europe and Southeast Asia, though there are some challenges such as an outdated regulatory framework. Bahrain unveiled the Bahrain Open Banking Framework in October 2020. The framework provides a holistic definition of mea-finance.com mea-finance.com

DATA SECURITY BANKING TECHNOLOGY

the country’s Open Banking regulation, guidelines, technical standards for Open Application Programming Interfaces (API) platforms, security standards (including data privacy), and overall governance. The UAE central bank recently announced plans to open a FinTech Office to support financial innovation in the country while the Abu Dhabi Global Market proved its unwavering support towards the Open Banking revolution having awarded its first digital-exclusive banking license and Category 1 status to Anglo-Gulf Trade Bank in September 2019. Saudi Arabia, the Arab world’s biggest economy, introduced its Open Banking framework earlier in January 2021. The move by the Gulf state is expected to revolutionize how customers, merchants and financial ser vices providers enhance the value they reap from accessing financial data. By leveraging APIs – a set of communication protocols used to develop computer applications – Open Banking platforms authorizes retail and enterprise clients to access consumers’ financial data in real-time and share account information and transaction history with external parties such as vendors, suppliers, business partners and other banks. The cloud The use of the cloud has also been an enabler of digital transformation in the financial services sector. The cloud is an enabler of advanced analytics in banks as these computer system resources provide space to both store and analyze large quantities of data in a scalable way, including through easy connectivity to mobile applications used by customers. Big data, machine learning, and cloud computing can play a big role in helping banks to understand their customers more and be in a position to make business decisions in real-time including learning about a customer’s spending habits as well as enhancing the agility of financial institutions and enabling secure online payments, digital wallets, and online transfers.

“The leading public cloud providers offer an array of innovative products-asa-service that can be accessed on their platforms and help banks implement business and operating models to improve revenue generation, increase customer insights, contain costs, deliver market-relevant products quickly and efficiently, and help monetize enterprise data assets,” said Deloitte. Cloud solution providers offer financial institutions an opportunity to synchronize their enterprise; break down operational

providers and vendors thereby driving scale and improving profitability. “Driven by changes in digital technology, consumer demand and competitive forces, the way people make payments is evolving faster than any other area of financial services,” said EY. Last month, SWIFT unveiled a Payment Pre-validation service that will enable banks to verify payee account details before an international payment is sent, removing a key point of friction in cross-border transactions. The

DRIVEN BY CHANGES IN DIGITAL TECHNOLOGY, CONSUMER DEMAND AND COMPETITIVE FORCES, THE WAY PEOPLE MAKE PAYMENTS IS EVOLVING FASTER THAN ANY OTHER AREA OF FINANCIAL SERVICES – EY

and data silos across risk, finance, regulatory, customer support, and more. Digital payments The adoption of digital payment methods has undoubtedly soared since the outbreak of coronavirus while the use of mobile wallets has surpassed the use of debit cards as the preferred method of settling payments among consumers across the Middle East. PwC said that payment services providers including banks are leveraging on these adoption rates as an impetus to accelerate digital projects, but significant challenges and risks remain. The fact that payments represent the most frequent touchpoints between banks and their customers makes investment in the sector more important than ever. Several financial services in the Gulf region are participating in several accelerators, incubators and training programs to advance their access to financial technologies. GCC banks are collaborating with payments solution

Banking and Finance news in the MEA market

launch of the service is part of SWIFT’s efforts to drive instant and frictionless transactions worldwide. The growth in the payments sector is being accelerated by several factors such as the shift towards e-commerce platforms – by both customers and businesses – at the height of the pandemic, and financial institutions’ quest to meet customer expectations and cut back operational risk. Digital payments offer real convenience Industry experts believe that carving out payments as a stand-alone business entity such as Emirates NBD’s Network International and First Abu Dhabi Bank’s Magnati allows for the expansion of services across the financial services sector and opens the service to a broader array of customers. Digital transformation in the banking service sector is swiftly shifting the field of play whereby banks are now forced to focus on customer experience, and it is no longer about the products and services on offer.

Intelligence Quotient Andreas Burner Chief Innovation Officer, Smartstream underlines the central role that technology does, and will continue to play in banking and finance, highlighting Artificial Intelligence & Machine Learning as key elements

ow would you best define the role of technology providers to the banking and finance industry?

In our partnerships with major banks and financial service providers, SmartStream acts as the trusted software provider for proven and trusted off-the-shelf products that consist of highly available cloud-native components and cuttingedge technology like AI/ML. When using standard products, a bank ensures that the products are always kept up-todate and provide an uncompromising total cost of ownership (TOC) of wellmaintained software. In a partnership, SmartStream advises the clients with best practices and industry know-how as well as technological advantage.

W h a t i s c u r re nt l y d r i v i n g innovation in regional banking technology? Innovation is typically driven by problem statements that require solving. There are still many manual workflow steps in today’s banking space, and the infrastructure is often highly fragmented and lacks interoperability. Complex workflows and expensive systems are hard and expensive to maintain. Several innovative and strategic technologies tackle these problems, like cloud technologies, containerization, microservices design, and AI/ML technologies.

In SmartStream, we incorporate those technologies into our products to get product updates easily and get support for our client’s daily jobs.

What you believe are the two most impactful innovations in banking and finance in the past five years? The main innovation drivers at the moment are for sure AI/ML and various cloud technologies. SmartStream’s products handle billions of records worldwide, and of these big-data scenarios, AI/ML provides technology and competitive advantage. With our newest AI component, “SmartStream Affinity”, we outperform any other reconciliation product using observational learning and significantly increase the straightthrough processing. In combination with cloud technologies like data lakes and analytics tools, we provide unique insights to our clients to understand their workflows and products to better and optimize their business.

What innovations will we see being enabled by banking technology in the next five years? In our innovation lab, we are testing technologies, inventing new components, and make cutting-edge technology useful for everyday work. While testing technologies like AI/ML and DLT, we assess their usefulness for the financial

Andreas Burner Chief Innovation Officer, Smartstream

services sector and run prototypes with clients. At the moment, the most promising technology is for sure AI/ML. With our observational learning technology that helps end-users during their daily work, we are only at the beginning of a journey to increase automation of banking products significantly.

Being a business that is key to change and growth in banking and finance, what brings you the most satisfaction? In the last year, it was very rewarding to see that we could outperform products where everyone thought they have already reached the peak of efficiency with our latest software. New technologies like AI/ML work very well on financial data if used correctly, and it is satisfying to successfully finish a POC and overperforming the expectations of all participants. New technology is vital for banking and finance because it ensures competitiveness and is securely running daily operations without risk. In the upcoming years, we will hear a lot about the successes that new technologies bring to banking and finance. mea-finance.com mea-finance.com

DATA SECURITY BANKING TECHNOLOGY

Mission Accomplished HansPeter Wolf CEO & Founder, Appway, offers his perspectives on the regions’ banking technology landscape and describes earning a sense of accomplishment from providing holistic transformations that help businesses implement solutions

ow would you best define the role of technology providers to the banking and finance industry?

