MEA Finance - July 2021 by meafinance

July 2021

Present in the Future Abdulfattah Sharaf, CEO HSBC UAE and Head of International

July 2021

Present in the Future Abdulfattah Sharaf, CEO HSBC UAE and Head of International

14 Wealth and Private Banking | 24 Digitization | 30 Real Estate Investment | 48 Banking Tech Summit | 61 Awards Winners

Congratulations to all the win Banking Technolog

winners of the MEA Finance ology Awards 2021

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In this issue...

e have been busy at MEA Finance since you saw the May edition. Of course, we have been working on this, the July 2021 issue but as you will see while making your way through the magazine, we also hosted our Banking Technology Summit and Awards, on the 26th of May in the Armani Hotel at the Burj Khalifa. Rightly described as having been a landmark event, it featured a full house of topspeakers from banking, finance and technology, getting together live (for most, the first time in over one year) to discuss the future of banking and finance technology in the post-pandemic world. You can take in a report of the summit between pages 48 and 59. Following on from the summit report and mirroring the schedule on the day, we review the MEA Finance Banking Technology Awards, showcasing the winners of the forty categories in a celebration aimed at recognising excellence and stand-out performance in banking and financial technology. Read about the awards and view the winners between pages 61 and 86. Also, in your July issue we hear from Abdulfattah Sharaf, Group General Manager, CEO of HSBC UAE and Head of International, in our cover feature from pages 34 to 37, who talks about how HSBC is making the future of the region an important part of its present. “HSBC’S purpose is to use our unique expertise, capabilities, breadth and perspectives to open up new kinds of opportunity for our customers”. Elsewhere, from page 14, we talk with Al Mal Capital, Citi and Julius Baer, who provide their perspectives on the concerns facing the growing Wealth Management and Private Banking sector in the region as we move into the post-pandemic era. We take a brief look at digitisation with another contribution from HSBC sharing their experience as a modern-day bank keeping pace with the quickening change environment, from page 24, and our Advisory View in this issue, pages 38 & 39, features George Hojeige, CEO of Virtugroup on Neo Banking, “in the Middle East, Neobanking is emerging as a strong alternative to traditional sources of banking and financial services”. In our look at the real-estate market, starting at page 30, Tim Haywood, General Manager and Regional Vice President at Walton International, says the outbreak of the pandemic has accelerated demand in the residential sector, positively noting, “With a progressive government implementing policies to make it easier to live, work and potentially retire in Dubai, more professionals and entrepreneurs may consider the city as a base and invest in Dubai property as a result.”. The Banking Technology section, from page 40, includes Volante Technologies highlighting the challenges faced by banks in today’s highly competitive and quickly changing environment and Appway offering a detailed argument for why digital transformation is no longer an option. Finally, with our market news detailing some regional finance and banking activities of note in the past weeks, you will have an issue that is just as busy as we have been in bringing it to you.

mea-finance.com

CONTENTS

CONTENTS 34

MARKET NEWS

National Bank of Oman and Loylogic announce a strategic partnership for PointsHub, Reward Store, Travel and PointsPay

Kuwait Finance House (“KFH”) Successfully completed the upgrade of its fully automated STP Islamic Treasury solution

NBK officially launches the New MX.3 Solution for its treasury and investments operations

WEALTH & PRIVATE BANKING

18 21

Sustainable Growth

A wealth of change

Specialised attention to changing needs

DIGITAL TRANSFORMATION IN BANKING

24 28

Banking in the future Forward thinking

COVER STORY

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

Present in the Future

BANKING TECHNOLOGY

Powering new banking business models with open banking platforms

42 44 46

Facing the payments challenges

Applying Intelligence Onboarding and KYC trends in 2021

CONFERENCE

MEA Finance Banking Technology Summit 2021

AWARDS

MEA Finance Banking Technology Awards 2021

40 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

48 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 WEB ASSISTANT Marie Orayan web@mea-finance.com

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

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

mea-finance.com

MARKET NEWS

National Bank of Oman and Loylogic announce a strategic partnership for PointsHub, Reward Store, Travel and PointsPay Aiming to extensively broaden its Nuqati Rewards programme offering and bring more choice to members, National Bank of Oman and Loylogic partner to provide state-of-the-art solutions

National Bank of Oman Headquarters

ational Bank of Oman (NBO), the Sultanate’s first local bank, and one of its largest, and Loylogic, a leading player in e-commerce and e-payment solutions for loyalty programmes, have announced a strategic partnership on Loylogic’s PointsHub and PointsPay solutions for the Nuqati Rewards programme. Nuqati Rewards is the country’s first and only free loyalty programme that

rewards members with points for their day-to-day banking on a wide range of banking products and services. Customers can redeem their points through a host of options including travel, bill payments and shopping. Through this collaboration, NBO aims to extensively broaden its Nuqati rewards offering with an innovative platform in order to increase programme member engagement and retention.

Banking and Finance news in the MEA market

Loylogic is providing its state-of-theart PointsHub and PointsPay solutions to the programme, thus opening-up many points redemption and collection options for Nuqati Rewards members. Customers can now redeem their Nuqati points on merchandise on the Reward Store and an enhanced travel option. The programme now offers a powerful reward catalogue including products from leading brands, as well as useful features like points-and-cash payments and personalized, real-time member targeting. Maha Al Raisi, Head of Retail Products, at NBO, said, “At NBO, not only do we bring the latest, most stateof-the-art products and services to our customers, but we aim to give them the best banking experience possible. We are constantly finding ways to upgrade and maximise our popular Nuqati programme and are delighted to team up with Loylogic to give more rewards than ever before, simply through banking with us. Now, customers can access and manage their Nuqati account through the app, making it even easier.” Dominic Hofer, CEO and founder of Loylogic, expressed his excitement: “Loylogic is very happy to enter this extensive partnership with NBO, one of the most prestigious banks in the region. Nuqati Rewards’ goal of providing more choice and delight to members made us a natural fit as their strategic partner. Launching several of our cuttingedge solutions for the programme, we are looking forward to boosting Nuqati Rewards to new heights.”

HOW CAN YOU ACCESS U.S. REAL ESTATE INCOME SOLUTIONS?

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Endorsed as Shariah-compliant by Amanie Advisors

Speak to us today to learn more about our products and how you can deliver superior returns for your High Net Worth Clients. For more information, please contact TIM HAYWOOD at Timothy.Haywood@walton.com | +971 05 44 888 673 Risk disclosures: Investing in land has risk. Land investment is illiquid and it may be impossible for you to sell your land within a short period, or at any time at all. Land could potentially lose value over time. Past performance is not necessarily indicative of future results. No representation is made that profits, income or other returns will arise, or will likely arise, from the acquisition, holding, disposal or any other dealing with the land, or that any profits, income or other returns will arise or will likely arise within any specific time. These risk disclosures do not purport to disclose all risks associated with land purchases. Walton does not provide any investment, financial, accounting, legal or tax advice. You should carefully consider whether land investment is suitable for you in light of your financial circumstances, and consult professional investment and tax advisers if necessary. Walton and its representatives are not licensed to deal with real property located in Mainland China, Hong Kong, Macau, Taiwan, Japan, Korea, UAE, Singapore, Malaysia, Thailand, Vietnam, Indonesia, India, Philippines and South Africa.

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18/6/2021 11:59 AM

MARKET NEWS

Kuwait Finance House (“KFH”) Successfully completed the upgrade of its fully automated STP Islamic Treasury solution KFH customers can look forward to benefitting from best practices and enhanced features of the new Path Solutions’ Java-based platform iMAL R14.1, allowing them to offer a wider range of Islamic Treasury products and services based on specific requirements to its customers around the world

ath Solutions, announced that Kuwait Finance House (“KFH”), Ku wait ’s Isl a mi c b a nki ng pioneer has successfully completed the upgrade of its fully automated Straight Through Processing (STP) Islamic Treasury solution to the new Path Solutions’ Java-based platform iMAL R14.1, as of 21st February. KFH, considered a pioneer in Islamic finance or Sharia-compliant banking, was established in 1977 as the first bank operating in accordance with the Islamic Sharia, and today it is one of the foremost Islamic financial institutions in the world. The successful Go Live signifies a pivotal point in KFH’s development. Built on an open architecture and developed in Java, the iMAL R14.1 allows the bank to take advantage of the digitalization, flexibility, reliability, scalability and portability that this new Islamic Treasury platform offers. “KFH constantly invests to enhance its systems by implementing latest technology and innovative solutions to

Kuwait Finance House

ensure we offer world-class products and services to our customers”, said KFH Acting Group CEO, Abdulwahab Al-Roshood. Al-Roshood added, “We are happy to have completed the successful upgrade of our Islamic Treasury solution to iMAL R14.1 in a smooth and timely manner. With the new Sharia-compliant fully STP

Banking and Finance news in the MEA market

automated Islamic Treasury platform, our customers will benefit from the best practices and enhanced features that Path Solutions has invested in the software since our last implementation. Moreover, we will be able to continue to scale in line with our growth strategy and stay ahead of industry trends as we continue to expand into new segments”. Mohammed Kateeb, Group Chairman & CEO, Path Solutions, commented, “Collaboration is vital in order to stay ahead of in an ever-changing financial landscape. By collaborating with our clients to help them identify key customer expectations that will enhance their daily processes and interactions, and investing around 30% in R&D, we ensure that we remain the industry leader in Islamic software solutions. iMAL R14.1 will empower KFH to be future-ready, given the rapid digital disruption that the segment is facing. The result is a dynamic ecosystem of innovation that will only drive incremental growth and customer satisfaction. We look forward to continuing to work with our long-standing partner KFH and our clients all over the world to modernize their platform and bring real-time and fully digital banking services to their customers”. Meanwhile, Treasury GM – KFH Group, Ahmad Eissa Al-Sumait mentioned that the successful implementation and Go Live of the new Islamic Treasury solution that is fully automated with Reuters, Bloomberg and 360T at KFH Group will improve the performance of all treasury functions at the bank. “KFH can now offer a wider range of Islamic Treasury products and services based on specific requirements to its customers all over the world”. He further expressed his gratitude and appreciation to Path Solutions and KFH teams for their dedication and great efforts in implementing the new system remotely due to COVID-19 lockdowns while ensuring a high quality and stable production environment. All channels and surround systems were verified and got satisfactory results.

Innovating-21x27cm_v1.pdf 1 5/27/2021 4:00:36 PM

It’s great doing

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Opening up a world of opportunities

HSBC Bank Middle East Limited U.A.E Branch, P.O.Box 66, Dubai, U.A.E, regulated by the Central Bank of the U.A.E for the purposes of this promotion and lead regulated by the Dubai Financial Services Authority. © Copyright HSBC Bank Middle East Limited 2021. ALL RIGHTS RESERVED. No part of this document may be reproduced, stored, distributed or transmitted in any form without prior written permission of HSBC Bank Middle East Limited.

MARKET NEWS

Companies call for greater financing support from Covid-19 fallout As almost nearly 88 per cent of companies say that their banking needs have changed because of the pandemic, Hind Salim Eisa Executive Vice President and Head of Services and Manufacturing at Mashreq Bank says that more flexible and responsive finance solutions are essential

ompanies in the UAE are calling for continued financial support and greater flexibility on loan repayments in light of the impact of Covid-19 on their revenues and cash flow. In a survey of 63 companies in the UAE conducted by MEED and Mashreq, nearly 88 per cent of companies said that their banking needs have changed because of the pandemic, with over 50 per cent saying that they have an increased need for financing. “Companies across all areas of the economy have been knocked by the impact of Covid-19 on their business,” says Hind Salim Eisa, Executive Vice President and Head of Services and Manufacturing at Mashreq Bank. “Many have had revenues hit by lockdowns and travel restrictions. While others have seen productivity levels fall and costs rise as a result of the disruption,” she adds. “In order to continue through these challenges, new, more flexible and more responsive finance solutions are essential.”

“Medium-sized companies, who are considered as the backbone of the UAE economy, constitute the largest segment of customers in our corporate banking portfolio in terms of number of customers – and by extension number of transactions too,” explains Eisa. About 57 per cent of medium-sized companies surveyed, those with annual revenues of between $30m to $270m (AED100m -AED1bn), reported increased need for financial services as a result of the pandemic. Mashreq supported this segment and others through initiatives including extended debt obligations, longer loan tenors, providing top ups for existing loans and delaying collection. “Throughout the crisis, our focus remained on providing our customers with as much financial flexibility as possible, by relaxing the terms and conditions around tenors and credit facility,” says Eisa. “A lot of this was ultimately possible thanks to the support that we in turn received from the Central Bank.”

Supporting through the challenges Nearly all companies, regardless of their size, have seen a shift in their financing needs as a result of the pandemic.

Refining the digital response In addition to the increased need for financing, companies in the UAE have also called for more responsive digital

Banking and Finance news in the MEA market

Hind Salim Eisa, Executive Vice President and Head of Services and Manufacturing at Mashreq Bank

platforms and increased access to expert advice, as they seek to respond to a significantly changed market. For instance, about 31 per cent of mid-sized companies called for more responsive digital platforms to facilitate their financial transactions. “It is convenient and costeffective for banks to conduct corporate customers’ transactions remotely, given the lesser reliance on physical branches, reduced human error, quicker turnaround time, etc,” says Eisa. “The entire process becomes more streamlined, both from a lender and borrower perspective.” But despite the demand for increased online services, the shift to digital processes is also the source of most anxiety for mid-sized companies. One third said that cyber security was their biggest pain point, while about one quarter said that the lack of tailored services was a significant problem. “Banks recognise the challenges and concerns facing our customers,” notes Eisa. “And with every digital strategy we implement, our first and foremost priority is always our customer.”

MARKET NEWS

NBK officially launches the New MX.3 Solution for its treasury and investments operations The new platform contributes to developing National Bank of Kuwait’s digital infrastructure and helps provide leading competitive treasury solutions, regionally and globally

reasury Group of National Bank of Kuwait (NBK) has announced the successful launch of phase one of the transformation of its Treasury and Investment systems to the advanced MX.3 platform in collaboration with Murex, the global leader in trading, risk management and processing solutions for capital markets. NBK’s Treasury Group earlier signed a contract with Murex to provide the bank with its integrated platform solution, MX.3. The new solution supports all day-to-day trading and risk management operations. It was first tested in Kuwait and Bahrain before going live recently. MX.3 provides innovative solutions across all activities related to frontto -back-to -risk management and processing. The solutions provided by the new platform cover the Dealing Ro o m , Tre a s u r y a n d I nve st m e nt Operations and Risk Management in Kuwait as well as all of NBK’s overseas branches and subsidiaries. On this occasion, Jad J. Zakhour, General Manager – Head of Treasury Group at National Bank of Kuwait, said: “The launch of the phase one of

the new MX.3 platform is in line with the steps we have taken over the past years to develop our front-to-back infrastructure and implement a fullfledged digital transformation across the Group, in an effort to provide the most competitive Treasury solutions, regionally and internationally.” The three-stage rollout of the new platform will support Treasury Group’s strategy to comply with existing and future regulations across all the markets in which the Group operates, as well as expand its product offering and price products more efficiently, he added. In phase one of the rollout of the MX.3 platform, the trading, operations and risk management solution went live for multiple asset classes in Kuwait and Bahrain, Zakhour noted. Zakhour explained that the MX.3 platform will allow NBK to build on its strengths as a key global player in providing Treasury solutions and supporting its regional customers, indicating that Treasury Group is working to develop its IT systems and infrastructure with the aim to improve customer service and thus increase customer satisfaction. “As one of the leading banks in the region, we will continue to capitalize

Banking and Finance news in the MEA market

on our global experience and profound market insight to provide top-notch products and services to our customers,” he added. For his part, Philippe Helou, Managing Partner and Co-founder at Murex, commented: “We are pleased with accomplishing the transformation of NBK’s Treasury and Investments system by finishing phase one of the MX.3 platform implementation. This milestone will strengthen our longstanding partnership with NBK and our continued efforts to accelerate its digital transformation roadmap, working closely to provide cutting-edge IT solutions.” “Murex is an experienced partner with a well-established track record of supporting financial institutions’ efforts toward excellence and innovation for the future by providing them with its most advanced IT platforms,” he added. Zakhour and Helou praised the collaboration between NBK’s business and support teams and Murex teams, which worked tirelessly over the past year to ensure a smooth and efficient transition to the new platform, despite the challenging context of COVID19, including business closures and remote working.

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Jersey - The Perfect

Eco-system for Alternatives The continued shift in regulatory demands together with a desire for greater diversity in asset management strategies is adding layers of complexity to cross-border investment – while at the same time, the unprecedented flux caused by the pandemic continues to impact global economies. As a result, Middle East investors are faced with multiple challenges and it is no surprise that, in times of such uncertainty, they are seeking familiar safe harbours to meet their alternative investment needs.

By An Kelles Director for GCC an.kelles@jerseyfinance.je

Faizal Bhana Director Middle East, Africa and India faizal.bhana@jerseyfinance.je

Jersey has a long history of supporting the private wealth structuring requirements of high-net-worth investors and ultra-high net worth families in the GCC. Its 60 years’ experience in the financial services sector, robust regulatory and legislative regimes, Shariah-compliant offering and 14,000-strong specialist workforce have made it an attractive jurisdiction to work with. Now, this solid framework is making Jersey a natural choice as those same investors look to meet their alternative fund investment objectives. Recent figures show that the value of funds business managed through Jersey rose to a record high of US$535bn in 2020, reinforcing Jersey’s appeal as a safe location for institutional capital, as investors have sought resilient, stable, robust, transparent and straightforward fund structuring options to continue to generate returns. Forward-thinking initiatives like the Jersey Private Fund (JPF), a product offering small numbers of sophisticated investors quick regulatory approval, have added to Jersey’s attraction, especially given their suitability for impact investing and co-investment amongst family offices. This offering set alongside Jersey’s global distribution capabilities puts the jurisdiction in a strong position to meet Middle Eastern investors’ strategic and global needs. UK

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FRANCE

WEALTH MANAGEMENT & PRIVATE BANKING

Changing times To adapt to the shifting operating environment, wealth management firms are already investing in innovation, delivering new digital products and services to their clients

Banking and Finance news in the MEA market

he outbreak of COVID-19 created some exceptional challenges for all industries. In wealth management and private banking, the pandemic is driving preexisting trends by changing the way wealth managers deliver advice and serve their high-net-worth individual (HNWI) clients. BlackRock stated that the pandemic is accelerating digitization of processes and c lie nt propos it ion s, a sh ift towards centralized portfolio and risk management amid increasing focus on responsible investing while emphasizing the role of wealth managers in supporting socio-economic ecosystems.