As technology providers working in the financial services industry, we support organizations to implement solutions that reduce operational risk

and intelligently orchestrate systems, while creating the unprecedented agility required to deliver the exceptional experiences that our customers demand today. We enable our customers to save time by taking care of their process complexity so they can focus on taking care of their clients, nurturing the trust

Banking and Finance news in the MEA market

HansPeter Wolf CEO & Founder, Appway

essential for a fruitful relationship. The change that’s required for this dynamic to flourish is one based on digital transformation, which serves as the most significant catalyst the financial services industry has seen and drives us to innovate continuously.

What is currently driving innovation in regional banking technology? In the Middle East, we have seen pushes towards end-to-end digitisation in onboarding for both individuals and SMEs, the growing use of APIs and Cloud computing, and orchestrating systems with third-party RegTech providers. As leaders in the digital onboarding space, we provide our customers with a range of onboarding capabilities – whether individuals, legal entities, or large corporates. Our technology is based on the concept of composable business and allows our customers to configure applications to suit their specific needs, thereby improving time to market and sharpening their competitive edge. Moreover, our wide integration ability enables our customers to make use of our diverse ecosystem of security, risk, and compliance utilities for KYC/authentication, along with other emerging RegTech and FinTech providers for an optimized customer experience.

and compliance along with the ability to mobilize large resources in a matter of minutes independent of location. Cloud also allows organizations to offer more innovative banking offerings to their clients, e.g. providing embedded services related to current offerings through strategic partnering over Cloud services.

What innovations will we see enabled by banking technology in the next five years? The demand for client centricity will continue be a catalyst for innovation in banking technology as organizations seek to meet clients’ expectations. We will also see digitisation continue to take on a key role in operational resilience and regulatory compliance, something that accelerated in the wake of the pandemic

organizations can deliver technologyresilient innovation in a ‘plug and play’ approach, along with data-driven automation of services across channels. In terms of infrastructure, the public Cloud will become the dominant model. SaaS is rapidly becoming the way that core activity is processed as COOs and CIOs get more comfortable with the arrangements. In ways, we will see every banking and finance industry organization transform into a connected services business orchestrated via software.

Being a business that is key to change and growth in banking and finance, what brings you the most satisfaction? We encourage the firms we work with to see digital transformation as a means

IN WAYS, WE WILL SEE EVERY BANKING AND FINANCE INDUSTRY ORGANIZATION TRANSFORM INTO A CONNECTED SERVICES BUSINESS ORCHESTRATED VIA SOFTWARE

What you believe are the most impactful innovations in banking and finance in the past five years? From a technology point of view, definitely API and Cloud. API banking allows organizations to upgrade legacy banking systems by connecting legacy back-end systems and the front-end through APIs to provide customer experiences through their own channels or third-party partners, minimizing friction to work more seamlessly in an increasingly connected world. Cloud, too, supports organizations to thrive in a more connected world. Both the public and private Cloud address issues like data security, accessibility, governance,

where elements of digital transformation (e.g. using digital/electronic signature to sign onboarding documents) were required to get the job done. We expect that the ‘new normal’ operating model will be catered to client and context, i.e. companies in finance will change the way they interact with their clients based on the context of the exchange, offering a seamless omnichannel experience through a smart balance between human and machine. T h e c o n c e pt of ‘c o m p o s a b l e banking’ will also take the spotlight so

to an end to drive change – these ends being the continuous enhancement of both operational efficiency and customer experience – and adopt it as part of the company culture. Being part of this holistic kind of transformation gives us a great sense of accomplishment. We also love connecting and collaborating with the right partners and suppliers, thereby creating a vibrant ecosystem that our customers can leverage to provide their clients with what they demand on their terms, whether that’s providing more touchpoints or channels or linking to apps. mea-finance.com mea-finance.com

DATA SECURITY BANKING TECHNOLOGY

Pride and Passion Ross Mallace Business Line Director, Temenos Banking Cloud, enthusiastically describes the recent and the forthcoming roles that technology and data will play in making banking a richer and more fulfilling experience for customers

What innovations will we see being enabled by banking technology in the next five years?

ow would you best define the role of technology providers to the banking and finance industry?

Technology enables banks to re-imagine the way that banking services are built and delivered. Making banking better: faster, simpler, cheaper and more accessible and inclusive. As a banking software company, that is our purpose, and we do this through the winning combination of rich functionality and leading technology like Cloud and XAI. And we’re passionate about innovation, spending industry-leading levels on R&D.

What is currently driving innovation in regional banking technology? The combination of new digital players and fintechs disrupting the market, the accelerating impact of the pandemic, and also the sheer power of the technology banks have available to them has created a perfect storm for digital transformation in banking. They recognize that to achieve this, they must have: • A digital banking platform delivering rich customer experiences • An ecosystem of partners and services; and • A core platform that drives automation and brings products to market faster. • And with everything underpinned by AI-driven analytics, innovation, agility and cost-efficiency.

expect to see more banks and banking services move to Cloud and SaaS-based models, particularly as Cloud datacentres become ubiquitous. AI is also having a profound effect. With the customer relationships and trust banks enjoy comes a vast amount of customer data. This data is perhaps banks’ greatest strength. It powers the personalized products, services and experiences, which will differentiate banks to customers. It’s also increasingly evident is that AI in banking needs to be explainable.

Ross Mallace Business Line Director, Temenos Banking Cloud

What do you believe are the two most impactful innovations in banking and finance in the past five years? Cloud and AI. Across the region, we’re seeing clients leverage the security, agility and elastic scalability of the Cloud to innovate in areas like mobilefirst banking. Changemakers in this area include STCPAY, the Middle East’s leading digital wallet. Temenos has led our industry in Cloud since 2011. Earlier this year, we launched The Temenos Banking Cloud to allow banks to rapidly design, build and launch new products. We enable banks to innovate in minutes and launch products in days, which is game-changing. We

Banking and Finance news in the MEA market

The power of disruptive technologies, the rise of competition from Big Tech, regulation like open banking and banks’ incredible innovation are combining to drive new business models in banking. Banks can build on their inherent advantages – compliance, regulated nature, customer relationships and trust – to respond to competition by pursuing new approaches. This includes building ecosystems around themselves and BaaS or embedded finance in others’ ecosystems as an additional revenue stream. Banks need to update their legacy systems to have the agility and flexibility to follow these new strategies. They must take advantage of Cloud, AI, open APIs, and microservices to deliver differentiating products and experiences quickly.

Being a business that is key to change and growth in banking and finance, what brings you the most satisfaction? What excites me is seeing all the fantastic ways customers and partners use our technology to make banking better. Intelligent tools to help people track their spending or save money, send funds to anyone instantly at little or no cost, or apply and be approved a loan in seconds. Banking is changing fast, and we’re proud to play our part.

DATA SECURITY BANKING TECHNOLOGY

Beyond Boundaries Miljan Stamenkovic General Manager, MENA at Mambu describes how banking technology, driven by factors including customer behaviour and central bank policies, is bringing about a whole new financial services landscape

ow would you best define the role of technology providers to the banking and finance industry?

Technology providers are playing a critical role in the evolution of the banking and finance industry. Financial services leaders recognize how technology transformation leads to significant competitive advantage. Adopting new banking technology is, therefore, critical for financial services organizations to stay relevant, thrive and to ensure they maintain and expand their market position.

What is currently driving innovation in regional banking technology? Customer expectations and behaviour remain a driving force when it comes to innovating within banking technology. But the ability to enable change has reached a new level of importance around the world, particularly in the wake of the COVID-19 pandemic. For years, the banking sector has been a digital laggard compared with other industries. Along with growing competition from digital-first banks, the pandemic has had the biggest impact on banks’ digital transformation strategy and accelerated the push from legacy systems to cloud. New digital challenger banks have been instrumental in taking the latest technology and creating a unique, digitalfirst approach to banking that fits into society’s increasingly digital lifestyle. To remain competitive, banks need to go to

market rapidly, and be able to scale quickly and easily while also offering absolute stability, or customers will look elsewhere. Cloud banking platforms like Mambu take a new approach – banks can innovate like never before by driving the creation of financial offerings, opening up new markets and revenue streams and delivering more profitable models.

What do you believe are the two most impactful innovations in banking and finance in the past five years? Central Bank policies play a pivotal role in advancing the innovation and financial agenda of the region, particularly in relation to a cloud-native technology and an API-first micro-services based architecture, among others. Due to the support of Central Bank policies and innovation, it is estimated that there are more than 300 (and counting) new digital challengers in banking around the world. Regardless of origin, one of the things these new banks have in common is that they are unencumbered by legacy technology and are able to build their offerings using modern technology and API-first delivery models.

What innovations will we see being enabled by banking technology in the next five years? Within banking, customers continue to demand best-of-breed services and evolving technologies continue to

Banking and Finance news in the MEA market

Miljan Stamenkovic General Manager, MENA at Mambu support that demand. This will continue to develop as a result of Central Bank policies and this evolution will drive API-first open-banking services, along with the financial services ecosystem around it. Client segments within retail, SME and corporate banking will maintain unique requirements, which will be serviced through state-of-the-art fintech solution providers connected within the ecosystem by API-driven micro services.

Being a business that is key to change and growth in banking and finance, what brings you the most satisfaction? What has changed in recent years is that there are no boundaries in looking at how to rethink a business model. Today you can employ cloud-based solutions and API-driven architectures to create an open banking ecosystem to drive your business. I truly believe in and enjoy working on agile projects. This is where you are constantly thinking of your time to market, or even more importantly time to value. And the best thing is - there is usually almost no burden of legacy technology to slow you down. Today, as a business, we can get the taste of what it is like to create the next generation of financial services. More importantly, we as consumers also get to enjoy all the benefits of this change in the industry.

Change i is our superpower. Change can feel absolute, daunting and dramatic. The end destination is great. However, no-one likes the journey to get there. Except Mambu. We love it. Mambu’s SaaS and cloud-native banking and financial services platform is for those that are just starting out, and those that are global powerhouses. Sure, we do core – and much more. Mambu can fast-track the design and build of nearly any type of financial product for banks, lenders, fintechs, retailers, telcos and others. And our unique composable approach means that independent components and connectors can be assembled and reassembled in any configuration to meet the ever-evolving needs of your business – and your customers. Let’s make change your superpower too.

www.mambu.com Contact us

DATA SECURITY BANKING TECHNOLOGY

Exceeding Expectations Matthijs Eijpe Regional Vice President EMEA, Backbase is precise about the pivotal role of technology, as he talks with MEA Finance about innovation in the banking and finance space

ow would you best define the role of technology providers to the banking and finance industry?

• Innovators: technology providers are driving innovation by bringing to the market new products and services and making them easily accessible to financial institutions. Banks don’t need to reinvent the wheel; they implement the product already developed by tech providers and adapt them to their own needs. Technology providers have a larger R&D team, constantly invest in innovation and manage to attract top talents in order to support innovation. • Influencer: Tech providers are inspiring the market by sharing a vision of the future and how we can reshape the industry. They integrate with the entire ecosystem from banks to other partners, and analysts to bring this vision into reality.

What is currently driving innovation in regional banking technology? • Cloud development • Emergence of new business models: platform model • Customer driving demand for digital solutions, personalised and easy banking. Lifestyle “super app”

TECH PROVIDERS ARE INSPIRING THE MARKET BY SHARING A VISION OF THE FUTURE AND HOW WE CAN RESHAPE THE INDUSTRY

What do you believe are the two most impactful innovations in banking and finance in the past five years? 1.) Mobile only NEO banks, it has really elevated the competitive field and innovations across the banking and finance sector. 2.) Open banking has really created new business opportunities, new business models, new types of fintechs that have moved the banking and finance industry into a more ecosystem versus a more closed one.

Banking and Finance news in the MEA market

Matthijs Eijpe Regional Vice President EMEA, Backbase

What innovations will we see being enabled by banking technology in the next five years? Technology providers will continue to innovate to meet and surpass the customer expectations. Everything we do at Backbase is with the aim of providing superior customer experience by helping financial institutions to innovate faster. We expect the coming years to bring more innovation in the domain of: • H yper personalised banking / Engagement Banking • Intelligent banking with AI to automate process, provide higher customer experience, reduce inefficiencies. • Fully cloud ready banks: from core to front, banks operating on cloud will become a standard, supported by a strong tech ecosystem. • D ecentralised financial services, moving the trust from a single institution into any ecosystem one. Being a business that is key to change and grow in banking and finance, what brings you the most satisfaction? Helping our customers achieve their goals such as driving digital transformation to maintain a leadership position in their market while facilitating the life of their customers. Working with executives that really apply theory into practice and become a central leader in the transformation journey of the organization they work for.

DATA SECURITY BANKING TECHNOLOGY

Home Advantage Talking with MEA Finance, Sunil Paul Co-Founder & Managing Director & Eljo J P Chief Business Officer of Finesse explain the necessities of efficiently providing working solutions for the GCC’s banking and finance sector, thus enabling them to cope with the serious issues imposed by the sudden demands of the pandemic

ow would you best define the role of technology providers to the banking and finance industry?