Wealth managers are being confronted by the task of balancing the traditional approach to risk management with the need to respond quickly to a crisis that has created massive changes to their operating environment. The current operating environment is putting to test wealth managers’ digital transformation plans, and, in some cases, the situation is forcing wealth management firms to revisit their priorities and introduce new services with new products to survive. To adapt to the changing times, Deloitte said that some wealth management firms are already investing in innovation, delivering new digital products and services to their clients. Before the arrival of coronavirus, several private banking apps that were unveiled by banks including Emirates NBD, Credit Suisse and Ahli United Bank Kuwait have been hailed for user experience and servicing capabilities, offering digitally empowered advice. It is innovations like these that are driving wealth management organizations to calibrate their business models. Deloitte urged wealth technology (wealth-tech) managers, who are spearheading this change, to consciously eradicate working silos to foster enhanced top-down collaboration, innovation and alignment across the organization to best serve its clients. According to EY, HNWI clients are more likely to re-evaluate and move their assets during major life events and the outbreak of the pandemic is no exception. In the Middle East region, 75% of clients reportedly move their wealth when starting a new business, 73% make the shift when acquiring a new property while 60% reconsider their asset management when inheriting or receiving money. HNWIs in the Middle East are equally likely to switch wealth asset management providers for any reason including quality and reputation, services and products, advisory capabilities, personal attention, pricing, or technology. The success of e-commerce platforms and super apps is demonstrating the power of personalized and curated

SUSTAINABLE INVESTING HAS RAPIDLY GROWN AND EVOLVED OVER THE PAST FEW YEARS, WITH THE VALUE OF GLOBAL ASSETS APPLYING ESG DATA FOR INVESTMENT RETURNS ALMOST DOUBLING IN FOUR YEARS TO $40.5 TRILLION LAST YEAR – Capgemini

content. McKinsey & Co. said that private banks should tap into this success to personalize the content and advice experience delivered across channels and not just during the periodic bank re l a t i o n s h i p m a n a g e r d e l i ve re d advice process – as has been the conventional approach. Middle East family offices are playing a particularly significant role in the region’s economic diversification effort to enable sustainable growth, and the sector’s growth is high on both the private and public agendas. The success of family offices, that have grown into conglomerates investing across diversified portfolios, is also minting a new crop of young of HNWIs across the region. Middle Eastern businesses are well placed to profit from being valuesdriven companies, said PwC.

Digitalization drive American management consulting firm Oliver Wyman said that after 2019 capped a golden decade of growth for the wealth management sector, the pandemic crisis unveiled a different reality. Ac ros s t h e f i n a n c i a l s e r v i c es providers, the ability to swiftly innovate and effectively meet client expectations while capture future growth segments is turning into a core asset. Deloitte said that for wealth-tech managers looking to innovate by digitalizing their services and products, adding a digital layer over existing business processes is not good enough.

According to industry experts, digital transformation in wealth management must be fostered by integrating skills in innovation, human-centered design, digital technology, risk and overall leadership. It is worth noting that just like any other banking product digitalization within wealth management span the entire value chain from client onboarding to relationship management, investment recommendations, and fulfillment and trading. “The use of innovative technology in financial services has been pervasive ever since Fintech took over more than a decade ago,” said Christophe Lalandre, Senior Executive Officer, Bank Lombard Odier & Co Ltd. “The pandemic has only accelerated this trend, as wealth managers have needed to adapt, update and innovate to cater to evolving investor needs for greater speed, sophistication and customization,” he added. We a l t h m a n a g e m e n t f i r m s’ digitalization journey should be a holistic approach that makes clients the focal point for product roadmap through the assessment of customer segments and the overall value chain – this is to determine which customer touchpoints need to be kept in-person and which can be made more self-serve. Furthermore, the growth of “automated wealth managers” or Robo-advisors is also revolutionizing the wealth management industry with unprecedented force. By mea-finance.com

WEALTH MANAGEMENT & PRIVATE BANKING

leveraging algorithms to offer financial advice for a fraction of the price of a real-life client advisor, Robo-advisors are growing at a rapid pace, doubling their assets under management (AUM) every few months. “We have seen a very discernible shift in the way investment content is produced and consumed. Slide decks and white papers are increasingly becoming a thing of the past and there is a clear demand for bitesize, interactive, and informative content,” said Sherif ElHaddad, Executive Director, Asset Management at Al Mal Capital. The Middle East wealth management market has undergone a dramatic shift long before the outbreak of the pandemic as regulators embrace Roboadvisors or digital financial advisories. In 2019, the Central Bank of Bahrain, issued directives on Robo-advice as the country affirms its position itself as a leading digital financial hub. The Saudi capital market regulator gave two firms, Wahed Capital and Haseed Investing Company, the green light to test their digital financial advisory services as the kingdom adopts financial technologies as part of its economic diversification drive. “Robo-advisors translate client input into investment logic such as risk or liquidity factors and propose adequate investment opportunities well beyond simply highlighting a handful of ETFs out of a few thousand of possibilities,” said Deloitte. In the UAE, the Abu Dhabi Global Market’s Financial Services Regulatory Authority issued its regulatory framework for digital investment managers operating in the financial hub. The move was hailed by rating agency Moody’s which said it safeguards systemic stability through a well-regulated environment for fintechs. Commercial Bank of Dubai also unveiled its Robo-advisory app CBD Investr in April. The platform offers the bank’s clients access to globally diversified and personalized portfolios of stocks, bonds, and other asset classes using low-cost exchange-traded funds.

Middle East HNWI population increased by 9.3% in 2019, wealth soared 10.2% to $2.9T Source: Capgemini

Family offices Family office businesses in the Middle East make up a sizeable proportion of the region’s non-oil economy and in these challenging times the need for adaptability and action to ensure that potential isn’t wasted, and the future is secured has never been paramount. Deloitte said that the pandemic crisis has dramatically shifted the operating environment, creating major challenges and for some, unique opportunities across the entire family offices ecosystem. Family offices continue to be a driving force behind growth in the region and Capgemini World Wealth Report 2020 highlighted that the size of the HNWI

Banking and Finance news in the MEA market

population in the Middle East soared by 9.3% in 2019, while their wealth expanded by 10.2% to $2.9 trillion. PwC said that sustainable growth depends on how well these HWNI navigate these treacherous waters and many wealth managers in the Middle East intended to adjust to this new normal. A survey that was conducted by Deloitte last September showed that the focus on developing talent within regional family offices while preparing the Next Generation appears to have been effective with a total of 14% believing their NextGen was ready to take the reins now and a further 50% deemed ready within the next five years. Having said that families which held diverse portfolios and were well prepared in areas such as governance, and cash flow management seemed to be weathering the COVID-19 storm well. The arrival of the pandemic has also exposed some family businesses to strategic and operational deficiencies. PwC said that many family office leaders in the Middle East intend to adjust to this next normal while others are taking stock of their business portfolios and operating structures to figure out ways to become leaner and maintain a competitive edge.

Given the sheer size of regional family offices, whose size is reportedly on average double that of their UK and US counterparts, their businesses need to grow by double digits for future generations to maintain the wealth and the same standard of living, which pose a colossal challenge for them. Succession planning also continues to be a challenge for family offices globally. However, this is particularly problematic in the Middle East where large families are more common and many of these relatively younger businesses face succession issues for the first time. Wealth managers believe that founders of family offices in Kuwait and Saudi Arabia are more experienced in handling the transition of power, it is evident that they learn from previous mistakes and are doing more to avoid repeating them. The succession problems have been around for the last five years and are expected to remain a challenge for the next 10 years. However, Middle East family offices are increasingly adopting policies and procedures for succession, though these do not necessarily include key documents such as family constitutions or conflict resolution mechanisms, hence there is still much work to be done. To ensure that wealth is being preserved and that there is a smooth transition between generations, establishing family

“ROBO-ADVISORS TRANSLATE CLIENT INPUT INTO INVESTMENT LOGIC SUCH AS RISK OR LIQUIDITY FACTORS AND PROPOSE ADEQUATE INVESTMENT OPPORTUNITIES WELL BEYOND SIMPLY HIGHLIGHTING A HANDFUL OF ETFS OUT OF A FEW THOUSAND OF POSSIBILITIES – Deloitte

protocols to regulate succession and conflict resolution is critical.

Evolving landscapes As the operating environment is evolving, analysts said that wealth management firms must remain on top of current trends if they are to capitalize on market opportunities. The shift in investor demographics has been noted as one of the prevalent changes in the wealth management sector in recent years. Deloitte said that the emergence of millennial investors, shifting demographics, increased regulatory burdens, new business models and heightened competition will all come together and compound the level of disruption in the wealth management sector. Though the concept of environmental, social and governance (ESGs) had gained

AS ESG CONCERNS CONTINUE TO PROLIFERATE ACROSS THE WORLD, ESPECIALLY AS INVESTORS EMBRACE NEGATIVE SCREENING TESTS ON INVESTABLE COMPANIES, APPETITE FOR ENVIRONMENTALLY FRIENDLY STOCKS RISE, WHILE THAT FOR THOSE THAT ARE COMMODITY-BASED DECLINES – Sherif ElHaddad Executive Director, Asset Management at Al Mal Capital

ground before coronavirus, the outbreak of the pandemic further accelerated sustainable investing forcing wealth management firms to build capabilities to cater to the increasing demand. “As ESG concerns continue to proliferate across the world, especially as investors embrace negative screening tests on investable companies, appetite for environmentally friendly stocks rise, while that for those that are commodity-based declines,” said ElHaddad. In its report, Wealth Management Top Trends 2021, Capgemini said that sustainable investing has rapidly grown and evolved over the past few years, with the value of global assets applying ESG data for investment returns almost doubling in four years to $40.5 trillion last year. “Sustainable finance and investment in green assets – such as green bonds or equity-related investments with a focus on climate transition or net-zero carbon emissions– has risen in prominence following the pandemic,” said Lalandre. Similarly, hyper-personalized offerings are expected to aid wealth management firms to address HNWI’s evolving needs and expectations while retaining highpotential customer segments at crucial transition points. Capgemini stated that HWNI clients expect best-in-class services at various customer touchpoints such as personalized updates about new products/services as well as receiving informative market updates. mea-finance.com

WEALTH MANAGEMENT & PRIVATE BANKING

Sustainable Growth Christophe Lalandre, Senior Executive Officer, Bank Lombard Odier & Co Ltd, while describing the region as well placed to capitalise in emerging trends, he also discusses the current concerns of the region’s HNWI’s, telling MEA Finance that clients, while desiring diverse portfolios and liquidity, are also moving the market into more sustainable growth and ESG based investments

Banking and Finance news in the MEA market

OVID-19 has proved that digital is no longer an option. How quickly do Wealth Managers in the Middle East and Africa need to adapt to this new digital-first reality?

We are in a digital-first economy and technology continues to play a pivotal role in the investment process – both for investment managers and end investors. Adapting to a tech-centric market must be a priority for wealth managers. The use of innovative technology in financial services has been pervasive ever since fintech took over more than a decade ago. The pandemic has only accelerated this trend, as wealth managers have needed to adapt, update and innovate to cater to evolving investor needs for greater speed, sophistication and customisation. It is the duty of wealth managers to ensure the latest and most efficient digital products and services are embedded within their organisations, to meet these new demands, for a client base that is becoming more discerning than ever before. As a Wealth Management firm, our duty is to provide our clients with the bestin-market tools and expertise to enable investors to make the most prudent investment decisions to meet their objectives. To achieve this, technology plays a critical role. By having the right products in place, we can equip our clients with the granularity of insights and depth of knowledge they need to make the right choices. This not only allows us to stay competitive today, but also to best serve the needs of future generations of investors who will be the driving force behind preserving and growing the assets of their families and businesses.

Christophe Lalandre Senior Executive Officer, Bank Lombard Odier & Co Ltd - Abu Dhabi Global Market Branch

SHARI’AH PRINCIPLES SHARE MANY VALUES IN COMMON WITH SUSTAINABLE INVESTING AND IS ALIGNED WITH SEVERAL OF THE SAME SOCIAL AND ETHICAL PRINCIPLES

with access to our deep expertise and market-leading counsel, leveraging more than 220 years of financial services pedigree. We understand the region well, and it has always been our top priority to engage with our clients, and inform them of all our investments and services, as well as new trends that will positively enhance their portfolios. We are acutely aware of the major priorities in the region, whether it be the challenges that local investors are seeking to overcome, or the opportunities to which we can direct them, for more sustainable, risk-weighted long-term growth. For example, as we have learnt from years of engaging with clients in the Middle East, investors are seeking to diversify their assets, in order to maximise new areas of wealth generation, whilst remaining prudent and managing risk. This is exactly what we have been offering in the local market in recent years. mea-finance.com

WEALTH MANAGEMENT & PRIVATE BANKING

Providing our regional investors and clients with access to more diversified assets and a broader range of investment opportunities across various – and more liquid – asset classes in different geographies has been the key to our success in the region. It is how we keep our clients constantly engaged.

For investment strategies, what are the leading concerns of HNWI’s in the region at this time? Change breeds innovation, something we have seen particularly with the rise in interest in environmental, social and governance (ESG) and sustainable investing. Sustainable finance and investment in green assets – such as green bonds or equity-related investments with a focus on climate transition or net zero carbon emissions– has risen in prominence following the pandemic. We are seizing the opportunity to invest in a circular economy, leading our clients towards sustainable investment strategies. Increasingly, investors are considering the environmental and social impact of their investment decisions – a new model of allocating capital that targets not just growth, but sustainable growth. This new model of investing fits our core conviction in our global economy’s current shift to a circular, lean, inclusive and clean (or CLICTM) economy. We strongly believe the region is well-placed to capitalise on this emerging trend and is differentiated compared to other markets. For many HNWIs, Islamic finance can offer a useful means of gaining access to sustainable investment strategies. Shariah principles share many values in common with sustainable investing and is aligned with several of the same social and ethical principles. Th e re i s t h e refo re a c o m p e l l i n g opportunity in the Middle East for investors to look to Islamic finance as a means to create a more sustainable investment portfolio. The economic,

social and environmental upsides can be clearly seen.

How are regional jurisdictions developing in terms of succession planning and inheritance? Succession planning is, and will always be, a core priority for regional investors. Regulations often differ from jurisdiction to jurisdiction, creating challenges for investors. In order to get ahead of the curve and avoid issues that can arise, institutions must find solutions early, and not after the stepping down or the demise of the family in question’s patriarch. Whilst regional jurisdictions such as the ADGM and DIFC are very efficient in managing the transfer of local assets, institutions need to adopt

operating in the region for a long period of time usually have a well-established network within the industry, which helps and supports the recruitment process. However, as with any industry, great talent is always in demand. At Lombard Odier, we are privileged to enjoy a wellestablished and well-regarded brand, which attracts ambitious wealth and relationship managers from across the region. At the same time, our extensive international network means we can also draw upon expertise and talent in global markets outside the region to target and attract the very best personnel. This is a major competitive advantage and aligns with our clientcentric mantra to provide the very best investment advice and service, tailored

AT LOMBARD ODIER, WE PROVIDE OUR INVESTORS WITH ACCESS TO OUR DEEP EXPERTISE AND MARKET-LEADING COUNSEL, LEVERAGING MORE THAN 220 YEARS OF FINANCIAL SERVICES PEDIGREE

a personal approach in order to address different client needs and demands and assess on a case-by-case basis. Tra n s m i s s i o n of we a l t h f ro m generation to generation is a key concern of investors in the GCC countries and Lombard Odier’s platform is perfectly well equipped to address this request.

With the current growth in the market, how challenging is it to source and retain experienced wealth managers and relationship managers in the region? Financial institutions which have been

Banking and Finance news in the MEA market

to each of our clients’ specific needs. We are also firm believers in supporting and investing in our team, and we do so by nurturing our employees, providing t h e m w i t h rewa rd i n g l o n g - te r m career opportunities. This emphasis has resonated well in our regional recruitment strategies over the last 50 years, as we continue to grow and evolve our business. For wealth managers to be successful in the region they need to attract and retain the very best talent, and this can only be achieved by being a progressive employer and having a long-term recruitment strategy.

Specialised attention to changing needs Dinesh Sharma Head of Consumer Bank, ME Region for Citi, explains that while the best post-Covid opportunities may have peaked, attention to the specific customers needs and appropriate adoption of technology, will be key to providing superior service

OVID-19 has proved that digital is no longer an option. How quickly do Wealth Managers in the Middle East and Africa need to adapt to this new digital-first reality?

Wealth Managers have been enabling “banking on the go” for clients even before the pandemic, which accelerated digital adoption from a customer perspective. While the pace accelerated, enabling more digital experiences and straightthrough processes, we remain mindful in this transition, understanding the customer journey, their preferences and perceptiveness to digital as an alternative or go-to channel. The approach should be a personalized data-driven engagement bringing a holistic experience of advisory, insights, and wealth solutions. We believe that for Ultra High Net Worth Customers, specialized advisory, relationship management and tailor-made wealth solutions will remain a key driver of customer preference for the foreseeable future while for others it will move towards a hybrid channel engagement/experience model. Sooner rather than later, digital wealth solutions will be more widely used and leveraged by customers, especially the digital native generation.

As the more digitally native gain wealth and move into more prominent positions in their business and families, what are you doing to keep them engaged with your products and services? We constantly evaluate our core value propositions and product offerings ensuring the relevance, suitability and competitiveness to this segment and done significant market research to better understand their needs, wants and aspirations. The data and insights are very important as we use these to customize and tailor the communication, creative tone, wealth solutions and delivery. Equally important is a deeper understanding of their life-stage and being present where they live, work and play, raising top of mind awareness and preference.

For investment strategies, what are the leading concerns of HNWI’s in the region at this time? COVID changed the world economy, largely via adaptations made to cope with pandemic restrictions. Additionally, the macroeconomic management and scale of government involvement may have changed for the long run. In the coming quarters, with a strong multi-year recovery ahead, some of the key concerns of HNWI

Dinesh Sharma Head of Consumer Bank – ME Region

remain around the fact that the strongest “bounce back” investment returns have already been earned, with some of the lowest quality assets leading the way and while certain sectors and national markets still offer mean reversion potential, the range and scope of opportunities is narrowing. We believe that focusing on portfolio quality, positioning the asset allocation for “mid cycle” conditions and exposure both to assets that still have untapped recovery potential and to reasonable long term growth assets might be something that HNWIs should consider

With the current growth in the market, how challenging is it to source and retain experienced wealth managers and relationship managers in the region? While there appear to be challenges of supply vs demand at an aggregate level, experienced wealth and relationship managers are looking for institutions providing visibility as to long term viability, and growth. Therefore, within the available pool of talent, the well-established institutions, with commitment to the region, have less of a challenge as there is a “flight to quality.” The challenge may be more of availability of talent that is comparable to other major financial centres in the world. Significant strides have been made in improving the standards of the wealth management industry and this should help growing and retaining top tier wealth talent in the country. mea-finance.com

WEALTH MANAGEMENT & PRIVATE BANKING

A wealth of change Legislative overhauls, adapting to overcome the pandemic, advancement in digital solutions and shifting production and consumption of investment content are among some of the influences that are changing wealth management in the region. Sherif ElHaddad, Executive Director, Asset Management at Al Mal Capital takes time with MEA Finance to provide an overview of the current wealth and portfolio management environment.

OVID-19 has proved that digital is no longer an option. How quickly do Wealth Managers in the Middle East and Africa need to adapt to this new digital-first reality?

Wealth managers and investment professionals in Middle East and Africa, much like the rest of the world, have adapted to and begun to overcome the pandemic. From a business continuity standpoint, a big part of that adaptation was helped by the advancement of digital solutions. By nature of the business, which includes investing in different jurisdictions, meeting management teams and interacting with other market participants is of utmost importance. The development of web-based meeting platforms ensured the ability of fund managers to retain an open dialogue with corporates in order to continue to make informed decisions. Investment committee meetings also see a degree of higher reliance on digital elements, such as digital presentations, pitch books, and investment theses, while also dialing in team members from around the world while sharing screens. With this also

Sherif ElHaddad, Executive Director, Asset Management

Banking and Finance news in the MEA market

comes greater efficiency, as less time is wasted on the road or in an airplane, combined with lower travelling costs that can be re-appropriated elsewhere within the organization. Nevertheless, higher reliance on digital elements do not come without caveats. It is proving a tad more difficult to build rapport with new faces and open new doors. This tends to make individuals more inclined to remain within their existing network as opposed to winning new business, which can pose a hurdle to AUM growth.

As the more digitally native gain wealth and move into more prominent positions in their business and families, what are you doing to keep them engaged with your products and services? We have seen a very discernible shift in the way investment content is produced and consumed. Slide decks and white papers are increasingly becoming a thing of the past and there is a clear demand for bite size, interactive, and informative content. We are leveraging social media platforms to engage with our client base, and open new doors with a wider audience, creating appeal for our products and services. At Al Mal we are fully embracing the new digital age by using online investment platforms to allow investors from around the world to access key feature details of our products and services in a stream-lined format, as opposed to relying on extensive documentation processes.

For investment strategies, what are the leading concerns of HNWI’s in the region at this time? The region’s main market Saudi Arabia has had a strong run so far, largely bolstered by oil prices. As ESG concerns continue to proliferate across the world, especially as investors embrace negative screening tests on investable companies, appetite for environmentally friendly stocks rise, while that for those that are commodity-

based declines. However, we see more concern in the fixed income space as federal reserve uncertainty coupled with streams of macroeconomic data implying an overheating economy is forcing investors to take stock and reassess their allocation. We remain constructive on equities in the medium term, as we see an earlier than expected transition to a hawkish fed. Furthermore, the stellar performance of technology names, particularly in mature markets during the pandemic, has not gone

to grow the expat population. Late last year the UAE government announced new legislation for inheritance through which foreign residents could apply laws of their own country to deal with their personal estate. Prior to the change, the Sharia law of Inheritance was applied to these expatriates’ estates unless specified legally. With aspirations to double population growth in Dubai, we remain constructive on the UAE to attract new talent and bolster its population base going forward.

HOWEVER, WE SEE MORE CONCERN IN THE FIXED INCOME SPACE AS FEDERAL RESERVE UNCERTAINTY COUPLED WITH STREAMS OF MACROECONOMIC DATA IMPLYING AN OVERHEATING ECONOMY IS FORCING INVESTORS TO TAKE STOCK AND REASSESS THEIR ALLOCATION.

unnoticed, and as the world continues to embrace technology, investors continue to allocate sizeable portions of their portfolio to tech-based companies. Naturally, given the region’s comparably thin bucket of investable tech-based companies, investors are finding it more difficult to justify allocation towards the region.

How are regional jurisdictions developing in terms of succession planning and inheritance? There has been a regional legislative overhaul as countries modernise their legal systems in order to meet the demands of today’s society. Nowhere is this more pertinent than the UAE itself, where the government has very astutely used legislative overhauls as a means

With the current growth in the market, how challenging is it to source and retain experienced wealth managers and relationship managers in the region? Attracting and keeping talent has always been a challenge in the region and in this industry, however we have been successful in building out our team with experienced relationship and portfolio managers, and this is a testament of our meritocratic system. We offer a dynamic work environment where everyone is on an exponential learning curve, growing in terms of responsibility and remuneration. We promote open dialogues between te a m m e m b e rs to h e l p t ra n sfe r knowledge around, while maintaining a transparent structure. mea-finance.com

DIGITAL TRANSFORMATION IN BANKING

Banking in the future Digitalization in the banking sector is swiftly changing the field of play where incumbents are facing increasing competition from nontraditional entrants who are billing on customer experience as their point of sale

hough digitalization was already apparent across the Middle East financial services sector, the outbreak of COVID-19 in 2020 accelerated the rate of digital transformation to record highs as the pandemic had a monumental impact on consumer behavior. McKinsey & Co. said that the coronavirus crisis has reshaped the global economy and society as banks face an urgent imperative to reimagine their business models amid a shift in the operating environment which is having an unprecedented impact on their bottom line. Digital transformation has been a key battleground for banks in the Middle East region – a competition

that was intensified by the outbreak of the pandemic. Although 2020 was a challenging year for all industries, it presented an opportunity for the global financial service sector to accelerate and strengthen the digitalization of complex processes and end-to-end customer journeys across the front, middle and back offices, a trend that was already in full throttle across the region. “The next three to five years will also see an exponential increase in the volume of data generated through a more digitally native demographic and which will require advanced data science capabilities, powered by artificial intelligence, to generate

Banking and Finance news in the MEA market

customer insights and interactions, such as the use of bots to provide basic banking services,” said Dan Robinson, Head of Wealth & Personal Banking at HSBC UAE. Banks in the GCC region are exploring technological innovations and new business models that include digital banking, open banking, predictive banking, and modernization of payment systems as they seek to enhance user experience (UX) and personalization of products while they keep an eye on increasing cybersecurity concerns. Following the outbreak of the coronavirus, the Middle East region’s digital payments volumes skyrocketed, reportedly generating as much as 10 years’ worth of growth across B2C, B2B, and P2P spaces in just over 12 months. PwC said that digital payments, once a convenience, have become a necessity in these times. Similarly, aside from being a powerful enabler of transformation in how banks handle their customers’ financial information while putting control back in their hands, open banking is driving competitiveness in the financial service industry across the GCC region. “Open

banking is a platform-based business approach where data, processes, and business functionalities are made available within an ecosystem of customers, third-party developers, fintech startups, or partners,” said Deloitte. The emergence of new technologies is offering the financial services sector a window to be more innovative and efficient in-service delivery, but it is also opening the door to new entrants such as fintechs, global retail giants as well as card networks and neobanks.

The future is open The COVID-19 pandemic is shaping up to be a crucial turning point in the financial service sector, changing regulators’ perception towards open banking. PwC said that opening banking has the potential to reshape the financial services landscape and several financial centers in the emerging markets, the GCC region included are making considerable moves in this space. 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 to the region. By leveraging API, a set of communication protocols used to develop computer applications, open banking platforms authorizes retail and enterprise clients to access consumers’ financial data in realtime and share account information and transaction history with external parties such as vendors, suppliers, business partners and other banks. KPMG said that it expects a rapid uptake of open banking approaches and models over the coming few years as consumers and small to medium enterprises (SMEs) are becoming more aware of the benefits it can bring – the ability to quickly understand their financial position, explore alternatives and make better financial decisions. The Gulf region financial service sector is unarguably mature when it comes to regulators’ preparedness

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

for open banking compared to other emerging markets though there are some teething problems such as the need to modernize the regulatory landscape. In October 2020, Bahrain unveiled its Open Banking Framework which provides a holistic definition of the country’s open banking regulation, guidelines, technical standards for Open API platforms, security standards (including data privacy), and overall governance. In the UAE, PwC said that new open banking platforms are rising with fintechs and lenders moving towards the adoption of open API solutions amid the defining of the roadmap towards open financial markets by national and offshored regulators. 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. Crossing the border into Saudi Arabia, the central bank also introduced its open banking framework earlier in 2021, a move that is expected to revolutionize how customers, merchants and financial services providers enhance the value they reap from accessing financial data. Saudi Arabia is investing in the development of its financial services sector as part of the kingdom’s economic diversification drive under Vision 2030. Open banking will enhance trust between customers, banks, fintechs and

other financial players, and the Saudi Central Bank (SAMA) plans to go live with open banking during the first half of 2022. However, amid these developments, KPMG said that the challenge facing policymakers and regulators is how to structure an open banking regime that balances the need for innovation, information security and privacy, and does not inadvertently create an uneven playing field for both traditional and nontraditional players.

Bank of tomorrow Digitalization in the banking sector is swiftly changing the field of play where incumbents are facing increasing c o m p et i t i o n f ro m n o nt ra d i t i o n a l entrants who are billing on customer experience as their point of sale. For several regional lenders, business is no longer about the products and services on offer but enhancing UX. The outbreak of the pandemic has brought about more than decades worth of changes in the way banks do business in just a few months. “Listening to customer feedback is critical to ensuring we create the right personalized experiences to help them achieve their ambitions here in the UAE,” said Robinson. “Digital transformation is no longer a luxury, but a necessity. Banks that are agile, flexible, and willing to transform their business models will be the ones that succeed, and secure their financial strength for future growth,” said KPMG. The UAE’s first independent digital banking platform, YAP, was unveiled in mea-finance.com

DIGITAL TRANSFORMATION IN BANKING

March. Other neobanks that are expected to launch soon include Zand, the first Shari’ah-compliant digital-exclusive bank, while ADQ is also considering setting 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. In September 2019, Mashreq Bank and Emirates NBD launched digitalexclusive banks for SMEs, NeoBiz and E20 respectively, in a bid to support one of the UAE’s important sectors. The unveiling of digital banks for SMEs came exactly two years after both Mashreq Bank and NBD unveiled Mashreq Neo and Liv., lifestyle digital-only banks that seek to meet the banking needs of millennials. While in Bahrain, Bank ABC launched ‘ila Bank’ in 2019 – an AI-powered and data analytics digital-exclusive bank. ila Bank is expected to launch its services in Jordan this year before it expands into Egypt, and it also started offering credit cards and loans to Bahraini customers in March.

Digital payments The pandemic crisis and its related economic fallout have undoubtedly accelerated a string of existing trends in both consumer and business behaviors while introducing new developments that saw the use of digital payment methods surpassing the use of cash and debit cards. A Middle East consumer survey that was conducted by Mastercard last August revealed that 70% of the participants are using some form of contactless payment method since the outbreak of COVID-19 due to safety concerns while 81% of the respondents noted that they would continue using digital payments post-pandemic. “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. Globally, payments remain one of the best performing financial services products but unfortunately for banks –

DIGITAL TRANSFORMATION IS NO LONGER A LUXURY, BUT A NECESSITY. BANKS THAT ARE AGILE, FLEXIBLE, AND WILLING TO TRANSFORM THEIR BUSINESS MODELS WILL BE THE ONES THAT SUCCEED AND SECURE THEIR FINANCIAL STRENGTH FOR FUTURE GROWTH. – KPMG

the traditional providers of payments services – this momentum is no longer extending to most of them, especially in these challenging times. Technology giants, fintechs, merchants and social media giants have all created their digital payment offerings. “The payments landscape is constantly evolving in the UAE and around the world. The UAE is already a digital first payments and transfers market, which has caught the attention of global and UAE based fintechs who are launching mobile led experiences,” added Robinson. For banks to maintain their position in the payments sector, 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.” Analysts believe that curving out payments as a stand-alone business entity for example in the case of Emirates NBD’s Network International 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. In April, First Abu Dhabi Bank completed the carve-out of its payment division into a stand-alone operational entity called ‘Magnati’. Aside from its payment services, Magnati seeks to provide enhanced capabilities to partner with fintechs on product and service innovation. To adapt to the changing operating environment while maintaining a

Banking and Finance news in the MEA market

competitive edge in a congested market, payment services providers across the GCC must understand the needs and expectations of their customer base. Accenture said that as the payments market expands, customer experience is becoming the prime competitive differentiator. Boston Consulting Group and Swift expect the global digital payment sector’s revenues to hit the $1.8 trillion mark in 2024, from $1.5 trillion in 2019, buoyed by the continued transition away from cash, sustained strong growth in e-commerce and electronic transactions, and greater innovation. T h e c o ro n a v i r u s c o nta i n m e nt measures that were introduced by regional governments shifted consumers and businesses toward e-commerce platforms making it vital for financial service providers to offer seamless payment solutions. The ongoing shifts toward e-commerce, digital payments (including contactless), instant payments, and cash displacement have all been significantly boosted in the past six months, said McKinsey. The Gulf region financial service sector’s digitalization drive is partly self-motivated. Regional banks are proinnovation and industry experts see them continuing to dominate the Middle East banking landscape as the sector goes more digital. The banks’ tech-savvy customers and regulatory initiatives such as regulatory sandbox and open banking are also expected to accelerate the digital transformation.

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DIGITAL TRANSFORMATION IN BANKING

Forward thinking

s ra p i d te c h n o l o g i c a l changes are taking place across the Middle East banking industry, what are your bank’s digital transformation strategies? At HSBC, we are digitising at pace. We are harnessing technology and data to create exceptional customer experiences and take the hassle out of everyday banking. Our top priority is to generate value for our customers, colleagues and shareholders in a sustainable way. Our customers expect digitally enabled services wherever they are and whenever they need them. Our strategy is to create a “bank-in-your-pocket” for our customers. To deliver on this strategy, we are making it easy for customers to manage their money on their mobile in just a few taps. Whether they are sending money around the world, looking to access credit or monitoring their investment portfolio, our customers will have full access to a personalised range services and products in their pocket. The support and expertise of our people will be critical to help customers understand the services available to them.

HSBC is digitising speedily, launching innovative products and easing clients pain points. Dan Robinson, Head of Wealth & Personal Banking at HSBC UAE shares their experience as a modernday bank keeping pace with the quickening change environment, while keeping an eye on the horizon for developments to come.

The world of digitalisation is evolving rapidly, how do you stay current on innovations and trends? We nurture a collaborative culture of innovation at HSBC. This involves staying close to our technology partners, our regulators, and the wider banking and technology industries. For example,

Dan Robinson, Head of Wealth & Personal Banking at HSBC UAE

Banking and Finance news in the MEA market

through partnerships with global tech companies, we are working to detect and prevent money laundering and financial crime using artificial intelligence and cloud computing power to analyse trillions of dollars of transactions and figure out which of those might be fraudulent in nature. This allows us, as custodians of our customers’ financial records, to provide a more secure banking environment. Technology also enables us to develop our relationships with our customers, deepening our understanding of how their needs are evolving, and ensuring that we are able to meet their expectations with personalized experiences.

How would you describe the evolution of the payments landscape in the region and how has it changed to reflect market demands? The payments landscape is constantly evolving in the UAE and around the world. The UAE is already a digital first payments and transfers market, which has caught the attention of global and UAE based fintechs who are launching mobile led experiences. COVID-19 has been a catalyst for people to incorporate digital ecosystems into their day to day lives. At HSBC UAE, mobile banking transaction volumes have increased by 61% in the last year. We are constantly developing new ways of making payments easier for our customers. Take the Global Money Account which we launched recently as an example. This allows HSBC UAE customers to access the world with one account in just a few taps. It takes only a few seconds to open, manage and send money globally in multiple currencies and in real-time through our mobile banking app. On the corporate banking side, HSBC UAE recently launched virtual debit cards, which is a first in the Middle East. The card generates single-use virtual card numbers, offering payment flexibility whilst helping with cash-flow forecasting and management.

Customers’ requirements and expectations are central to banks’ digitalisation strategies. How are banks in the region optimising customer feedback to maintain a competitive edge? Listening to customer feedback is critical to ensuring we create the right personalized experiences to help them achieve their ambitions here in the UAE. We need to understand the many places customers speak to us, and about us, to see what we are getting right but also where we need to do better. We use direct feedback channels, like our Net Promoter Score (NPS) survey on our mobile banking app, and indirect feedback channels like app store reviews and social media posts help us to prioritise new journeys and optimize the experiences we have.