The Banking and Financial services industry is facing a lot of challenges due to a combination of ever-changing customer expectations, newer regulations, security and privacy concerns, and disruption from new-age technology companies. A delayed response to these asks can potentially result in organizations in this industry incurring heavy losses. This is where technology-providers come in. Technology providers have been key in bringing in technologybased solutions to the Banking, Financial Services and Insurance sector (BFSI) over the many years. BFSI companies that invested in technology-based solutions have been able to adapt quickly to the changing dynamics within the industry; the most recent being the Covid pandemic.

What is currently driving innovation in regional banking technology? The main reason for the drive for technology innovation within regional banks is the need to remain relevant, amidst the ever-changing, unpredictable dynamic within the banking sector. Take for instance - during the pandemic, the banking sector have had to

Sunil Paul Co-Founder & Managing Director

innovate continuously. On one hand, they needed to provide customers remotebanking functionalities to transact from the safety of their homes. They have also needed to invest in work-from-home (WFH) solutions to enable collaboration between employees. Between these, the banking companies had to continue ramping up with data security initiatives, with an increase in cyberattacks. None of these were imaginable before the pandemic hit. Those companies that were constantly innovating through technology were better prepared to weather the pandemic than those who kept technology innovation on the backburner. The need to innovate is central to companies in the BFSI sector. Technology acts as a great enabler to innovation and companies that invest in technology will be able to address opportunities

Banking and Finance news in the MEA market

Eljo J P Chief Business Officer

and challenges early and bring in benefits quicker.

What you believe are the most impactful innovations in banking and finance in the past five years? There have been many innovative ideas that have positively changed the banking and financial services industry during the past five years. The two most impactful of them in this sector would be use of Artificial Intelligence (AI) and the implementation of increased cybersecurity solutions. Artificial intelligence has given the banking and financial industry a whole new outlook on how they can meet the demands of customers, and provide them better products that are smarter, more convenient and safer to use. AI has also enabled the industry to reduce fraud

through real-time fraud detection, provide more realistic interfaces (chatbots) and reducing operational costs by automating repetitive work processes using Intelligent Process Automation (IPA). With greater digitalization of banking services, cybersecurity incidents and threats have gone higher. These databreaches make it difficult for customers to trust banks and hinder their running of operations smoothly. Implementation of a strong cybersecurity process within banks is the need of the hour. Our most common recommendation around cybersecurity has been the implementation of the Zero-trust security model across all infrastructure, internal and external. The model is based on the idea “never trust, always verify”, before providing access.

Being a business that is key to change and growth in banking and finance, what brings you the most satisfaction? Finesse, presently one of the most trusted software companies in the Middle East, was founded in 2010 with the vision to revolutionize the technology landscape within the GCC. A major part of Finesse’s client base continues to be the biggest banking and financial services companies in the region. During the Covid pandemic, Finesse partnered with all its clients to take stock of the situation and provide the best solutions each of our clients needed to have business continuity, be it through Artificial Intelligence (IPA, Chatbots), CRM, WFH suites, or Cybersecurity solutions. This helped not just our banking clients,

but it also helped their customers, and their employees get and provide the services needed from the comfort of their home, safe and with peace of mind. It brings us great satisfaction, as Finesse, to stand shoulder to shoulder with our banking and finance clients in the GCC and solve meaningful problems, solutions to which eventually bring in more happiness and prosperity to the region.

What percentage of your BFSI customers asked your company for a service to support their systems for working from home? Until Covid-19 arrived, it would have been whimsical to consider operations of Banking, Financial services and Insurance sector (BFSI) being managed outside of the office-workspace. Financial data were held in secure servers and distributed only to machines within a known and trusted network, often within the walls of the office. This approach is understandable as the BFSI happens to be most attractive to cyber-criminals even before the pandemic hit, and it would be sensible to reduce the surface area available for attack. Like many things, Covid-19 forced a change in strategy within the BFSI space. While organizations were forced to support customers remotely, they also needed staff to support these customers. With regulations in place to promote distancing to reduce the spread of the virus, organizations were forced to fasttrack allowing part of their employees to work from home (WFH). Finesse supports around 120+ Banking and Financial institutions

THE MAIN REASON FOR THE DRIVE FOR TECHNOLOGY INNOVATION WITHIN REGIONAL BANKS IS THE NEED TO REMAIN RELEVANT, AMIDST THE EVER-CHANGING, UNPREDICTABLE DYNAMIC WITHIN THE BANKING SECTOR

globally, including 80% of the banks in the UAE. Based on the digital maturity these organizations were at, Finesse helped pivot each of these organization’s effor ts at bringing ‘outside the physical workspace’ functionalities to both customers and employees of their organizations.

Briefly describe the products and services that you provided to support your clients for WFH. As far as WFH is concerned, the top priority for organizations is to keep employees safe, and to take steps to ensure a smooth transition for them to work from home, for uninterrupted business operations. The challenge for organizations is finding the right tools and technology for enabling effective and collaborative work from remote locations. Finesse has a wide umbrella of solutions designed to help remote workers stay connected and be productive. Most important among those is the Microsoft 365 solutions. Microsoft Teams and Microsoft 365 help employees get work done collaboratively and effectively. Teams and Office also have security features built in, so data is backed by enterprise-grade security. Chatbots, especially the AI-backed chatbots have been another tool that has immensely benefited the WFH initiative. Appearing online 24/7, chatbots have enabled first level of support by providing quick automated responses to customers from across time zones. Robotic Process Automation (RPA) has been another service that has been in huge demand during the pandemic. RPA bots take over manual tasks, so that employees could support distraught customers better, during these trying times. The bots interact with the system same way as a human does except that the bots can work round the clock and are accurate and faster. The RPA bots could integrate into existing systems quickly and easily at a nominal cost, which also happened to be good news to enterprises. mea-finance.com mea-finance.com

PARTNER CONTENT

Emerging trends reshaping the retail lending landscape Customer-centricity, emerging digital lenders, business model innovations – what are the trends that are sweeping the retail landscape globally?

he size of a nation’s lending portfolio is closely linked to its economic growth and development. Take South East Asia as an example where the countries that have high GDP growth also have high loan-to-GDP ratios. All these countries have a robust lending market supplying affordable, hassle-free financing to corporate, SME and retail borrowers, creating consumption-driven growth momentum. But this was not always the case. China in 1975, Thailand in the 1980s and Malaysia in the 1990s were all struggling to grow their GDP. But then they went through a retail boom, when per capita income crossed a threshold US$ 1000 to stoke the aspirations of the people for a better lifestyle, better housing, better transportation etc., which created a demand for retail financing. Today, the world is in a different yet similar situation, with the pandemic denting economic health globally. One way to reclaim growth is to fuel consumption, and one way of fueling consumption is by boosting retail lending.