How can GCC banks leverage digitalisation to explore new avenues of growth or new business models in the coming five years? We will see an increased focus on emerging technologies such as virtual and augmented reality, 5G, distributed ledger technology (DLT) and early use cases for quantum computing. The financial services industry is actively exploring central bank digital currencies – also known as CBDCs - that are based on DLT technology. The next three to five years will also see an exponential increase in the volume of data generated through a more digitally native demographic and which will require advanced data science capabilities, powered by artificial intelligence, to generate customer insights and interactions, such as the use of bots to provide basic banking services.

WE WILL SEE AN INCREASED FOCUS ON EMERGING TECHNOLOGIES SUCH AS VIRTUAL AND AUGMENTED REALITY, 5G, DISTRIBUTED LEDGER TECHNOLOGY (DLT) AND EARLY USE CASES FOR QUANTUM COMPUTING. We developed the “bank in your pocket” strategy after customers told us they wanted to do more banking on the go – and we are delighted with the response so far. We have seen the number of customers logging on to our mobile app increase by 45% since January 2020. We introduced a digital secure key following customer feedback that “the calculator” (our physical hard token) was a constant pain point. In the five months since its launch, 75% of hard token users have migrated to the new digital secure key. We also introduced a number of new features on our mobile banking app which has increased our app rating on the iOS app store has increased from 1.7* to 4.7* out of 5*.

It is critical that HSBC is at the forefront. We also see increasing partnerships with global technology players like Google and Amazon, as well as fintechs, to help accelerate solution offerings for our customers. We are already partnering with a number of fintechs to solve key customer pain points such as digital identity validation and authentication services for key experiences like digital account opening. HSBC works very closely with the global fintech ecosystem to explore the latest technology advances which could help us solve customer pain points and deliver exceptional customer experiences in the future. mea-finance.com

REAL ESTATE INVESTMENTS

BUILDING BACK STRONG

2021 ushers in hope The real estate sector has long been a core economic sector and investment of choice in the Middle East, supported by strong demand fundamentals from a solid population and GDP growth

Turning the tide

he double whammy of COVID-19 and low oil prices significantly jolted Middle Eastern economies, prompting comparisons with the 2008 financial crisis, but the increase in property prices has picked up a year after the outbreak of the pandemic. In a report, Irish market intelligence agency Research and Markets said that the global real estate market is expected to expand from $2687.4 billion in 2020 to $2774.5 billion this year at a compound annual growth rate (CAGR) of 3.2%. The real estate sector has long been a core economic sector and investment of choice in the Middle East region, buoyed by strong demand fundamentals from solid population and GDP growth, as well as excess liquidity from oil. The institute of Chartered Accountants in England and Wales (ICAEW) said that expectations of strengthening activity and soaring demand have lifted economic recovery sentiments while pushing oil prices up to $68 per barrel in late May – (up from a low point of $9 per barrel in April 2020).

– with plenty of attention being given to the grandeur of the many pioneering urban developments. When the coronavirus hit the global economy, governments and property developers enacted a broad range of measures to support their respective economies including rent relief for tenants and rent freezes to mitigate the fallout from the pandemic.

In the UAE, the Middle East tourism and business hub, S&P Global projected that a recovery in the residential property sector will be driven by a cutback of new supply by developers such as Damac Properties, low mortgage interest rates that are expected to encourage residents to buy rather than rent property and finally a plunge in property prices that makes investing in the sector attractive. Though the Middle East real estate sector is still in its emerging phase it has been rivalling the world’s leading markets such as London, Hong Kong and New York

Despite a supply glut that was building up even as demand was faltering, and a double whammy of COVID-19 and low oil prices, the GCC region property market led by Dubai is recovering from a six-year depression as wealthy international investors running away from pandemic-related curbs and HNWIs drive a buying frenzy to record highs while aiding economic recovery. “With a progressive government implementing policies to make it easier to live, work and potentially retire in Dubai, more professionals and entrepreneurs may consider the city as a base and invest in Dubai property as a result,” said Tim

WITH A PROGRESSIVE GOVERNMENT IMPLEMENTING POLICIES TO MAKE IT EASIER TO LIVE, WORK AND POTENTIALLY RETIRE IN DUBAI, MORE PROFESSIONALS AND ENTREPRENEURS MAY CONSIDER THE CITY AS A BASE AND INVEST IN DUBAI PROPERTY AS A RESULT – Tim Haywood Walton International Group

Banking and Finance news in the MEA market

Haywood, General Manager, Regional Vice President, Walton International Group Ltd. “Real estate has long been a core economic sector and investment of choice in the Middle East region, buoyed by strong demand fundamentals from solid population and GDP growth, as well as excess liquidity from oil,” said Strategy&. According to an AFP report, luxury villas are the hottest segment in the market, with European buyers seeking homes on Dubai’s signature man-made island Palm Jumeirah as well as golf course estates. In March, a mansion in the Middle East business and tourism hub sold for AED 111.25 million ($30.3 million) – the highest price reached in years in the luxury, said property listing agency, Luxhabitat Sotheby’s International Realty. In a research note, Morgan Stanley said that Dubai property prices are rising for the first time in six years amid higher demand from foreign investors and a slowdown of project launches since 2017. “Demand for residential real estate has picked up faster than expected, amidst a wave of government reforms over the past 12 months, attractive mortgage rates, and a shift in demand patterns due to COVID-19,” Morgan Stanley said.

A troubled industry However, despite a rebound in the Middle East property market, which saw UAE’s Emaar Properties reporting a fifth-month surge in sales, property companies’ profitability will likely remain under pressure amid a property glut and faltering demand that drove prices down by more than a third in December 2020. Last December, Dubai’s largest listed developer Emaar temporarily halted new projects amid after a construction boom in recent years led to oversupply and together with the coronavirus pandemic it was taking a toll on an already ailing sector. Emaar’s move to halt construction of new projects came on the heels of property moratorium calls by DAMAC Properties’s chairman. In 2019, the Dubai government was also forced to set up a committee to manage supply and

MANY ADVANCED ECONOMIES HAVE TAKEN A ‘WHATEVER IT TAKES’ APPROACH TO SUPPORT ECONOMIES, WITH ULTRA-LOW INTEREST RATES AND QUANTITATIVE EASING PROGRAMS. THESE LOW-INTEREST RATES WILL SUPPORT REAL ESTATE INVESTMENT INTO 2021 – Savills

demand as some of the city’s largest developers continued to build. In March, Emaar Properties said that it plans to buy back a 15% stake in its mall operations unit, Emaar Malls, at a 36% discount to the price it sold in 2014. valuing the business at $6.5 billion. Emirati billionaire Hussain Sajwani also offered to take over the rest of Damac Properties at a discount of nearly 45% to the developer’s local listing in 2015, through his investment vehicle Maple Invest Co Ltd. According to Bloomberg, “The trend may have repercussions for a market that’s struggling to sustain interest and risks depriving investors of exposure to one of the emirate’s crucial sectors.” In March, UAE’s Arabtec Holding revealed that it had submitted a bankruptcy petition to the Dubai Court almost six months after its shareholders agreed to liquidate the company. Creditors of Drake & Scull International, another property development firm, voted on its debt restructuring plan in April as the contracting company is on its path to recovery after a net loss of $24 million (AED 87 million) in 2019. While in Saudi Arabia, the country’s biggest construction company Saudi Binladin Group is now restructuring tens of billions of dollars of debt after the Saudi Arabian government took a 35% stake in the company. Global commercial real estate services firm, JLL, said that the coronavirus pandemic has accelerated certain trends and impacted many of the underlying demand drivers of the real estate industry.

Global property market Though vaccination programs are at differing stages around the world and countries are recovering at an uneven pace, property price rises have picked up speed over the last year. JLL projected a stronger second half of the year as pent-up demand starts to filter through the economy. The demand for home offices for employees who are working remotely since the outbreak of the pandemic is contributing to a surge in prices as unprecedented fiscal and monetary stimulus aimed at propping up economies in wealthier countries such as the US have poured more fuel on the fire. “Many advanced economies have taken a ‘whatever it takes” approach to support economies, with ultra-low interest rates and quantitative easing programs. These low-interest rates will support real estate investment into 2021,” said Savills. “An exceptionally strong housing market is likely to continue as low-interest rates and pent-up demand drive prices higher. The medium-term pressure will ease as supply chains recover from coronavirus and builders scale up operations,” said Haywood. The drive-in global office markets remain subdued, with Q1 2021 leasing volumes reportedly down by 31% compared to the same period last year. However, there are now tentative signs of an improving outlook with leasing activity in some parts of the world at pre-pandemic levels as countries are lifting COVID-related restrictions and companies are rearranging their operations as they look to return to offices. mea-finance.com

REAL ESTATE INVESTMENTS

Riding the rebound Speaking to MEA Finance, Tim Haywood General Manager, Regional Vice President, Walton International Group Ltd. said that the outbreak of the pandemic has accelerated demand in the residential sector, and national home builders have seen a significant jump in home closings and quarterly earnings Tim Haywood Walton International Group

s the global real estate sector is on the recovery path after last year’s fallout from the COVID19 pandemic, could you break down some of the properties you are working on at the Walton International Group?

We have been fortunate that the pandemic has driven a significant increase in the U.S. housing market with demand, fueled by a historically low-interest rate environment and work from home policies, continuing to outstrip supply. There have also been changes in the home building industry with a focus on ‘just in time inventory’ which has encouraged us to evolve our land investment model to suit both investors and homebuilders and align our interests. As a result, we are working on the acquisition of land assets in high-growth regions of the United States, with signed interest from public homebuilders who are keen to secure future development land inventory in markets where they are already active, to meet the increasing demand from homebuyers. One of these properties is Pinehill’s Trails located in the Atlanta MSA, Georgia; a 652-acre property currently approved for 1,300 single-family detached homes expected to be developed from 2022 –

2027 by two national homebuilders. One of the homebuilders is already selling homes in a master-planned community adjacent to the property, so it is a natural progression for them to move their activity onto this property. The interest from homebuilders at the time of our acquisition of the asset is important and goes a long way to validating the due diligence conducted by the Walton Group of Companies and our external partners before the asset acquisition. Our due diligence work is shared with the interested homebuilders and is crucial in securing this interest upfront while also

Banking and Finance news in the MEA market

helping to mitigate risk for our investment partners who are then able to see a pathway to the sale of the asset. In reference to Walton International Group’s plans for the next few years, are they set in stone, or are they beholden to which way the wind blows in the real estate market in the United States? As referenced above, our investment model has evolved in response to the changing U.S. homebuilding industry, and with this being ever-fluid, we will continue to adapt accordingly to different trends and opportunities. Today’s exceptionally strong

housing market is likely to continue as lowinterest rates and pent-up demand drive prices higher. The medium-term pressure will ease as supply chains recover from Covid and builders scale up operations. Nevertheless, underlying demand is likely to be buoyant for the coming decade as a generation of millennials reach their peak home-buying years and seek more space in the suburbs. In particular, locations with a lower cost of living, employment opportunities, lower taxes, good quality of life and better climates have seen an acceleration in demand since the pandemic. This, paired with our strategy which aligns our investors’ returns with the phased development and home sales activity of the homebuilders, is a model which is sustainable even if there is a slowing of home sales activity in the future. It is also worth noting that, unlike the last housing boom in the leadup to the sub-prime crisis and the real estate crash that followed, the typical warning signs of too much leverage in the market and over-supply do not exist today. With remote working and homeschooling likely here to stay, how are these trends driving investment in the US property market and do these trends differ from other real estate markets such as Dubai, Hong Kong, or London? The current US housing boom has been because of several factors, but the Covid pandemic has accelerated demand without question. With more and more of the U.S. population re-considering their options due to homeschooling pressures and work from home policies being adopted far more readily, young, millennial homebuyers are now ready to purchase their first or move-up homes in the suburbs. Their ability to move into good school districts, enjoy more space and not have to commute every day of the week is fueling demand outside of the city center locations where they were previously renting. Remote working and affordability trends in other cities such as London and to a lesser extent, Dubai, may see

similar outcomes, particularly in the case of London where home prices are extremely high. More and more young families may consider a move into outer suburban locations where space and quality of life are available and have become increasingly important. Having lived in Hong Kong for most of my working life prior to my move to Dubai in late 2019, it is a very different market, and the same forces are not necessarily at work due to the constrained land supply and lack of alternative residential options, although of course, price pressure will always drive any population towards relative affordability. In Dubai, the real estate headlines suggest that affordability, and a desire for more indoor and outdoor space, have fueled the market for Villa developments. With a progressive government implementing policies to make it easier to live, work and potentially retire in Dubai, more professionals and entrepreneurs may consider the city as a base and invest in Dubai property as a result.

provide the land inventory required, allowing the homebuilders to take it down on a phase-by-phase basis, and in turn, provide a cash flow model for our investors who benefit from annual distributions as the lots are delivered to the homebuilder and homes are built and sold.

How much has the United States real estate market changed since the outbreak of the pandemic and where do you see opportunities in the future? The pandemic has accelerated demand in the residential sector, and as a result, national homebuilders have seen a significant jump in home closings and quarterly earnings throughout 2020 and into this year. Single-family housing starts in 2020 totaled 991,000, an increase of 11.7% from the previous year and in Q1 2021, they were up 19.6% compared to Q1 2020. A longer-term, pre-pandemic trend that provides plenty of opportunities for the future has been the homebuilding industry’s move towards securing development land/lots through Option Agreements, rather than the traditional ‘land banking’ model of the past. This allows national homebuilders to align their land acquisition and home sales activity, thus allowing them to better manage their balance sheet exposure to long-term land assets. Working with these homebuilders, The Walton Group of Companies can

There has been an increase in Middle East investors snapping up real estate assets in North America and Europe, in your view what is driving this appetite for investment in these regions? Middle East investors, like any others, are always looking for opportunities to diversify their investment portfolios, by asset class, sector and geographically, so with the strong real estate market, it makes sense to consider investing in the U.S. The U.S. enjoys a robust legal framework and Title ownership system which makes it an attractive market to invest in real estate opportunities. Depending on the holding structure, the tax treatment upon disposition of long-term U.S. real estate assets (held for more than 12 months) has also been relatively favourable, and not as punitive as many might think. The Walton Group also boasts a Shariah-compliant structure which we can offer to investors seeking Islamic Finance solutions, which is an advantage in this region. Overall, the U.S. is a robust market to consider for savvy investors and is still the land of opportunity.

The Biden administration plans to nearly double capital gains tax for the wealthy, how do you expect this tax proposal to impact real estate investors? I think it is too early to predict the impact of these proposals. On the one hand, it looks like the tax would be levied on real estate profits of more than $500,000, which is more likely to impact the ‘move up’ and wealthier segment of the market. At the same time, Biden is also looking at bringing in a USD2 Trillion infrastructure spending package which is likely to benefit regions of the U.S. where strong population and employment growth is already taking place, and housing alone could see around USD200 Billion injected into the sector.

mea-finance.com

COVER INTERVIEW

Abdulfattah Sharaf, CEO of HSBC UAE and Head of International, HSBC Bank Middle East Limited

Present in the Future Abdulfattah Sharaf Group General Manager, CEO of HSBC UAE and Head of International, HSBC Bank Middle East Limited, explains how HSBC remains at the forefront of banking and financial service innovations as well as taking a leading role in bringing the changes needed to improve the lives of communities and safeguard the state of the world

SBC is a rare example of a global bank that provides its full-service capabilities locally. Why haven’t you followed your international competitors and simply shrunk the offering?

HSBC’s universal banking model is a clear competitive advantage and bringing the full power of that model to our customers in the 64 countries and territories in which we operate is at the heart of the bank’s global strategy. Our ambition today is as clear as it was when we opened for business 75 years ago

in Dubai: to be the preferred international bank for our clients by supporting crossborder banking flows between major trade, capital and investment corridors. And as the UAE readies to celebrate its Golden Jubilee, you can see how that strategy has supported the growth and development of the nation. Don’t forget that in 1946, we were the first and only bank operating here, but in my lifetime, the UAE has built itself into a global trade, transport and logistics hub, an international financial market, a world leader in sustainable finance, and a magnet for start-ups.

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That’s an amazing achievement for the nation, which has had a clear, guiding vision built around openness, connectivity, creativity and an ambition to shape the future. We believe in the UAE’s future as a true international hub, which is why we are committing billions of dollars to support the long-term plans of all our customers from governments, to multinationals, and fast-growing smaller companies, and it is why we are growing our wealth management brand in the country. The wealth arena is particularly interesting, and we have plans to make

the UAE a focus for our expatriate wealth management expertise. It’s in the top five locations for international wealth management according to Boston Consulting, and the growth in the number and wealth of high-net-worth individuals outstrips the global average. To tap that potential, we announced the expansion of our Private Banking business into the Abu Dhabi Global Market, adding to our presence in the Dubai International Financial Centre, which followed the launch of our Jade bank account in 2020 – an account combining relationship management, advanced wealth solutions and luxury lifestyle services for high-networth individuals. Beyond wealth, there are three big themes for me. Firstly, Sustainability. It is centre stage, and the sustainable finance market is a clear area of focus for us and our customers. Green bond and sukuk issuance almost doubled in the Middle East last year and there is still room for growth. Another trend is evolving supply chains. The global trade landscape has been completely redrawn by Covid-19 and it will not be business as usual for trade and supply chains in the post pandemic world. This brings me onto my third theme – digital. Digital technology has proven vital for the trade of essential goods during lockdowns. Applying digital analytics to supply chains is helping to improve transparency and agility, and to eliminate waste and inefficiency. We think that sophisticated use of data will be a catalyst for corporate restructurings and business integrations. All these things need a stable policy backdrop for investors to have confidence when they are making ambitious, long term plans. And decisive policymaking is one of the things that UAE is known for. The new companies law is a clear example of that. Empowering nonnationals to own 100% of a company based in the UAE speaks volumes about the nation’s desire to broaden its scope of foreign investors. These positive

steps will help drive the UAE economy forward, benefiting all investors, foreign and Emirati. HSBC’s purpose is to use our unique expertise, capabilities, breadth and perspectives to open up new kinds of opportunity for our customers. We bring together people, ideas and capital to nurture progress and growth, helping create a better world for our customers, our investors, our communities and the planet we share. Valuing difference, succeeding together, taking responsibility and getting it done are the values that define HSBC. That all underpins our commitment to supporting customers in the UAE as the nation looks forward to its Golden Jubilee

with the inherently intangible human infrastructure of trust and dependability, collaboration and commitment was what really makes the difference – and that’s how we approach digital. At the core of our digital strategy is a concept we call ‘bank-in-your-pocket’. It’s all about giving customers everything they need from their bank digitally and on the move, in just a few clicks. We are rapidly digitising our wealth propositions, including foreign exchange, insurance and investment capabilities, adopting a mobile-first agenda to give clients an expanded range of products digitally and direct access to relationship managers and wealth advisors to support complex needs.

HSBC’S PURPOSE IS TO USE OUR UNIQUE EXPERTISE, CAPABILITIES, BREADTH AND PERSPECTIVES TO OPEN UP NEW KINDS OF OPPORTUNITY FOR OUR CUSTOMERS and lays out the vision that will drive the creation of new opportunities here in the decades ahead.

How is HSBC deploying digital tools to be a better bank in the UAE? The disruption caused by the pandemic has been a test of our digital capabilities, the strategy that guides our investments and the way our people, processes and systems really interact to deliver excellent customer outcomes. I think customers would say we passed with flying colours. Lockdowns and social distancing meant that at one stage more than 90% of our people were working remotely. That took far more than a roll-out of well-rehearsed business continuity plans. Yes, the hard infrastructure of internet connectivity and systems security was vital. But combining that

Whether they are sending money internationally, or monitoring their company’s expenses, our customers have full access to a personalised range services and products in their pocket. While more than 80% of our retail banking transactions globally were completed digitally pre-Covid, our Relationship Managers have helped thousands more customers in the UAE make the move online. And in doing so we accelerated planned developments, such as ensuring that we can process and accept digital signatures – our “LiveSign” service – to make digital banking a completely smooth and seamless experience. We launched our Global Money Account in the UAE in June, which allows customers to send funds from their mobile device in real-time to any HSBC bank account in 20 countries and mea-finance.com

COVER INTERVIEW

territories worldwide in 21 currencies at preferential exchange rates. We have also recently launched an online trading platform for retail customers in the UAE, giving real-time execution on stock exchanges in the United States, United Kingdom and Hong Kong – that’s 60% of global stock market capitalisation. We’ve opened 1,400 trading profiles since launch and more than 13,000 trades with a value of $250 million have been completed. In wholesale banking, more customers than ever before have been using our digital channels and they are recognising the benefits – it reduces turnaround times, reduces time to receive payments, it is more convenient and has greater security. During 2020, we helped more than 1,000 clients make the move onto our digital corporate banking platform, HSBCnet, and more than 80% of eligible transactions were completed digitally. We enhanced the infrastructure of our Global Markets platform in the region to provide the secure systems and processes needed for full-scale

securities trading off-site in global fixed income, equity and foreign exchange markets – all uninterrupted by COVID-19. Our traders were immediately able to begin trading from their homes – for the first time ever – without making any compromises on client experience, cyber security or compliance controls. Many of our competitors could not do that. We are investing significantly in digital banking tools for corporates and institutions. In February of this year, we launched virtual debit cards for businesses in the UAE, which was a first in the Middle East. The card generates single-use virtual card numbers, offering payment flexibility whilst helping with cash-flow forecasting and management. We also recently introduced to the region an integrated global payments and FX solution on our online corporate banking platform, HSBCnet. This allows us to automate and streamline the payment process for a range of currencies, across countries and payment types, into a single batch to make efficient crossborder transactions. This lowers the cost of payments, reduces manual input and improves transaction visibility and speed. Every industry is now seeing an acceleration in innovation and the banking sector is no exception. If there is anything positive to come out of the pandemic, it will be new or improved products and processes – resulting in greater efficiencies and more flexibility in the way people do their jobs, which can only be a good thing for the global economy.

Are banks doing enough to address climate change? Over the last few years, we’ve seen greater awareness of the critical need to address climate change – including here in our region. Indeed, bond and sustainabilitylinked debt issuance from entities in the Gulf Cooperation Council (GCC) economies roughly doubled to almost $5 billion in 2020. However, change needs to happen much faster if the world is to achieve the Paris Agreement target of limiting the rise in the planet’s temperature

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to below 2 degrees Celsius above preindustrial levels by 2050. Banks and the private sector have a key role to play. Banks must prioritise financing and investment that supports the transition to a net-zero economy, that’s why we and 41 other banks earlier this year founded the industry-led, UN-convened Net Zero Banking Alliance (NZBA) to bring collaborating and consistency to collective efforts to reach the Paris Agreement goals. That reinforces our pledge to reduce financed emissions from our portfolio of customers to net-zero by 2050 or sooner and to provide between $750 billion and $1 trillion of finance and investment by 2030 to help achieve this goal. HSBC is at the forefront of financing the transition to a net-zero carbon economy, prioritising activity and expanding its suite of green products across all business sectors to help economies around the world meet the UN Sustainable Development Goals and Paris Agreement commitments. In January 2021, we launched a Middle East Sustainable and Transition Finance team with a mandate to engage on environmental, social and governance (ESG) issues to develop strategic engagement plans for each customer sector – from multinationals to individual entrepreneurs – and to originate and execute business opportunities. No other bank in the region has such a dedicated resource focused solely on supporting customer journeys to net zero. HSBC is using its expertise to help clients across all lines of business on their transition journeys. For major corporates and institutions, we have led innovative deals, including the world’s first transition sukuk for Etihad Airways and the first sustainability-linked loan for a GCC financial institution. We h a ve ex te n d e d E S G a n d sustainability-linked loans to small-tomedium-sized firms and introduced green trade finance and green guarantees to UAE clients. And we helped finance the world’s biggest single-site solar power project, here in the UAE.

Our UAE-based team is also driving transition issuance in the wider region for issuers including sovereigns, financial institutions and the largest multinational corporations. This has furthered our leadership position in sustainable finance in the UAE as part of our commitment to introduce new products and solutions that give clients more opportunities to raise capital sustainably.

How important are Abu Dhabi and Dubai as cities to the global economy? We are living in the urban age. Cities house our businesses and feed our economies. Two billion more people will be added to the world’s cities between now and 2050. We’ve done some very focused research on what will define the successful global cities of the future and concluded that Abu Dhabi and Dubai will be drivers of growth, sustainable innovation, human capital and new flows of trade in the post-Covid-19 environment. Abu Dhabi is recognised as an intercontinental hub for trade, talent and capital. It has evolved as a destination for talent through the opening of international branch campuses of multiple global universities, which fosters the talent base and international business links. And the government is taking proactive steps to expand globally traded, capital-intensive industries such as petrochemicals, pharmaceuticals and life sciences, technology and logistics. Over the past 50 years, Abu Dhabi has transformed into a global business, banking, cultural and hospitality hub. It is one of the key centres of the Middle East. It has invested in economic diversification, which has boosted the city’s global appeal and influence. The emirate’s oil and gas share of GDP has fallen from 59.3% to 50.2% in the last 15 years in a transition into technology and manufacturing roles serving East-West trade and investment corridors. Abu Dhabi’s long-term growth strategy has seen it become a leader for economic

competitiveness and future growth prospects, ranking 20th globally and among the top 40 global financial centres. Abu Dhabi’s Vision 2030 aims to diversify the city economy and build a sustainable economy fueled by fast-growing high-value industries. Through key infrastructure and real estate development projects, it aims to establish itself as a more all-round global destination and develop its status as a gateway to the region. Abu Dhabi is already investing strongly in expanding and upgrading its tourism and cultural amenities with significant projects such as the Saadiyat Island Cultural District. In Dubai, high rates of population growth over the past three decades have emerged in tandem with economic diversification away from oil, a multidecade surge in real estate development driven by Government reforms, and subsequent international migration and investment. In the past 10 years, Dubai has risen to the ranks of global cities, establishing itself at the crossroads of trade, talent and travel corridors. Dubai’s efforts to diversify its economy has contributed to a major increase in capital flowing to the city, facilitated by business reforms and strong national support. Dubai is committed to strengthening the resilience of its economy by investing in high growth knowledge sectors and the innovation economy. Dubai has been reducing its dependency on oil since the 1970s and over the last decade efforts to transform the economy have intensified. As of 2020, only 1% of Dubai’s GDP was derived from oil, compared to over 50% five decades ago.

Sectors ranging from advanced manufacturing to creative industries have emerged. They benefit from the clustering effect of the 11 Governmentowned innovation locations designed to host similarly specialised firms in close proximity. D u b a i ’s m a j o r e c o n o m i c a n d business reforms have led to significant i m p rove m e n t s i n i t s e c o n o m i c competitiveness and status as a global hub. Business and visa reforms are also supporting the city’s innovation ecosystem, particularly for entrepreneurs. Both Abu Dhabi and Dubai are recognised as epicentres of connectivity, diversity, and innovation. They have often served as bridges between East and West, offering internationalists the perfect place to seed and grow their ideas. Their next cycle has the potential to see them become global centres for reinvented flows of trade, more resilient supply chains and revised business models led by digital transformations, which dovetails with HSBC’s priorities in supporting our clients and communities to build back better across the region. Over the next 30, 40, 50 years, a renewed global system of connected and trading cities is being set in motion, all integrated by new trade routes, advanced mobility, and digital connectivity. The UAE will be at the heart of this - a country built on an ambitious vision of the future is a natural home for the dynamism that we think will characterise one of the most exciting growth stories of the decades ahead. We’ll see more diversified, more digitised, cleaner and greener cities, with Abu Dhabi and Dubai very much at the forefront. mea-finance.com

ADVISORY VIEW

THE EMERGENCE OF NEOBANKS

Reshaping the banking and financial services landscape Neobanks are making a mark in the region with their market presence expected to continue to grow. George Hojeige at Virtugroup points out that as neobanks expand into providing corporate services, by partnering with traditional banks they can begin a new age of financial access and security

y 2028, the global neobanking market size is estimated to reach USD 722.6 billion, a seemingly ambitious forecast, but indicative of current trends shaping the banking sector today. With around 39 million users around the world, it is evident that neobanks are on track to exponential growth, revo l u t i o n i s i n g a g e - o l d b a n k i n g processes and financial services along the way. Having introduced a completely new operational model, one that is purely digital and without a physical presence, neobanks are fast filling the increasing demand for financial solutions specifically designed for mobile use. Their unconventional framework is largely hinged on changing consumer behaviour, which is increasingly leaning towards digital solutions. In 2020, market analysts noted that there were up to 1.9 billion online banking users worldwide, a figure expected to hit 2.5 billion by 2024. However, an all-digital banking experience is not just what neobanks aim to deliver. In addition to a customer-centric approach that promises exceptional

quality and user convenience, in comparison to that of traditional banking, neobanks offer a host of competitive advantages that put them on par with established financial institutions.

The future of banking Neobanks allow end-users to deviate from traditional paperwork and timeconsuming processes, and transition to faster, digital and more accessible financial services, including a simplified and faster account opening process, more affordable costs and service fees, higher interest rates, unobstructed international payments and more seamless money transfers. Going beyond standard banking services, neobanks add an array of financial solutions that provide users with a more comprehensive view of their financial activities and greater control over their finances through innovative reporting, budgeting, investment and cash management tools, among others. Furthermore, neobanks leverage AI technology to better understand customer behaviour and match it with financial solutions that fit the user’s lifestyle.

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George Hojeige CEO at Virtugroup

The neobank industry amidst the pandemic While experts predict robust growth for the global neobank sector, like with many industries, it has faced both unprecedented challenges and opportunities during the pandemic. Monzo,

a United Kingdom-based online bank and one of the country’s pioneer challenger banks, saw its valuation plunge from USD 2.6 billion in 2019 to USD 1.6 billion in 2020. On the other hand, for certain neobanks, the pandemic ushered in milestones of growth. One of the United States’ leading challenger banks, Current, grew its users from 1 million to 3 million. Its latest funding round of USD 220 million has also increased the company’s valuation to USD 2.2 billion. Another UK neobank , Revolut, experienced a 40% reduction in revenues when the pandemic started. However, by the end of 2020, the fintech company has significantly recovered from its losses and registered a 50% revenue growth compared to their pre-COVID performance. As of April 2021, experts forecast Revolut’s valuation to hit USD 10 billion, following another imminent funding round. In the Middle East, neobanking is emerging as a strong alternative to traditional sources of banking and financial services. Although still in its nascent stage, the Middle East’s neobanking sector has seen a number of neobanks successfully launch and capture significant market share. Among the countries leading the neobanking revolution in the region is the UAE, where 90% of the people use digital banking. Early this year, the country’s first independent digital banking platform, YAP, was launched. With over 40,000 preregistered users, YAP integrates a range of fintech solutions, including remittances, peer-to-peer payments, bill payments, and spend and budgeting analytics. Another new contender that entered the UAE’s competitive neobanking sector is Zand, lauded to be the world’s first digital bank to offer both corporate and retail banking services. Mohamed Alabbar, Emaar Properties founder and former chairman, will reportedly be at the helm of Zand. In recent years, the UAE has seen other digital banks emerge in the market,

including Liv, a mobile-only lifestyle banking application released by Emirates NBD, and Mashreq Neo, a full-service digital bank launched by Mashreq in 2017 to cater to more tech-savvy customers.

Targeted support for startups, SMEs and niche markets The undisputable advantage of neobanks is that they allow users to open an account without the traditional face-toface interactions, physical document processing and the need to personally visit a branch. However, the pandemic has pushed traditional banks to introduce a similar wholly digital process. Does this mean neobanks have lost their edge over conventional banks? Although incumbent banks have shifted their processes digitally, opening a business bank account can still be a

can step in and speed up the process for smaller players, allowing them to have the same access to corporate banking services, at even lower costs. Another gap that neobanks are aiming to fill is the lack of accessible financing for startups and SMEs – the ones that traditional banks might consider risky or less profitable. Neobanks that offer financing and credit facilities for SMEs implement faster and simpler loan application processes, accelerated creditworthiness assessments, higher approval rates and more lenient collateral requirements.

The impact of neobanks on the traditional banking sector Partnering with neobanks gives traditional banks the opportunity to access new customer segments, such as freelancers

IN THE MIDDLE EAST, NEOBANKING IS EMERGING AS A STRONG ALTERNATIVE TO TRADITIONAL SOURCES OF BANKING AND FINANCIAL SERVICES stumbling block for startups and small businesses, who often find it challenging to fulfil the stricter requirements and higher minimum balances mandated by traditional banks. A study by Wamda, an accelerator of entrepreneurship in the Middle East and North African region, showed that 56% of startups said they were able to open a bank account within two to five months, 29% took less than a month, another 13% spent over five months to complete the process and 2% opted to open an account overseas. As traditional banks are still largely focused on transactions involving bigger companies and multinationals, neobanks

and digital nomads, startup entrepreneurs and other underserved niche markets. On the other hand, such partnerships allow neobanks to benefit from the “trust factor” and security that consumers have long associated with incumbent banks. In addition, by making the banking industry more competitive, neobanks are spurring traditional banks to rethink and redesign their conventional bureaucratic processes, which ultimately benefit end consumers – the small business struggling to secure a bank account, the freelancer who is looking for banking solutions tailored to their industry, and the more digitally savvy generation of users. mea-finance.com

BANKING TECHNOLOGY

Powering new banking business models with open banking platforms Open Banking and the continuing development of APIs are reshaping the financial services landscape. Sanat Rao, Chief Business Officer and Global Head, Infosys Finacle presents a clear account of the background, the features and the new opportunities that open banking has and will continue to bring.

hile the concept of Open Banking has been around fo r s o m e ye a rs , t h e industry mostly espoused it for the sake of regulatory compliance. However, in the wake of the pandemic, there has been a definitive and rapid uptake of open banking approaches and adoption globally. For instance, in Covid’s devastating aftermath, many beleaguered borrowers – especially small businesses and individuals – have found the Open Banking ecosystem to be an easier source of credit. By authorizing their banks and various other institutions to share their data with third-party providers in real-time, the borrowers are able to tap a wider supply of credit on more favorable terms. And this is just one of the many forces driving an accelerated adoption of Open Banking that has made it a key transformational lever of our world today. Along with this growing appetite for Open Banking, the scope of Open Banking has also enlarged in recent times. The early days of Open Banking

saw limited information sharing and little else; today, as participants gain in compliance and confidence, they are offering a wide portfolio of offerings, including credit, payment and accounting solutions, with plans to introduce savings and investment products as well. Two factors are supporting this growth – first, a regulatory push in many countries and second, the proliferation of open APIs. The numbers speak for themselves – in the first two quarters of 2020, Open Banking API platforms globally grew 49 percent QoQ1. In the latest EFMA Infosys Finacle Innovation in Retail Banking Study, financial institutions said Open Banking APIs will have moderate to very high impact on banking business in 2021. APIs are a huge enabler of Open Banking ecosystems, facilitating both efficient exchange of data between participants and a variety of offerings on third-party/ non-banking channels.