Currently, there is ample scope to increase the loan-to-GDP ratio in many parts of the world. This is especially the case in developing countries, which need to bring their substantial underbanked population within the ambit of formal banking. However, that would stress the infrastructure of their banking technology landscape beyond tolerable levels. The only solution is to transform the retail lending landscape, across the formal banking industry as well as the informal, unorganized sector. This includes lending processes and banking workflows, as well as the associated technology infrastructure. The other important thing to consider are the broad trends that are sweeping retail lending across the globe. We can categorize these as changes in the nature of loans, of borrowers, and of lenders.

Rajashekara V. Maiya Vice President and Head, Business Consulting Group, Infosys Finacle

a means to fulfil a primary expressed need, for a car, for a college education, for a home and so forth. Therefore, banks’ conversations with customers should be about helping them achieve their primary desires rather than pushing a lending product. The product-centric approach to lending is now outdated, and has been replaced by a customer-centric or even customer-specific mindset of helping customers fulfil their unique desires while offering the best financing option in their particular context.

A loan that is no longer that

A customer who is demanding but debt-friendly

The biggest trend here is that the loan has become incidental, almost invisible, in the consumption journey. Customers don’t want loans per se; they are only

Today’s retail borrower is very different from the one of even a few years ago. There is no patience for spending hours in a branch gathering information and

Banking and Finance news in the MEA market

filling out forms. As a product of the digital age, this borrower expects financing to be delivered to him or her, on a digital device of choice. A key expectation is that the loan application and onboarding process will be digital. Another is that the terms of lending will be a balance of borrowers’ rights as well as their obligations. Many trends have gone into shaping this customer. Ample choice is one of them. For instance, a customer buying a car can get an attractive loan from a non-bank financing company or from the financing arm of the automobile manufacturer itself. The customer embarks on a redefined journey where a bank has no role to play. Another influencing factor is demography: more than 70 percent of the global population is below the age of 30 and almost everyone is digitally connected. Far from being debtaverse like generations past, these young customers demand deferred payment options such as credit card payments, monthly installments and the popular “buy now pay later” facility from Amazon.

A lender who has raised the bar Some years ago, “lender” usually meant a commercial bank. Today, the definition includes a plethora of providers, from Fintech companies to retail businesses to even social networks, offering financing in different forms and flavors. Amazon is a standout example, with a loan portfolio in excess of US$ 10 billion spread across its gigantic merchant base. Amazon’s lending process is not just completely digital, it takes all of 3 clicks to boot! What’s more, the company offers attractive rates, with full transparency and no hidden costs. Traditional banks are at serious risk of being left out of the new lending paradigm. To stay relevant, they need to reimagine their customer journeys to match the benchmarks being set by the likes of Amazon. At a minimum that would mean designing a lending process that is digital from end-to-end, where origination,

eligibility checks, approval and servicing can be completed within a few clicks. Secondly, banks should rely less on agents and brokers to sell their loans, replacing them with a digital alternative, such as a mobile app. The pandemic has anyway forced their hand by disrupting the physical agent network; banks should now take that as an opportunity to create a seamless digital selling experience, right from gathering customer information to generating leads to converting leads to loan sales. One more trend that is changing the face of banking – and consequently impacting lending – is the platform business model. The platform is front and center in digital loan processing. It

makes no mention of its banking products in these marketplaces; however, once a customer has fulfilled a primary need, for a new utility connection, for example, the platform offers an option to use a DBS Bank account to set up a standing payment instruction.

A word on the pandemic By accelerating digitization in every sphere, including lending, the pandemic opened the doors to simpler, transparent, cost-effective loans. In the latest EFMA Infosys Finacle Innovation in Retail Banking Study, financial institutions cited that the highest levels of innovation success were seen in the lending1. But could it also set off another trend, one

TRADITIONAL BANKS ARE AT SERIOUS RISK OF BEING LEFT OUT OF THE NEW LENDING PARADIGM. TO STAY RELEVANT, THEY NEED TO REIMAGINE THEIR CUSTOMER JOURNEYS TO MATCH THE BENCHMARKS BEING SET BY THE LIKES OF AMAZON. AT A MINIMUM THAT WOULD MEAN DESIGNING A LENDING PROCESS THAT IS DIGITAL FROM END-TOEND, WHERE ORIGINATION, ELIGIBILITY CHECKS, APPROVAL AND SERVICING CAN BE COMPLETED WITHIN A FEW CLICKS is also enabling lenders to participate in the primary journeys of customers by creating online marketplaces for nonbanking products and services. DBS Bank, with its highly successful platforms for used cars, travel, real estate and utilities, is a great example. The bank

References: https://www.edgeverve.com/finacle/efma-innovation-in-retail-banking/

where banks participate in improving the health of their customer communities? Just like insurance companies, which tap digital information about customers’ driving habits or lifestyle, to determine premium, could banks link the terms of lending to customers’ vaccination status by accessing their digital records subject to consent? It remains to be seen. mea-finance.com

PARTNER CONTENT

Building the future of financial transactions together Changing customer expectations, increased competition and ever-evolving technology continue to challenge existing business models, causing unprecedented pressure to innovate fast. Many of these challenges are not unique to individual institutions but shared by the entire industry. To solve these challenges and build the future of financial transactions, the entire financial ecosystem needs to collaborate Sido Bestani Regional Director, Middle East, Turkey & Africa, SWIFT

igitisation has radically reshaped the payments space, with the pandemic a catalyst accelerating the trend. In a recent report, the Boston Consulting Group (BCG) found that in the UAE the number of customers using online banking saw a 42 percent increase and the use of mobile banking rose by 65 percent during the pandemic. The Middle East is a vibrant innovation hub, and in recent years, local authorities have been instrumental in enabling the sector’s digitisation. Much has also been done in the region to adapt regulatory frameworks and invest in communication infrastructures.

Fostering greater inclusion and openness In MENA, almost 60% of the population is aged under 30. These young people are tech savvy and digital interactions are at the heart of their everyday lives.

They expect the same experience when it comes to payments, making the market ripe for digitisation. The shift towards embedded finance, whereby services are seamlessly inserted in other products to create a type of cross-pollination between brands and systems will shape the entire system into a significantly more accessible and inclusive ecosystem for all users. Several national programmes aiming to further enable digital services have been implemented in the Middle East and we now observe a similar trend at a regional level.