The Growing Impact of Open Banking Open Banking is changing the very nature

Banking and Finance news in the MEA market

Sanat Rao, Chief Business Officer and Global Head – Infosys Finacle

of banking and banking institutions. At the highest level, it is dismantling the “pipeline” universal banking model and enabling a ‘platform’ model in its place. Consequently, banks, which traditionally manufactured their products and distributed them through their own channels to their own customers, are now offering a variety of financial and non-financial products sourced from other providers or distributing their own products and services on third-party channels. They are doing this by working with their external ecosystem in a variety of ways: • Creating joint products with partners: Examples include Paytm which has introduced a co-branded credit card with CitiBank (and VISA), and Marcus

by Goldman Sachs (and Mastercard) which has collaborated with Apple to launch the Apple Card. • Embedding non-banking products within customers’ primary journeys: DBS is a great example, with successful marketplaces for used cars, property, travel and utilities that allow it to enter the customer journey well before the customer starts looking for a banking product. • Collaborating with third parties to deliver (even) rival products: Once again, consider the example of Paytm, which is working with Indusind Bank and ICICI Bank on high value fixed deposits and digital loans respectively. Banks are constituting their platform businesses into the following innovative models: • Banking-as-a-Service (BaaS): BaaS is a recent development, with the model still in an early stage of adoption. Possibly, its most famous exponent is Goldman Sachs, which offers a set of APIs for creating bank accounts, making and tracking payments, and accessing the details of their activity. Developers can leverage the Bank’s infrastructure to build financial experiences into their own front-end applications3. • Marketplace: The marketplace model is gaining popularity with many banks creating marketplaces selling bestin-class financial and non-financial offerings in one place. In a way the marketplace is the opposite of the BaaS model because here, banks – much like departmental stores – aggregate the best options from other providers to fulfil even the non-banking needs of their customers. Apart from the earlier mentioned DBS Bank, U.K.’s Starling Bank runs a successful marketplace featuring a variety of

services, such as wealth management, pension accounts and accounting software. • Utilities: A very interesting spinoff is the utilities model where big banks capitalize on their scale and efficiencies to provide back-end infrastructure services to other banks/ providers who then focus only on frontend activities. Payment utilities are now quite common, and the action is picking up in banking as well. For instance, ABN Amro Bank has set up Stater NV providing mortgage services, such as

While developing their APIs, banks should pay heed to the following: • APIs must be based on good design principles and values, such as usercentricity, reusability and end-to-end process coverage. • The strategy should produce a strong operating model, as well as a monetization model that supports key business values. • If the business is to adopt an API-first approach for delivering new features in the future, it must design APIs for maximum reusability, today.

IN THE FUTURE, WE MIGHT ALSO SEE THE PROLIFERATION OF DIGITAL BANKING APPLICATIONS THAT GAUGE THE USER’S EMOTIONAL STATE. collection, communication and loan management, to other small lenders and fintech companies.

APIs – Enabling the digital ecosystem, and fostering the open banking paradigms The above business models, while different on the surface, are all powered by APIs on the inside. APIs work at several levels throughout the open banking enterprise: specialized internal APIs or microservices enable banks to solve problems and create new value for clients; APIs help in customer acquisition and product expansion; an API led architecture can enable banks to innovate on par with the best companies in the world. Therefore, the importance of a sound API strategy can never be overestimated.

1. Mark Boyd, Arjit Mathur, Phuong Pham (2020, August 4). Open Banking Trends Q2 2020: Banks. https://platformable. com/q2-open-banking-trends-banks/ 2. EFMA, Infosys Finacle: Innovation in Retail Banking 2020 https://www.edgeverve.com/finacle/efma-innovationin-retail-banking 3. Goldman Sachs Transaction Banking (TxB) APIs https://developer.gs.com/docs/services/transaction-banking/

• A modern API management platform with clear ownership is essential, as is a sound governance mechanism for executing internal and external APIs. • Last but certainly not least, the bank’s leadership should nurture an API culture throughout the organization. Having the right talent and training resources is critical, because over time, the bank must have multiple agile teams, working across the enterprise, developing APIs.

What’s next for APIs and Open Banking After a slow start driven by regulatory compulsion, Open Banking has started to come into its own. It is a significant opportunity. Open banking is set to become mainstream and will pave way for new possibilities such as open finance. It will eventually foster market competition and innovation creating a win-win proposition for both financial institutions as well as for varied customer segments. mea-finance.com

BANKING TECHNOLOGY

Facing the payments challenges

hat are the common payments challenges that most banks and financial institutions face today? Today, digitalization of the banking industry is accelerating. Being digital at the core, flexible and ready to collaborate to meet ever-increasing customer expectations is becoming a necessity. Fundamentally for a customer, an accountto-account payment must be secure, reliable, simple, transparent, instant, cost effective, traceable, and personalized. Expectations that were typically seen in retail banking are becoming the norm for corporate clients across all product lines. That aside, financial institutions are continually encountering roadblocks with their current fragmented or legacy systems and infrastructure limitations. They cannot scale up efficiently to meet the increasing volume of transactions, nor can they evolve at the speed of the payments landscape, to keep pace with emerging payment methods, new regulations, new features and of course sustaining high availability standards 24x7x365. More specifically and in direct correlation with the democratization of instant payments globally, since volumes are rising faster than revenues, it is essential for financial institutions to improve productivity and efficiency and reduce the cost of payment

Banks and financial institutions know that to ensure they can adapt to the fast-changing demands of their customers and frequently disrupted markets, while remaining competitive and profitable, they must modernize. But says Houssam Chaker of Volante Technologies, they must focus on the correct strategies for success.

processing—these are the table stakes for modernization.

What can banks, financial institutions and the industry do to meet these challenges while remaining competitive and profitable?

Houssam Chaker, Regional Sales Head, Volante Technologies

Banking and Finance news in the MEA market

To meet today’s challenges and satisfy the growing and ever-changing needs of their customers and the market while remaining competitive and profitable, financial institutions must concentrate their efforts on the right modernization strategy. They must capitalize on a scalable digital payment solution in a collaborative environment. This will eliminate technical challenges and provide a frictionless transaction experience, enabling them to offer valueadded services to their clients.

From a technology perspective, the winning strategy will rely on multiple foundations: • Adoption of cloud-native and cloudready solutions to benefit from the extended available services; microservices-based. • A pplication Program Interfaces (API’s) enabled for better connectivity between corporations • ISO 20022 fluency. • T he use of artificial intelligence, automation, and data analytics to better understand customers and provide personalized assisted services. Today, with cloud democratization globally, a new paradigm for payment processing has emerged, based on the Software as a Service (SaaS) platform model. Platform approaches range from providing the entire bank experience at scale (“Banking-as-a-Service”) to the provision of an entire product capability, such as payments, through a cloud “Payments-as-a-Ser vice” (PaaS) environment. Whether it is to simply change the hosting model to benefit from the efficiency and cost reduction advantages of cloud, or a strategic move to build on Open APIs, Microservices, and PaaS, cloud is the way forward. Cloud allows banks to accelerate exponentially their overall digitalization programs and address the productivity, scalability, resiliency, and future-proofing needs of their payment businesses.

H ow i n st a n t p a y m e n t s i s reshaping and disrupting the payments business globally and regionally Driven by consumer demand, regulatory bodies, digital disruption, and new methods of payment, the way consumers and corporations manage finance and liquidity was already going through an intense period of change prior to the COVID-19 pandemic. The pandemic has only accelerated the speed of this change and increased the already-rising adoption of instant

payments. We provide instant payments solutions in many markets, including the US (RTP) and Europe (SEPA instant) and globally, we have witnessed an increase in IP transaction volumes resulting in high adoption of new use cases such as proxy, request to pay, and integrated payables. This has also been underpinned by the need for tighter cash management, predictability, efficiency, and speed to market. I n sta n t p a y m e n t s we re o n c e known strictly for domestic payments, however there are now use cases for a combination of instant cross border and instant domestic payments, like Swift GPI instant, AFAQ/GCC RTGS, BUNA, RIPPLE & SARIE (Kingdom of Saudi Arabia, instant

can provide the right offerings based on their DNA, their differentiators, and their customer-based segmentation and expectations, without exceeding their budget, and while staying profitable and competitive. This is why it’s important for financial institutions to invest in the next generation of cloud payment solutions and partner with innovative payment providers, co-creating a digital payments ecosystem based on modern hub models offering continuous real-time operation, 24x7 availability, cloud-native and cloud-ready for future evolution and collaboration, with ISO 20022 messaging embedded into every step in the payment lifecycle.

ULTIMATELY, INSTITUTIONS MUST MOVE AWAY FROM THE SPAGHETTI AND SILOS OF LEGACY ARCHITECTURES, SO THAT THEY CAN BRING NEW CAPABILITIES AND SERVICES TO MARKET WITH MINIMAL EFFORT.

payment system). This is supported by the extended data offered by the ISO 20022 standard, enabling interoperability and frictionless payment transactions between different counterparties, offering instant / real-time or near real-time cross border payments at an effective cost.

How can technology and scalable digital payment ecosystems help financial institutions formulate a winning strategy? With today’s payment ecosystem evolving faster than ever, banks and FIs need to play a balanced game, mitigating risk, optimizing investment, and scaling up progressively and efficiently in sync with market demand. In this way, they

Ultimately, institutions must move away from the spaghetti and silos of legacy architectures, so that they can bring new capabilities and services to market with minimal effort. If they do this properly, they will be able to provide their customers with a single solution to process any payment through any payment method available today, while offering multiple business criteria to the customer to decide how to process and execute their payments transactions. This is the future of payments: more advanced, flexible platforms that can improve innovation and meet client demands, using digital scale for better fraud protection a n d c l i e n t i n te l l i g e n c e, a l l w i t h minimal effort. mea-finance.com

BANKING TECHNOLOGY

Applying Intelligence With forty years of experience in the banking technology space, SmartStream has built a wealth of market experience and as Roland Brandli Strategic Product Manager- SmartStream Air & TLM Aurora, explains they are now building on this with AI institutionalising knowledge and processes, providing greater resilience for their clients

an you tell us more about yourself and your role at SmartStream?

I am a Swiss citizen, living in Dubai for the past fourteeen years. I have been with SmartStream for nineteen years, after time working in banking, to start at SmartStream in Professional Services as a consultant. After 5 years I moved to business development for Middle East & Africa and later moved into sales where I built our business in Africa. In 2019 I took over the strategic product management of three of our solutions, Corona, TLM Aurora and SmartStream AIR. My job is to ensure that we have the solutions in place that can solve our clients issues today, but more importantly tomorrow as well. Ensuring that we are moving the technology in the right direction and keeping up with the demands and challenges of the evolving Digital Banking space

What services are you offering banks to help them advance their digital transformation journeys? We provide operational control to banks by providing solutions than ensure their data/ process is running correctly and identify any breaks or anomalies as they occur in order to escalate, control and track their

Roland Brandli, Strategic Product Manager- SmartStream Air & TLM Aurora

Banking and Finance news in the MEA market

remediation. Our solutions bring together transactions from disparate systems and reconciles them. In this sense we provide the solutions that “tie up the loose ends” in banking operations, enabling transparency, audit and compliance to safeguard a bank’s operations.

How important is having AI and Machine Learning as part of your solutions? AI is an important part of future technology and holds the promise reducing manual touchpoints in setting up or running a process. At SmartStream we use multiple AI’s at very strategic points, and this is the importance of identifying where the actual needs justify the deployment of AI. We use AI to enhance capabilities and to take over tasks that are still conducted manually. However, outside of daily operations we also see a great value in AI “institutionalising” knowledge and processes where they are currently dependent on individual employees’ knowledge and experience. This creates a more resilient backbone if our clients are exposed to the risk of employees changing their role or job, and the potential loss of know-how or having to reskill new employees.

How can financial ser vice providers leverage SmartStream’s expertise to meet customers’ expectations and maintain a competitive edge in the next normal? SmartStream has 40 years of experience in this space, and we have the knowledge and the solutions that cover the entire breadth and depth our customers require. Whether it is a solution to solve a specific problem or an enterprisewide Operational Control center, we are equipped the right solution. With hundreds of clients globally and in every type of banking from global institutions, investment, commercial, private or retail banks, buy/sell side and corporates we provide them all with the controls that work, and which can be applied in a

sustainable way, giving comprehensive configuration options whilst retaining the capability to upgrade seamlessly to newer versions. Our customers retain the competitive edge now being able upgrade to the newest platform and technology which addresses current and future challenges such a realtime, ISO 20022, native, high volumes, scalability, ease of use, adaptability, time to market, leveraging multiple AI capabilities, and

cycle. The digital Clients expectation is “instant” therefore banks not only need many solutions that scale to much higher volumes, but they also need to be able to handle realtime. Compounding this change is the move to ISO 20022 for payments which requires much larger data sets to be handled and opens new opportunities and capabilities to use this data. So, any solution in the Payments sector must be able to scale, provide

WHERE SOME PEOPLE HAD RESERVATIONS ABOUT USING DIGITAL PAYMENTS AND DIGITAL CHANNELS, EVERYBODY HAS NOW LEARNT TO DO THIS

they can choose how they wish to deploy, be it traditionally on-premises, private cloud, public cloud, on demand services or as a fully managed service.

The outbreak of the coronavirus has accelerated the evolution of the payments landscape. Which trends do you expect to dominate the digital payments industry to reflect customers’ evolving needs and requirements? The pandemic has served as a catalyst to the digital client. Where some people had reservations about using digital payments and digital channels, everybody has now learnt to do this. This means there is a significant increase in Digital Payments such as contactless cards, on-line transactions etc., which also leads to a larger number of bankto-bank payments in the settlement

realtime controls and facilitate open API’s for multiple integration points to other up and downstream solutions.

How do you envision digitalization in the banking and payments sectors, and if I were to sit down with you again six months from now do you think you will give me the same answer? In six-months the problem will just be more pressing. These changes are unavoidable. However, in six- months we will be also talking about new application possibilities, utilizing the wealth of data that the new payment formats allow for, and we will be planning our next AI capabilities. We currently provide three different AI’s on different use cases, and we have already identified multiple other use cases where we will look to be adding more benefit to our clients mea-finance.com

BANKING TECHNOLOGY

ONBOARDING AND KYC TRENDS IN 2021

Digital transformation is no longer an option Client engagement should allow for both internal collaboration across a financial institution’s departments while enabling seamless interaction with clients says Valérie Bauloye Head of Channels & Partner Management, Appway

ow did COVID-19 impact the innovation agenda of the financial services industry?

Innovation dominated strategic priorities before COVID-19, though with shifting emphasis. Although more hybrid interaction models were emerging, the physical interplay was “Plan A”, while digital engagement, “Plan B”. • In 2020 financial businesses had to revise and revamp digital strategies, along with the tools and technology to adapt to the shift in circumstances. • Digitally empowered human interaction is now “Plan A”. • The focus goes beyond ‘innovation’ and is now fixed on ‘transformation’. Digital transformation is no longer an option; it is an imperative.

What have been the most significant impacts of COVID-19 on financial institutions’ approach to the digitization of onboarding and KYC matters? We saw three things, calling them The ABC. The first, to remain agile and adaptive to the compliance process. Due to increased digital use, more fraud occurred, and they had to manage that risk. Then back to front

and the connection to disconnect were more needed to optimize the digital impact on the front end, up to the back end of the bank. Finally, client engagement. Banks must find the right balance between digital and physical services for the client.

The A-B-C

Agile and adaptive compliance processes: • New risks emerged as criminal activities proliferated, crossing from the physical to the online world, with schemes and patterns that fraud detection tools were not prepared or equipped to red-flag. • Difficulty keeping up with unprecedented amounts of amendments to legislation and rules made due to the global emergency, and consequent obstacles in granting compliance. • Initially, a lack of seamless remote access the systems that compliance officers need to screen customers for AML and EDD, ongoing activities like transaction monitoring, SAR, etc. or to perform recurring regulatory reviews like KYC & KYB suitability, FATCA, CRS, and more. This sudden shift caused backlogs and workload peaks, exposing firms to security issues. A huge burden on compliance and risk management functions. • Companies must turn risk management

Banking and Finance news in the MEA market

Valérie Bauloye Head of Channels & Partner Management, Appway

into adaptive due diligence to support customers and employees more flexibly, rather than to interact in a pre-defined way. • Adaptive and outcome-based regulatory compliance is going to be a theme for quite a while. Back-to-front operational resilience • From initial interactions with a client, to all the next actions and decisions that happen internally in the financial business. Digitally enabled CLM connects clients, financial institutions employees, data and systems beyond the firm’s boundaries, making crucial workflows resilient to business disruptions. • Connect the disconnected. • Technology should swing seamlessly between automation and collaboration and offer the possibility to dynamically adapt to the right working pattern, depending on the specific client and workflow. Client engagement • The ‘new normal’ must include remote channels and digital products to engage with investors, allowing for business continuity and resilience, while addressing all the varied client needs from the simple to the complex. • N eed to allow for both internal collaboration across a firm’s departments and seamless interaction with clients from within the tool itself, enabling advisors to identify critical moments in the customers’ lives and automatically trigger the necessary supporting workflows. • The extensive use of digital and real-

time collaboration tools like video conferencing, digital document management, digital signature, video identification and biometrics and cloud services, should apply intelligent automation to lessen the operational burden while enabling the agility to apply changes, manage risks, ensure compliance and protect against fraud. • Need to digitalize client engagement and make physical service available in a virtual, remote way. Clients can then choose the channel best suited to them.