Exploring new technology For over 40 years, SWIFT has collaborated with its network to identify industry-wide challenges and develop solutions for the benefit of the entire global financial system and innovation remains central to our new strategy. Thanks to our unique position at the heart of the financial industry, we

Banking and Finance news in the MEA market

have a vital role to play in identifying and evaluating the viability, practicality and potential of emerging technologies to deliver value to our community. For example, we are engaging with central banks, financial institutions, technology providers and academics to understand possibilities that central bank digital currencies (CBDCs) could enable, and how SWIFT could support central banks should they wish to implement digital currencies. As part of that exploration, we published a paper in May 2021 discussing the opportunities and challenges of CBDCs for international payments. Additionally, we continue to explore how to harness the power of SWIFT’s unique data with artificial intelligence (AI). Combining AI with SWIFT data has the potential to provide unique insights that can help resolve existing and emerging challenges across financial services without compromising the

integrity of transaction data or the privacy of users.

Data is the name of the game Data is one of the most valuable commodities in the 21st century, enabling people and organisations across the world to make better decisions and vastly improve economic productivity. For the payment ’s communit y, the transition to ISO 20022 plays a central part in data-based innovation, symbolising a transformational change in the way network participants can extract rich data. In parallel to ISO 20022 migration, the upgrading of multiple domestic payment systems in the region and across the world allows for the unification of data sets, opening opportunities for automation, efficiency, and even the creation of new services that could be driven by AI and machine learning (ML). SWIFT sees the value offered by AI and ML particularly in the context of predictive technologies and we are exploring the use of tools that predict and identify anomalies to deliver the goals spelled out in our new strategy. These technologies have the potential to improve customer experience and insights and remove friction in the payments process by predicting where things may go wrong or whether a payment is fraudulent. The opportunities to innovate in this area with the community are almost unlimited.

Collaborative innovation Establishing the right collaboration models within the banking community has been essential for the industry to reach where it is today. To get this right, clearly defining the customer or business outcome, then working out which collaboration tools and approaches are best suited to meet that goal is key. SWIFT plays a central role in bringing different institutions together to explore new solutions. Through industry-wide collaboration, we can develop solutions that mutualise costs and drive a far

greater change than individual institutions could do alone. And collaboration can take many forms.

Innovation hackathons SWIFT regularly brings the financial ecosystem together to discover creative solutions to industry challenges. In 2021, SWIFT partnered with the Bank for International Settlements (BIS) on a hackathon to explore the potential of ISO 20022 and APIs to enhance cross-border payments. SWIFT has hosted multiple hackathons, bringing together innovators from across financial services. This year, the SWIFT Hackathon 2021 is bringing together teams from across the financial community to develop AI and ML solutions that can reduce friction across the entire industry. The winning teams will present their solution at the world’s largest transaction banking event, Sibos; and we will be inviting them to come and co-create their solution with us so that it can benefit the entire financial community.

Community collaboration In 2020 we launched SWIFT gpi Instant, a service developed collaboratively with our customers that enables remittance payments from anywhere in the world to be routed from account to account in seconds, with fee and FX transparency, robust security and full regulatory compliance. Connecting SWIFT gpi, the high-speed cross-border rails with real-time domestic payments infrastructure enables banks to use existing infrastructure to provide better service 24/7, with faster speeds, clarity on fees and crucially, predictability for when an end beneficiary’s account will be credited. Also in 2020, SWIFT began working with more than 20 banks to develop a new low value payment service, which builds on the strength of SWIFT gpi and the high-speed rails that have already transformed high-value payments. This new service, called SWIFT Go, will enable consumers and SMEs to benefit from

predictable payments, with costs and processing times known upfront, and realtime status available to both originator and beneficiary customers via their financial institutions. Most recently, SWIFT collaborated with RegTech Suade Labs to explore how combining AI-based software with SWIFT’s unique transaction data could streamline the complex liquidity reporting requirements that financial institutions currently face. Fully harnessing the power of APIs is another great opportunity. APIs allow different platforms to talk to each other and facilitate the creation of new products and services through the secure but open exchange of data. Innovating successfully is not a simple task. It requires a high level of coordination and for everyone to be pointed in the same direction. Therefore, the next two years are going to be really exciting. With the launch of our next-generation platform, we aim to transform the world of payments and securities by facilitating instant and frictionless cross-border transactions. It will also present opportunities for new partnerships and collaborations using APIs and cloud technology. By developing a common set of services with and for our customers, our goal is to help reduce the cost and risk of innovating for everyone in the community. Additionally, we are encouraging our community to co-create new products with us to spur on the overall level of service our end-customers receive. In reality, nobody will single-handedly find the answers to some of the industry’s biggest challenges. But, if we take an evidence-based approach and focus wholly on our end-customers’ experience, there is the potential for us to build some great things together. Collaboration is part of SWIFT’s DNA and at the heart of our new strategy, and we are working with our community around the world to develop solutions that benefit the entire global financial system. mea-finance.com

CRYPTOCURRENCY

Are cryptos a bubble or the future of finance? The Middle East region has a keen eye for financial technology and the initiatives that are being implemented from Tel Aviv to Dubai underscores how digital assets are making inroads into the region

ryptocurrencies, once a potential rival of gold as a safe-haven store of value, they have lost their lustre among institutional investors after a volatile plunge from record-highs following a crackdown on mining and trading activities. Considering the growing interest in cryptos from some of the world’s leading financial institutions and individuals alike, regulators including some from the Middle East region have called for cryptos to carry the toughest bank capital rules of any asset. Deloitte said, “An increasing number of companies worldwide are using Bitcoin and other crypto and digital assets for a host of investment, operational, and transactional purposes.” Regulators and investment experts often dismissed cryptocurrencies as

REGULATION IS A STUMBLING BLOCK, BUT REGULATORS HAVE SHOWN THAT THEY SEE THE VALUE OF BLOCKCHAIN AND CRYPTOCURRENCIES, AND ARE WORKING TO SUPPORT THESE TECHNOLOGIES, WHICH BODES WELL FOR FUTURE ADOPTION – Accenture

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excessively volatile, a bubble, too risky to invest in. However, those in favor of cryptocurrencies especially financial technology experts argue that they are a hedge against inflation and fiat currency fluctuations. Those arguing in favor of cryptos also say that they can survive any economic or infrastructure collapse, a belief that is being widely shared following the global economic fallout due to the pandemic. “Regulation is a stumbling block, but regulators have shown that they see the value of blockchain and cryptocurrencies, and are working to support these technologies, which bodes well for future adoption,” said Accenture. However, not all think the same way. The Basel Committee on Banking Supervision, a global committee of banking super visor y authorities, cautioned earlier in June that the growing use of cryptocurrencies has the potential to “increase global financial stability concerns and risks to the banking system in the absence of a specified prudential treatment.” Cryptocurrency users leverage blockchain technology, a decentralized ledger system of all transactions across a peer-to-peer network that enables par ticipants to confirm transactions without a need for a central clearing authority.

car company is “likely” to again accept cryptocurrency in payment.

Cryptos in the Middle East

KPMG said that, unlike the traditional financial systems which use a centralized database with a single point of authority, blockchain technology allows for a distributed database that holds a growing number of records. The Middle East has a keen eye for financial technology and the initiatives that are being implemented from Tel Aviv to Dubai underscore how blockchainbased currencies are making inroads into the region as some governments look to tech to diversify their economies. However, despite risks and volatility associated with digital coins, they captured the attention of investors from billionaires Elon Musk and Jack Dorsey to hedge-fund moguls including Alan Howard and Paul Tudor Jones. Similarly, the surge in trading in Bitcoinlinked securities also underscores how investors are increasingly looking to gain exposure to or bet against c r y pto c u r re n c i e s o n t ra d i t i o n a l markets rather than buying the digital currencies outright. But later, in May 2021 Elon Musk stopped accepting Bitcoin payment for Tesla vehicle purchases over environmental concerns relating to Bitcoin mining. However, at the B Word event on the 21st of May, he said that if the percentage of renewable energy used to mine Bitcoin rises to or above 50%, with an increasing trend, the electric

The Middle East joined the crypto frenzy in August 2019 when the Central Bank of Bahrain awarded cryptocurrency exchange firm Rain a license that allows it to buy, sell and store crypto-assets. The issuance of the license to Rain after a two-year regulatory sandbox made the kingdom the first jurisdiction in the region to issue a crypto-asset module license. The crypto exchange platform has satellite offices in Saudi Arabia, Egypt, and the US, allowing users to buy and sell digital coins across the GCC, according to information on its website. Canadian Bitcoin fund manager 3iQ listed its Bitcoin exchange-traded fund “The Bitcoin Fund” on Nasdaq Dubai, becoming the region’s first indexed

Speaking at Bloomberg’s Qatar Economic Forum in June 2021, Qatar Investment Authority (QIA) chief Mansoor Bin Ebrahim Al Mahmoud cautioned that cryptocurrencies “need a bit of maturity before we make our view about investing.” Regulators in Kuwait and Turkey share the same sentiments as Al Mahmoud. In May, the Central Bank of Kuwait (CBK) cautioned financial institutions operating in the Gulf state against dealing or trading in Bitcoin, Ethereum or other cryptoassets. CBK cautioned that dealing in digital coins leaves room for illegal uses of funds, unauthorized transactions and money laundering given that the assets are not regulated by any central authority in the Gulf state. In May, Turkey said it would add cryptocurrency exchange companies operating in the country to a list of organizations that are regulated by its antimoney laundering and counter-terrorist

AN INCREASING NUMBER OF COMPANIES WORLDWIDE ARE USING BITCOIN AND OTHER CRYPTO AND DIGITAL ASSETS FOR A HOST OF INVESTMENT, OPERATIONAL, AND TRANSACTIONAL PURPOSES – Deloitte

cryptocurrency digital asset-based fund in June 2021. The Canadian fund, which received its regulatory clearance in April, plans to use its listing in Dubai to expand its regional footprint and work closely with banks in other GCC states. However, other regional countries such as Kuwait and Turkey have sounded alarm bells saying trading in digital coins exposes individuals to digital breaches, cyberattacks and is unsustainable. Accenture said that some countries in the Middle East view cryptocurrencies with caution due to their lack of a central authority and are beyond the control of monetary policy.

financing rules after the authorities closed down two crypto exchange platforms, Vebitcoin and Thodex.

Digital currencies The emergence and increase in popularity for major cryptocurrencies such as Bitcoin, Ethereum and Cardano are piling pressure on central banks to ensure they have a viable alternative before unregulated payment forms take over. Just like their counterparts in some of the world’s leading financial centers, some central banks in the Gulf region are currently considering issuing central bank digital currencies (CBDC). mea-finance.com

CRYPTOCURRENCY

The regulators are concerned about losing control of digital currency if private currencies such as Bitcoin become widely adopted due to the high possibility of advanced technology falling into the wrong hands. In June, the Bank of Israel was reportedly tr ying out Ethereum’s technology in a recently launched internal digital shekel trial. The Israeli central bank had issued a report in May in which the regulator said that the digital payment system could have a positive impact on the economy by simplifying payment processes while providing security to both parties in a transaction. Last November, the Saudi Central Bank (SAMA) and the Central Bank of the UAE (CBUAE) in collaboration with six commercial banks from the two Gulf states completed a proof-of-concept project on a wholesale central bank digital currency ‘Aber Project’. The digital currency pilot is aimed at settling domestic and cross-border transactions using central bank money on a distributed ledger technology. In their pilot project, SAMA and CBUAE discovered that a distributed payment system offers “significant improvement over centralized payment systems” for domestic and cross-border commercial bank settlements.

Regulatory hurdles Since the beginning of the year, major cryptocurrencies such as Bitcoin – which reached an all-time high of more than $63,000 in April – have plunged to record lows due to ongoing crackdown in major economies amid regulatory, data security and sustainability concerns. Binance Holdings, the world’s biggest cryptocurrency exchange by trading volumes, is facing growing scrutiny from financial regulators globally with Thailand and the Cayman Islands becoming the latest nations to curb the operations of the largest crypto exchange platform. In June, the UK financial watchdog banned Binance from operating in the country, joining Canada, Singapore and

Japan as regulators around the world intensify clampdowns on the industry. Meanwhile, in the US several regulatory bodies including the Department of Justice and the Internal Revenue Service (IRS) are also investigating the cryptocurrency exchange firm. Binance, which offers incentives such as Binance Coin, lower fees and a new digital ledger, is also being probed by in Hong Kong where the securities watchdog said the crypto exchange platform was not licensed to sell stock tokens. The cryptocurrency exchange platform said in July it was winding down support for stock tokens just a few months after it began offering the product. Chinese authorities have also been particularly strong in cracking down on financial institutions trading in digital assets and cryptocurrency mining, driven by environmental concerns and a desire to promote financial order.

mining and trading activities as part of efforts to fend off financial risks. Since May, several regions in China including Inner Mongolia, Sichuan, Yunnan and Yunnan have declared war on crypto mining and trading activities.