What are the top five trends you have observed in Onboarding and KYC? Firstly, financial services are looking to find more composable tools, and configurability allowing them to deploy rapidly, but remain adaptive to changes. The digital and human approach still remains so they want to find the right balance with these hybrid models. They also need to keep the personal touch which means taking care about what the customer needs at the right time and place. Agile, compliance, regulation and risk management. Financial services providers must manage that and have their back-office accessing all the systems they need digitally and remotely, which was not the case before. And innovation must stay. Even if transformation is a must, innovation remains there to bring novelties. Cloud technology is one big topic, of course, everything is going digital, and transformation is paramount. Composability and configurability: • Financial institutions are looking for pre-packaged, yet highly configurable, fit-for-purpose, cloud-first solutions for faster time to value. • Financial services sector leaders lean towards preassembled, outcomebased solution bundles to deliver a specific customer experience; by mixing and matching them, they can create orchestrated journeys suiting clients’ defined purposes. • By choosing a fit-for-purpose approach, businesses can meet client expectations and solve business challenges all while achieving:

• Fastertime tovalueand respond tochange. • Lower budget requirements. • Greater control and governance. • Reduced complexity and maintenance. Digital and human approach: The hybrid experience is the standard, not the exception. • B efore COVID-19, hybrid models of interaction were emerging, but the industry largely had yet to upgrade the digital experience, now it is fully digital mode ON. • Today, securing clients’ in long-lasting, profitable advisory relationships relies on adapting to our new ‘virtual reality’. • Being innovative by leveraging digital does not equate to ‘no human contact’ • Ultimately, it is all about convenience. Indeed, digitally native generations taught us this lesson before COVID19. For them, all channels exist simultaneously, and moving from one to another is driven simply by what is most convenient in each moment. This view is now held by clients of all ages who do not like being rigidly forced into one channel or interaction mode. Personal, at scale: • Many financial businesses are playing catch-up in meeting clients’ expectations for personalization coming from other industries (think Amazon, Netflix, etc.) compounded by the fact that the COVID outbreak made it so that advisors had to compensate for the lacking in-person service with a more personalized digital experience. • In the context of onboarding practices, data-driven intelligent orchestration allows advisors both to identify critical moments in clients’ lives and to act upon them, triggering the necessary workflows to consistently provide relevant and satisfying experiences at every touchpoint, across all channels and interaction modes. The concept of predictive, actionable, bespoke personalization extends beyond account opening; it can and should cover the entire client journey. Agile compliance • We believe adaptive and outcome-

based regulatory compliance is going to be a theme for years to come, with flexibility, speed, and simplification in compliance processes being vital in helping organizations survive and thrive in today’s world. • C ompliance and risk staff must collaboratively handle exceptions, cross-jurisdictional matters, and outliers requiring substantial flexibility and ad hoc steps, but many financial businesses face paper-based, manual, siloed and rigid activities. • R isk management activities are characterized by complexity, particularly concerning the nature of final clients, services, products, and processes, as well as the regulatory requirements involved. Daily, compliance officers log in and out from up to 16 different systems, often disconnected and not seamlessly accessible. Compliance practices must be simplified to be future-proof. Businesses need to streamline regulatory compliance activities. In the context of onboarding practices, this looks like digital orchestration of activities, automated checks, instant KYC, and crossjurisdictional rules embedded in workflows. This allows for the dynamic assessment of which action to take straight-through processing, triggering the right action to mitigate risk, or escalating dossiers for more immediate, intelligent decisionmaking. It eliminates unnecessary backand-forth, dramatically reducing NIGO (Not In Good Order) rates, allow time for experts to focus on detecting new fraud patterns and clearing true positives. Tech innovation • Pre-covid we saw initiatives flourish in that sense. The firms which already initiated programs around AI, ML, RPA etc. were well positioned. Now the situation has flipped. Everything is digital. Now the question is ‘how to connect what’s disconnected’? • Cloud services are becoming more relevant for financial services and proved essential during the pandemic, not only for their increased data security and access potential, but also ensuring business continuity, cost reduction and scalability. mea-finance.com

MEA FINANCE BANKING TECHNOLOGY SUMMIT 2021

Reframing the future of banking

The wave of digitalization that is evident in the Middle East is expected to equip regional financial institutions with the capabilities they require to survive the new normal

hough theoutbreak of theCOVID19 pandemic accelerated digital transformation beyond business models, channels, and touchpoints across the financial services sector in the Middle East, banks had long made considerable progress in digitizing their products and services compared to their peers in the emerging markets. The Middle East banking sector has come a long way and has weathered several storms over recent years including low oil prices in 2014, but despite all these challenges financial services providers always emerged unscathed due to their innovative strategies. Over the years, market segments within the sector have also grown from strength to strength. Meanwhile, the wave

of digital transformation that is apparent in the Middle East is expected to equip regional financial institutions with the capabilities they require to survive the new normal post-pandemic. On May 26, bankers from different financial institutions servicing the Middle East gathered for MEA Finance Banking Technology Summit & Awards 2021 at Armani Hotel, Burj Khalifa in Dubai to give each other insights into trends that are reframing the future of banking.

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

Banking and Finance news in the MEA market

and new and tailored customer services. Haifa Aboufarah, Enterprise Account Manager – FSI, Dell Technologies, who moderated the Open Banking and the New Business Models panel said that banks should not miss out on the importance and the benefits of collaborating with fintechs and regulators. Financial watchdogs in the region are playing a crucial role in the digital transformation of the banking sector, putting in place policies and frameworks for a better collaborative and innovative financial industry, said Aboufarah. Deloitte said that Open Banking is being made possible by advances in technology that provide new functionality for consumers and banking entrants alike.

By leveraging open APIs, Open Banking platforms enable two or more unaffiliated banks to enrich their digital offerings safely and securely, bringing greater financial transparency and new and tailored customer services to the region. Yuri Misnik, First Abu Dhabi Bank’s Group Chief Technology Officer, who was part of the panel noted that there is nothing stopping fintech companies to partner with banks as he drew a comparison from his observation in the UK and Australia, saying developments in the Middle East financial service sector are at par with those in some of the world’s renowned financial hubs such as London, Hong Kong, and Sydney. However, Misnik said that the banking sector needs to understand that Open Banking does not mean a free for all, adding, “That means when you are accessing and when you are exploring the platforms, and you’re using the platform, you need to apply a meaningful set of controls and protection around customer data on transactions, etc.” Taking a leaf from the UK and Australia, Misnik urged regional banks to have “consistency of engagement”. He highlighted that in Australia and the UK before financial institutions started considering a framework for APIs and

THE UNDERPINNING IDEA BEHIND OPEN BANKING IS THE ABILITY FOR A CUSTOMER OF A FINANCIAL INSTITUTION TO BE ABLE TO LEVERAGE THE POWER OF THEIR DATA AND DO THAT THROUGH AN INTERMEDIARY SUCH AS A THIRD-PARTY PROVIDER THAT INTERMEDIATES THE RELATIONSHIP BETWEEN A CUSTOMER AND A FINANCIAL INSTITUTION. – Brian Yeoh, Head, Data and Technology Governance - Financial Technology at ADGM

a framework for services, they first addressed issues to do with a framework of customer consent. Asked about the challenges that regional banks are facing now or will face in the future while adopting Open Banking, Saud Al Dhawyani, Chief Technology Officer, Emirates NBD, said that the concept is a hot topic in the financial services industry. “I don’t want to sound negative talking about the challenges that banks face in adopting Open Banking, but these are very important areas that we should really understand before implementing the

concept,” Al Dhawyani said responding to the moderator’s question. Al Dhawyani said that the biggest challenge confronting banks is around the business model. Given that banks are part of an Open Banking ecosystem, which consist of fintechs, regulators and other players in the financial sector, having a standard interface that provides a free and open data-sharing platform in the industry – that alone presents a challenge to different players in the market, he added. But one might ask how does a free and open data-sharing platform poses challenges to banks? Al Dhawyani highlighted that the current business model created barriers of entry into the financial services sector which had been leveraged on for decades by incumbent banks to protect and retain market share. Hence, the arrival of the Open Banking concept means banks should start reinventing themselves and adopt new business models. Brian Yeoh, Head, Data and Technology Governance - Financial Technology at ADGM, weighed in saying trust is the mainstay of the financial services sector and one means of ensuring that trust is through regulation. Yeoh said, “The underpinning idea behind Open Banking is the ability for a customer of a financial institution to be able to leverage the power of their data and do that through an intermediary mea-finance.com

such as a third-party provider that intermediates the relationship between a customer and your financial institution.” It is important to note that Open Banking plays an intermediary role and not a replacement role. The concept of open finance builds on the principles of Open Banking then expands it to other financial services such as investment, insurance, pensions among others, said Aboufarah. Giving insight into the concept of open finance Abe Karar, Chief Strategy and Digital Officer, Fintech Galaxy highlighted the digital transformation trends that are shaping up the future of the financial services sector adding, “it is interesting, when one starts thinking about open finance and the whole open API economy, I envision the day when you will be driving and when you pass or someone gives you the way, you end up making a small payment to them.” Asked how banks accelerate their in-house apps development to maintain a competitive edge in an evolving operating environment. Rajashekara V Maiya, Global Head of Business Consulting and Product Strategy, Infosys Finacle said that there are four pathways to innovation, according to a survey that Infosys Finacle conducted on more than 500 global banks. Maiya said that the first pathway is to think about establishing an ecosystem beyond finance, the second pathway is integrating the physical and the digital processes, the third pathway is reimagining and reorienting the transaction flows and the fourth and last one entails accessing the magic of all the other functions.

creating opportunities for innovation and efficiency while opening doors to new competitors such as fintechs, global retail giants as well as card networks and digital-exclusively banks. KPMG said, “Digital transformation is no longer a luxury, but a necessity. Banks that are agile, flexible, and willing to transform their business models will be the ones that succeed and secure their financial strength for future growth.” The Technology for Banking: Past Successes, Emerging Landscape and New Challenges panel was moderated by Zubair Ahmed, Executive Vice President & General Manager of the Middle East & Africa at VeriPark. Ahmed asked the panelists how the emerging technologies are shifting the operating environment for financial institutions? Ellis Wang, Senior Executive Vice President, Group Head of Technology, Transformation and Information, Mashreq Bank said that the outbreak of coronavirus undoubtedly accelerated the adoption of cloud technology as banks moved to offer their clients seamless services despite pandemicrelated restrictions. Wang said that several regional and international banks spent most of last year digitalizing their entire business structures, leveraging on AI to advance efficiency

and productivity as well as reduce operating costs. Asked how shared risk management is becoming the norm whereby banks are collaborating to see how they can solve issues, Yan Bechet, Head of Client Coverage, Dubai Commercial Banking, HSBC Bank Middle East, said, “When I look at banking and collaboration, I think there’s no question whether banks need to collaborate with fintechs, they need to.” Bechet highlighted that long gone are the days when banks could go it alone with their own IT departments, rather collaboration is now more than crucial for banks to maintain a competitive edge. The partnerships go beyond the relationship between banks and fintech firms to include regulators and other banks owing to the common sets of regulations and practices those financial institutions share. The Middle East region recently saw the emergence of digital banks such as Mashreq Neo and Emirates NBD’s liv. As well as neobanks such as UAE’s YAP Bank and Zand. Ahmed asked whether these digital-exclusive banks are a threat to the financial services sector. Stefan Kimmel, Chief Operating Officer, Commercial Bank of Dubai, said that when banks launch digital-only windows, fintech firms have similar standpoints, they do

Digitalization drive Digitalization in the GCC financial service sector is swiftly shifting the field of play whereby institutions are now focusing more on customer experience, and it is no longer about the services and products available to customers. The emergence of artificial emergence (AI) and machine learning (ML) is mea-finance.com

MEA FINANCE BANKING TECHNOLOGY SUMMIT 2021

it for two reasons – either strategically to serve a new market segment that cannot be accommodated under the traditional brand, enter a new segment under a different name or establish a leaner operation. The operation costs of the emerging digital-only outfits are significantly lower than that of incumbent, brick and mortar banks. “And I see in our market here, given the size of the market, given the regulation, the legal framework, customer behavior and several other parameters, I don’t see that as a huge threat,” said Kimmel. On critical aspects that banks should not ignore in their digital transformation drive, Valérie Bauloye, Head of Channels & Partner Management, Appway said that previous financial institutions implemented several initiatives to modernize their businesses. However, the pandemic-induced wave of digitalization that has been evident globally showed that digital transformation is not a cosmetic procedure but rather an end-toend process that is aimed at enhancing efficiency while better serving customers’ needs and expectations. Asked about the gap in digital transformation and what institutions should focus on filling, Sanat Rao, Chief Business Officer & Global Head, Infosys

THE EMERGENCE OF NEW TECHNOLOGIES SUCH AS AI, ML, INTERNET OF THINGS (IOT) OR BLOCKCHAIN, TOGETHER WITH EVER-CHANGING CUSTOMER EXPECTATIONS AND PREFERENCES ARE REDEFINING ALL WE KNOW ABOUT THE FINANCIAL SECTOR. – Gonçalo Traquina, Advisory Partner, KPMG Lower Gulf

Finacle, who joined the summit via video link from London said that the gap has changed in terms of connection over the last several years. Rao said that there is a noticeable change over the last five years in a lot of institutions, their digital and electronic channels and customer touchpoints. Rao also identified the other challenge being faced by institutions as their ability to create a truly digital enterprise.

Fintechs vs Banks The relationship between incumbent financial institutions and new entrants is no longer about competition but is about collaboration through the

Banking and Finance news in the MEA market

adoption of digital technologies to scale up the business. Deloitte said, “The majority of incumbents appear to recognize that while some fintechs may be coming after a piece of their market share, more often than not these tech-driven start-up’s offer new tools, platforms, capabilities, and approaches to improve customer experience and bolster their operations. This approach underscores the notion that fintechs are more friend than foe. The Competitors, Vendors and Partners, The Blurring Line panel was moderated by Gonçalo Traquina, Advisory Partner, KPMG Lower Gulf. Traquina said that the financial services sector is going through a burden shift. “The emergence of new technologies such as AI, ML, Internet of things (IoT) or blockchain, together with ever-changing customer expectations and preferences are redefining all we know about the financial sector.” Traquina sees the relationship between financial institutions and new entrants remaining competitive and profitable. Mohamed Abdel-Razek, the CIO of Africa, Middle East and Islamic banking at Standard Chartered Bank said that banks have the trust from clients, the knowledge of the industry and the process while a fintech possesses the innovation component in the form of new technologies to advance client experience such as visualization, AI and ML, adding, “So I think it’s very important to collaborate.”

Onur Ozan, Regional Head - Middle East, North Africa and Turkey at SWIFT concurred with Abdel-Razek noting that financial institutions and fintechs largely collaborate to enhance business and meet customers’ ever-changing needs. Ozan closed by saying amid a wave of digitalization, fintechs are not going to kill banks neither will banks kill fintechs, but the financial services sector is changing amazingly fast and fintechs are the catalyst of digital transformation. Kokila Alagh, the Founder of KARM Legal Consultants, said that the competition and collaboration between banks and fintechs have led to the immense growth that can be witnessed across the Middle East region, where banks are speeding up digitalization, launching new products and open to discussion with the fintech to advance digital transformation in the financial services sector. Similarly, Fraser Brown, Executive Director, Banking & Insurance at FSRA, ADGM weighed in saying regulators seek to ensure that incumbent banks are agile and robust at the same time embracing the opportunities that fintech presents. Brown believes that fintechs are going to kill a few incumbent banks, “those that don’t move swiftly enough to embrace both the challenge and the opportunity.”

Customer demands For several regional banks, business is no longer about the products and services on offer but meeting customers’ everchanging demands and expectations. The outbreak of pandemic has accelerated several trends in both customer and business behaviors in the financial sector– and customers do not expect to go back. The Demanding Consumer: What’s New and Beyond Banking panel was moderated by Angela Halawi, Financial Services Industry Lead at Microsoft. Halawi said that technology has become an important aspect of our lives and it is driving new customer trends and behaviors that are making it incredibly

challenging for financial institutions because they’re coming with everchanging demands. Ahmad Abu Eideh, the CEO, United Arab Bank said that culture is one of the most important aspects, especially for financial institutions that are about to embark on digital transformation. “As a bank that has just embarked on its digitalization journey, culture is a critical aspect of the digital transformation because with or without it I know that it will be either a make it or break it process,” said Abu Eideh. If a bank does not have the right culture in place and its workforce does not embrace change, nothing happens. Devid Jegerson, EVP Head of Customer Experience and Platform Development, National Bank of Fujairah, concurred that culture is fundamental in the financial services sector especially when an institution is going through the digital transformation phase. Asked what role culture is playing from a tech background Waleed Saied Mohamed Hasabelnabi, the co-founder VP Technology, Cubic Systems said that culture and good leadership go hand in glove, and this is an approach that can be used as a tool within the organization to enforce the change of culture and policies to enhance transformation. “Leadership and culture are core to transformation.

Without them, an institution will not be able to adopt and implement a successful digital transformation journey, regardless of the technology being adopted and its efficiency,” said Hasabelnabi. As Islamic banking is becoming mainstream, attracting interest from non-core Islamic financial hubs such as London and New York, Halawi asked if the evolving customer behaviors and trends in conventional banking are the same as those being witnessed in Shari’ahcompliant finance. Cassim Docrat, Regional Director, DDCAP (DIFC), opened by highlighting that the enabling technologies being adopted by financial service providers and all the frenzy around digitalization is aimed at meeting customer expectations. Docrat also said that banks’ approach to digital transformation makes it appear as if they’re playing catch up with fintechs. He noted that fintechs seem to be a step ahead of financial services institutions and the challenge with customer behavior and especially gen Z and millennials is that they are very agile and can switch around whenever they like.

Transformational technologies Financial institutions are facing increasing pressure to adopt new digital technologies into their business models mea-finance.com

MEA FINANCE BANKING TECHNOLOGY SUMMIT 2021

to maintain a competitive edge in a competitive market and to achieve high operational efficiencies. The financial services industry has seen drastic technology-led changes over the past few years. PwC said that while executives look to their IT departments to improve efficiency and facilitate game-changing innovation, fintechs are encroaching upon established markets, leading with customer-friendly solutions developed from the ground up and unencumbered by legacy systems. The Transformational Technologies & Implementation panel was moderated by Mohamed Roushdy, CEO, Fintech Bazar. Roushdy said that the financial services sector has been buzzing with chatter and activity on fintech strategy including digital transformation, innovation, and Open Banking, but this digitalization comes at a cost. As ke d a b o u t t h e c h a l l e n g e s , opportunities, or concerns faced by financial institutions in digital transformation strategies, Ken Coghill, Director and Head of Innovation & Technology Risk Supervision, DFSA said from a regulator’s perspective, risks do exist, but they are insignificant. “From a regulatory point of view, we have to look a bit deeper and be cognizant of the fact that every time an innovation is being implemented it either creates or reduces operational risk,” said Coghill. Ghinwa Baradhi, Chief Information Officer - Middle East, Northern Africa & Turkey (MENAT), HSBC noted ever-changing customer behavior and expectations as the main challenge that is confronting financial services providers. Baradhi also highlighted that technology is evolving at a fast pace to the extent that the financial sector is failing to catch up with the digital transformation trends, customers’ expectations and regulatory requirements. Zubair Ahmed, Executive Vice President & General Manager of the Middle East & Africa, VeriPark, weighed in saying the challenge is in the fusion of short term versus long term view on transformation. “Several organizations

Banking and Finance news in the MEA market

on the digital transformation front are caught between short term versus long term view on transformation, and I have seen every three months, this challenge coming up,” said Ahmed. Giselle Bou Ghanem, Senior Program Manager for Public Cloud- International CTO Office, Avaya, who was also a panelist, said, “The customer is both a challenge and an opportunity while the changing customers’ behavior and expectations chase after experience rather than products, is what is both an opportunity and a threat.” Nicolai Solling, Chief Technology Officer, Help AG, said that from a cybersecurity perspective, a financial institution requires a whole new set of capabilities to maintain security on new digital platforms. Solling said that for organizations including cybersecurity providers, the wave of innovation is making it difficult to keep up with the new cyber threats, cybercrime and malicious hacking due to the proliferation of

digital channels.