Blockchain As the technological architecture underlying digital assets, blockchain is far more important than the hundreds of emerging tokens and cryptocurrency exchange platforms. Its adoption across different sectors of the economy and the hype around digital assets is revolutionizing commerce, but lack of trust may stall progress. PwC said that the implementation of the blockchain is poised to become an integral part of financial institutions’ technology and operational infrastructure. Blockchain is expected to transform the way that capital markets operate

SOME COUNTRIES IN THE MIDDLE EAST REGION VIEW CRYPTOCURRENCIES WITH CAUTION DUE TO THEIR LACK OF A CENTRAL AUTHORITY AND ARE BEYOND THE CONTROL OF MONETARY POLICY – Accenture

Beijing’s heightened cryptocurrency crackdown has seen Bitcoin plunging below the $30,000 mark as of July 20, 2021, according to crypto-data website CoinGecko.com. The current price level also mirrors the plunge in global markets amid concerns that the fast-spreading and deadly Delta variant of COVID-19 could hamper economic recovery. Cryptomining business in China accounts for more than half of global Bitcoin production. However, the State Council’s Financial Stability and Development Committee said in May it will clampdown on cryptocurrencies

Banking and Finance news in the MEA market

through the tokenization of traditional bonds, stocks, and other assets and putting them on public blockchains. The public ledger would be instrumental in removing gatekeeping and third parties in the loans and credit system while making it more secure to borrow money and lowering interest rates. The Middle East is seeing an increasing inflow of fintech firms challenging incumbent banks through better flexibility and better catering to customers’ requirements and blockchain is playing a crucial role in digital transformation in the financial services sector.

OPINION PIECE

Tokenization, more than the sum of its parts Nowadays, terms like Bitcoin, cryptocurrency or Blockchain are no longer unfamiliar words for most people, and with tokenization set to add a global dimension to the tradability of real assets, they will become more mainstream still. Erwin Dokter Chief Executive Officer, Zeniq on the growing role of tokenization

lthough many people mistakenly assume that they are synonyms, Bitcoin is only an example of one of the first applications of blockchain technology. The tokenization of real assets is another one. With the power of tokenization, we are entering a new era of investment opportunities and funding of projects. It also increases liquidity of real assets that are currently considered to be illiquid and out of reach for most retail investors. In a nutshell, tokenization involves converting the partial or full ownership rights to an asset into a digital representation in the form of a token that is stored and administered on the blockchain. For example, you could opt to tokenize a percentage ownership of ‘The scream’ by Edvard Munch, which was valued at USD 120 million at Sotheby’s in New York in 2012. The fractional ownership of this painting could be translated into one million tokens issued at USD 120, administered on a blockchain and traded on a token exchange. Given that the price of USD 120 million dates back to 2012, it is likely that if the painting were sold today in an open market where it is possible to

own a fractional share of it, a new market value would be established by agents going long or short on the token. The tokenization process via a blockchain is more efficient than the current trading methods and it adds a global dimension to

THE UAE IS A MARKET RIPE FOR MASS TECHNOLOGY ADOPTION DUE TO ITS FORWARDTHINKING LEADERSHIP, REGULATORS AND WORLD-CLASS INFRASTRUCTURE asset tradability. Auction houses charge fees of between 12% and 25%, while art gallery fees typically range between 6% and 10%. The fees charged by the first tokenized art broker − Maecenas −

Erwin Dokter Chief Executive Officer, Zeniq

range from 2% to 6%. The arrival of new participants and a more transparent market are likely to push those fees down to just a fraction of these percentages. The UAE is a market ripe for mass technology adoption due to its forwardthinking leadership, regulators and world-class infrastructure. The vision of HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President & Prime Minister of the UAE and Ruler of Dubai, is to transform Dubai into becoming a city that is fully powered through blockchain technology. ZENIQ unleashes the potential of the blockchain technology and provide a new wave of economic opportunities and digital innovation. The added value we bring through ZENIQ Technologies is in providing the right technology and expertise to develop an advanced infrastructure and regulatory system for the development and adoption of digital assets and tokenization. ZENIQ is fully committed to support the UAE Government towards achieving a digital economy and accelerating the UAEs role in the 4th industrial revolution. mea-finance.com

LIFESTYLE

Presenting the Elegant Oasis of Raffles Maldives Meradhoo Experience two beautiful worlds in one, a two private island paradise set among the glistening Indian Ocean

n the southern corner of the Maldives, surrounded by the crystalclear Indian Ocean and offering the legendary service of Raffles, The Raffles Maldives Meradhoo is now open, welcoming guests to experience unadulterated luxury in one of the world’s largest and most remote natural atolls. Spanning across two islands, the resort offers thirty-eight magnificent beachfront and overwater villas abundant with space. The open and airy rooms come with privilege of being the islands’ sole resort, boasting seclusion unlike any other. Reflecting the natural beauty of the island, rooms are adorned with luxurious furnishings including the famed Raffles’ writer’s desk and guests can marvel at

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

o ves Meradho

Raffles Maldi

the vibrant sea life below the glass panel on the terrace of the overwater villas. Situated close to the equator, the brilliant habitat lends itself to unbelievable diving and snorkelling experiences, rife with spectacular marine life. Activities are crafted for the adventurous and curious souls, including water sports or big game fishing, or taking part in paradisical excursions. Build confidence through diving courses with experienced instructors and truly explore all that the magical waters have to offer. For the calmer dispositions looking to rejuvenate, visit the Raffles Spa, set over the water and open to the sky above where guests can unwind in a haven of serenity. A marine utopia, the resort invites you to discover and understand one of nature’s most beautiful masterpieces. Explore the resort’s two remarkable house reefs, led by our unique Marine Butler, who is available to all guests and will happily lead snorkelling tours around

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

the astoundingly clear waters, abundant with colourful wildlife. The resort is an ocean-lover’s paradise, as on-site is our resident Marine Biologist, Doctor Giulia Pellizzato. Connecting guests to the marine environment directly, she gives educational presentations, as well as daily snorkelling trips. With over ten years’ experience of research studies and diving, you are invited to participate in her coral growth and seawater monitoring projects and witness the beauty of the Maldives truly come to life. Feel the awe of the Raffles experience from the first steps into Male, with the intuitive, discreet and personalised VIP treatment with the Raffles butler service, to every need. Located in the pristine Gaafu Alifu Atoll, Raffles’ first resort in the Maldives lives up to its prestigious reputation. With a lavish backdrop and lush greenery, Raffles Maldives Meradhoo enchants travellers with meaningful experiences that will linger for a lifetime.

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

WEB ASSISTANT Marie Orayan web@mea-finance.com

Banking and Finance news in the MEA market

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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MEA Finance - August 2021

Articles inside

Presenting the elegant oasis of Raffles Maldives Meradhoo

Building the future of financial transactions together

Tokenization, more than the sum of its parts

Are cryptos a bubble or the future of finance?

Pride and Passion

Beyond Boundaries

Emerging trends reshaping the retail lending landscape

Mission Accomplished

KPMG Report: CEO’s have shifted investment focus to customer experience, technology and data security

Intelligence Quotient

Emirates Development Bank Board reviews strategic progress, applauds achievements in H1, 2021

Banking Technology Innovation Enablers: Empowering Digitalization

The frictionless future for payments

Venturing Forth

Staying ahead of the curve

The new frontier of investment