Individual speakers

The impact of COVID-19 - Bryan Stirewalt Middle East financial institutions had significantly digitized their businesses way before the outbreak of the pandemic last year. However, the “stay at home” orders that were introduced by regional governments to curb the spread of the virus inevitably accelerated digital adoption to an all-time high record, generating as much as 10 years’ worth of growth in just four months. Bryan Stirewalt, Chief Executive, Dubai Financial Services Authority, covered several issues ranging from how the UAE is poised to recover from the effects of the pandemic to cybersecurity concerns that are increasing as banks move to digitalize their operations. Stirewalt said that as the UAE is leading the world in COVID-19 vaccine rollouts and is on its way to economic recovery, “the country’s entrepreneurial spirit will certainly be a strong element in its financial recovery and continued resilience.” The DFSA chief said that as part of the government’s initiatives to promote innovation and digitalization, the financial services sector has been transitioning toward a more innovative environment long before the pandemic struck. “As a regulator, we recognize that having clear lines of communication with our regulated entities and stakeholders is critical during the crisis period,” said Stirewalt. As the country is emerging from the pandemic, Stirewalt said that the UAE financial sector is part of the solution and not part of the problem, adding, “Looking forward, we must all be agile, making bold changes to business plans in an evolving operating environment, and we must remain resilient throughout the volatile periods that remain ahead.” The UAE banks are on a strong footing in terms of capital and liquidity and have always been compared to their peers in international financial hubs such as Hong Kong, London, New York, and Shanghai. From an operational risk standpoint,

Stirewalt said that regulators are seeing a recalibration of risk priorities over the last year. “Operational risk and operational resilience have jumped from the backseat swiftly,” he added. The DSFA chief also highlighted how cloud technology has systemically become important to the banking industry and to all other sectors as the economy is going digital. “Sustained disruption in the financial services sector is happening, and the challenge to regulators is to face it and embrace it as a positive force,” said Stirewalt.

Digital payments The use of digital payment methods has undoubtedly soared as the use of smartphones for payments has surpassed the use of debit cards as the preferred method of settling payments globally. Digital payments, once a convenience, have become a necessity in these times, said PwC. The success of digital payment methods can also be attributed to

financial services providers’ quest to meet customer expectations, increase efficiency, accelerate growth and cut back operational costs. Damon Madden, Principal Product Sales Specialist, ACI Worldwide, said that the financial service sector should be open to alternative payment methods and that is what is being witnessed in the UAE and across the world, where the outbreak has accelerated the adoption of seamless, contactless and intuitive payment methods that address the day-to-day requirements of users. Madden also touched on digital payment maturity, noting Amazon’s acquisition of Payfort, which was re b ra n d e d to A m a zo n Pa y m e n t Services last December, a move he said underscored that seamless and integrated experiences offered by digital payments and e-commerce are the future of business. He also said that the modernization of the payments should not only focus much on the services offered such as mea-finance.com

cross-border payments among others but on the way they enhance customer experience. Madden said that the future of the payments sector is about network intelligence. “The future is about having information coming from different organizations, different capabilities, different regulators, bits of information about your customers, about their relationship not just with the X service provider but with the outside world.”

Blockchain revolution As digital transformation is “changing the playing field” for the financial service sector, distributed ledger technology, also known as blockchain technology, is revolutionizing recordkeeping and it is poised to change the future of finance – in accounting, asset registers, payments, trading, collateral management among other services. KPMG said that the traditional financial systems operate with a centralized database, usually with a single point of authority while blockchain technology allows for a distributed database that holds a growing number of records. Gaurav Dubey, Chief Executive Officer, TDeFi Accelerator said that since the inception of blockchain the talk about the entire supply chain shifting to blockchain including cars and flights has not yet materialized. However, what certainly has happened is blockchain finding a killer app and that’s finance. Dubey said that to date, transfer of value and sort of value has been established, adding, “And then looking at the track record, I think, and that can be entirely my perspective, the next phase of cryptocurrencies is certainly decentralized finance, and the way it’s moving.” Posing a question to the attendees at the MEA Finance summit, Dubey asked why some sections of the financial service sector are increasingly trusting digital currencies as a store of value? He noted that the support for cryptocurrencies emanates from how they are supposedly evenly and well-distributed. mea-finance.com

MEA FINANCE BANKING TECHNOLOGY SUMMIT 2021

Akar said that regional banks are very agile and supporting the digital agenda of their respective countries as they advance their digital transformation agendas. The advancement in digital technologies and fintechs globally is putting pressure on banks to accelerate their digital journeys. Akar also highlighted that there is a positive change in technological investments. “We’re seeing enterprises and banks investing in next-generation digital technologies such as artificial intelligence and how to leverage on these technologies to support multiple fronts including streamlining repetitive tasks and reducing or driving less human exposure especially during the pandemic,” he said.

Cybersecurity & regulation C r y p t o s h a v e d e c e n t ra l i z e d governance and work well for the financial service sector. “You don’t have to trust a single party, a single regulator, a single governance structure, so to say, or even the technology underlying because technologies can be hacked,” said Dubey. Dubey also spoke about Decentralized Autonomous Organizations (DAO), which is the basis of financial institutions, but in the case of blockchain, it is managed by a decentralized authority with multiple parties voting. “DAO rests upon a governance structure that is backed by people who are fully vested into the product that’s managed by the governance code,” said Dubey. Dubey said that DeFi is decentralizing finance, adding, “we are coding stable coins, we are coding stable instruments, so we are not creating indices that are probably devised by some expert.”

Cloud & AI solutions Cloud technology is an enabler of transformation in the financial services sector as these computer system resources provide a space to both store

and analyze large quantities of data in a scalable way, including through easy connectivity to mobile applications used by customers. “Banking and capital markets leaders increasingly recognize that cloud is more than a technology; it is a destination for banks and other financial services firms to store data and applications and access advanced software applications via the internet,” said Deloitte. Omar Akar, Vice President & Managing Director – Cloud & AI Business Group, Huawei, opened his presentation by highlighting how it has become inevitable that the digital economy is a key cornerstone of every country’s sustainable economic growth post-pandemic. “Digital economy now contributes to more than 18% of the overall global GDP and is expected to expand significantly in the next coming years.” While in the Middle East region, Akar said that certain countries are pioneering in supporting and driving this digital agenda highlighting how the UAE seeks to boost the digital economy contribution to the overall GDP of the country from 4% to around 14% as part of 2031 strategy.

Banking and Finance news in the MEA market

Cybersecurity and malicious hacking cases have increased since the outbreak of the pandemic last year. The expected expansion of the IoT is introducing a new set of security risks and challenges that will require serious attention from financial services sector executives. Deloitte said that the surge in remote working calls for a greater focus on cybersecurity, because of the greater exposure to cyber risk. The ups urge in soph ist ic ated cyberattacks calls for new ‘cutting edge’ detection mechanisms to meet the threat including ‘user and entity behavior analysis (UEBA). Help AG’s Nicolai Solling said that in the past, organizations used to build their cybersecurity environments using a centralized approach. Giving an example of financial institutions, Solling said that in the past a bank’s branches were connected through a centralized environment where one could invoke an organization’s cybersecurity capabilities and there was this concept of a central crunch point where one could access the cyber risks. However, the cybersecurity ecosystem has evolved and now organizations have the distribution of security towards

users that are potentially located in any geographical part of the world. Solling said, “Open Banking, as we just heard about is just going to be yet another example of how your data will be distributed around environments, potentially to third parties.” He noted that the concept of how an organization can maintain and keep data secure given the different kinds of data governance frameworks that organizations have in place is going to be something that companies are going to spend a lot of time on in the future. Last year, there was an absolute explosion of cyberattacks. Solling highlighted that ransomware was very rife at the height of the pandemic and even though an organization may have protection in place, its business partners and customers might have been exposed to ransomware attacks in the past, and in the future, it might also happen. Help AG recorded an upsurge in distributed denial-of-service (DDoS) attacks, both on a global scale and across the Middle East region. Cyber attackers who use ransomware are becoming sophisticated just as digital technologies are also evolving. Solling said, “In the old days, we used to talk about the files were getting encrypted on machines and the machines are taken out of production, that is still the case today.” “However, attackers have become more and more sophisticated in that they have built the capability of exfiltration data before encrypting it. So, when you choose to pay or not to pay a ransom, attackers may potentially turn around and threatens to leak an organization’s data.” The cybersecurity firm said that DDoS attacks on its customers were up 183% last year. Solling said that as financial institutions have become more and more dependent on delivering services on digital channels, and the availability of these services is critical to their operations, companies need to consider DDoS as a real threat to their businesses. mea-finance.com

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Thriving in a challenging environment

ongratulations to all the winners of the MEA Finance Banking Technology Awards 2021 and thank you to all those who supported and participated in this year’s awards and summit event. Though regional economies are lifting pandemic-related restrictions, financial institutions are still beset with challenges from the previous year. For the industry to have endured and maintained profitability amid the economic fallout due to COVID-19 is surely a commendable feat. MEA Finance Banking Technology Awards recognizes the institutions that have managed to pull through amid travel and movement restrictions and low oil prices which led to the market instability. The financial institutions and tech firms that were conferred with different awards navigated a challenging operating environment to continue the upward trajectory of the industry, created innovative financial services and solutions to meet customers’ evolving demands while maintaining a competitive edge. The MEA Finance Banking Technology Awards was a huge success and we are proud to have had the opportunity to recognize so many industry achievements over the past year. Financial Institutions in the region have always embraced change, making a point to stay ahead of the curve to keep themselves on par with financial institutions in developed markets. We at MEA Finance Magazine will continue to award outstanding institutions that lead the industry. Congratulations again on all your accomplishments, and we are excited to see what you will showcase in the coming year.

Nap Estampador Commercial Director, MEA Finance

mea-finance.com

BANKING TECHNOLOGY AWARDS 2021

The MEA Finance Banking Technology Awards 2021 announce the outstanding technological achievements in the region’s banking and financial industry The MEA Finance Banking Technology Awards 2021 received hundreds of submissions from banking and financial institutions and banking technology providers in the Middle East and Africa. Spotlighting the top technological achievements of the regions’ technology providers and banking and financial institutions in the wake of the Covid-19 pandemic

Banking and Finance news in the MEA market

he MEA Finance Banking Technology Awards 202 1 winners were announced last May 26 at Armani Hotel, Burj Khalifa, Dubai UAE in a much welcomed in-person ceremony, honoring leaders and businesses within the banking, finance, and financial technology sectors in the Middle East and Africa, for excellence, achievement and leadership during the recent and challenging past. All who attended were thrilled to be back at a physical event, despite having to maintain social distancing rules and donning face masks throughout.

The awards programme, organized by MEA Finance Magazine, benchmarks and promotes excellence and stand-out performance in banking and financial technology. It gives due recognition to institutions that have benefitted their clients and customers by innovating throughout challenging economic conditions and the limiting restrictions of the pandemic. Hundreds of entries were critically evaluated by a panel of judges comprised of industry experts and commentators. Forty category winners have been chosen after some in-depth evaluation of their research and knowledge of the market, consideration of the needs of their full range of clients and customers and an assessment of all relevant developments and achievements from the previous year. In his welcome remarks, Kenneth Mitchen, Executive Director and Publisher of MEA Finance Magazine, stated, “Today, we honor leaders and organizations who have faced the challenges, embraced the change, and have maintained excellence throughout”. The forty awards honouring the winners of the awards were presented in two halves, the first for technology vendors and the second half for banks and financial institutions. Here is the full list of the MEA Finance Banking Technology Awards 2021 winners:

TECHNOLOGY PROVIDERS

• Digital Banking Provider of the Year – Infosys Finacle • Islamic Digital Banking Provider of the Year – VeriPark • Best Cybersecurity Provider – HelpAG • B est Core Banking Solutions Provider – Temenos • B est User Experience Solution Provider – Backbase • Best Data Management Solution Provider – Tarabut Gateway • Best Risk Management Solution Provider – Loxon Solutions • Best Analytics Solution Provider – Cubic Information Systems

• Most Innovative Cloud Services Provider – Cloud4C • Most Innovative Mobile Banking App – VeriPark • Best Trading Infrastructure Provider – United MakGroup Technologies & IPC • Most Innovative Trading Platform – Tradesocio • Best AML/KYC Solution Provider – Appway • B e s t Communications Infrastructure Provider – Avaya • Best Open Banking & API Solutions Provider – Maveric Systems • Most Innovative Payment Solutions Provider – Volante Technologies • B est Wealth and Investment Technology Provider – additiv • M ost Innovative Digital Wallet Deployment – PayBy Technology Projects LLC • B est Digital Transformation Consultancy Firm – Testhouse Ltd • B est Islamic Fintech Systems Integration Provider – DDCAP Group’s ETHOS AFP • Tech CEO of the Year – Stephan Berner, Chief Executive Officer, HelpAG • Financial Services Technology Leadership Award – Mohammed Kateeb, Group Chairman and CEO, Path Solutions

FINANCIAL INSTITUTIONS

• Technology Leadership Award – Ramana Kumar, Chief Executive Officer, Magnati • Digital Banking Innovation of the Year – Mashreq

• Best Digital Innovation in Islamic Banking – Emirates Islamic Bank • Best NeoBank – Payit powered by FAB • B est Cyber Security and Risk Management Implementation – Mashreq • B est Mobile Banking Services – Commercial Bank of Dubai (CBD) • M o s t I n n ova t i ve E m e r g i n g Te c h n o l o g y I m p l e m e nta t i o n – National Bank of Fujairah (NBF) • Best Innovation in User Experience – Payit powered by FAB • Best Innovation in Retail Banking – Commercial Bank of Dubai (CBD) • B est Innovation in Corporate Banking and Finance – HSBC • Best Innovation in Trade Finance – Standard Chartered Bank • Best AI Technology Implementation – RAKBank • B e st O p e n B a n k i n g & A P I implementation – Aafaq Islamic Finance and 4pi • B e s t B r a n c h D i g i t i s a t i o n Implementation – Mashreq • Best Corporate Payment Service – Mastercard Corporate Payment Services • Best Risk & Compliance Implementation – Greenstone Equity Partners • B e s t Retail Payment Implementation – First Abu Dhabi Bank (FAB) • B est Treasur y Management Implementation – HSBC

mea-finance.com

MEA FINANCE BANKING TECHNOLOGY AWARDS 2021

Digital Banking Provider of the Year Infosys Finacle

Infosys Finacle was the recipient of the Digital Banking Provider of the Year award in the Middle East. The Digital Banking Provider of the Year award recognized the banking solution provider as the leader in the sector for creating and implementing products and services that are not only unique but meet the requirements of financial service institutions in the region. Infosys Finacle launched over twelve new banking solutions in the past few years and the company offers a full range of services across the implementation life cycle. The company’s digital banking solution suite advances traditional and emerging financial institutions’ digital transformation to achieve frictionless customer experiences and allow ubiquitous automation. The digital banking technology firm’s preventive maintenance offering also allows early detection of application performance challenges before they affect the user bringing a smoother user experience that is unique to the industry.

Best Cybersecurity Provider Help AG

Help AG was honored as the Best Cybersecurity Provider in the Middle East. The firm received the award in recognition of how the cybersecurity solutions provider is offering financial service providers an exemplary system of protection and adaptability in light of the evolving nature of cyberthreats. Help AG joined forces with the Dubai Financial Services Authority to create a Cyber Threat Intelligence Platform (TIP) to strengthen cybersecurity in one of the leading financial centers in the world. As a partner in the threat intelligence platform, Help AG developed, manages, and operates the platform to bolster cybersecurity in the Dubai International Financial Centre (DIFC), the region’s leading financial hub. TIP is the Middle East’s first financial regulator-led platform and facilitates the development of a community of information sharing for regulated and non-regulated companies operating in or from the DIFC.

Best Core Banking Solutions Provider Temenos

The Best Core Banking Solutions Provider award was given to Temenos. The award was given in recognition of Temenos’s market-leading integrated core banking system which comes with deployable components that covers all areas of corporate banking including corporate lending, trade finance, payments and cash and liquidity management, with the addition of analytics and compliance. The solution provides best-in-class corporate banking capabilities. It also offers front-to-back capabilities for corporates to initiate all trade finance products, payments including bulk file and beneficiary management, and cash sweeping.

Banking and Finance news in the MEA market

loan decisions within predefined risk margins. Similarly, VeriPark said that the system offers straight-through processing (STP), simplified AntiMoney Laundering (AML) and Know your customer (KYC) check processes and an advanced eligibility calculator. VeriLoan is distinguished by a CRMbased customer-centric approach while other loan origination products are based on Business Process Management (BPM) tools focusing on workflow automation and user tasks. Given that the Middle East is a core Islamic banking region, the need for a solution that natively adheres to Shari’ah principles cannot be overemphasized. According to VeriPark, several Islamic banking institutions have a Shari’ah board with complex documentation needs and considerable back and forth in the approval processes hence standard documentation used by conventional banks could not meet their needs – which calls for a solution that is guided by the principles of Islamic finance.

Islamic Digital Banking Provider of the Year VeriPark

In the Shari’ah-compliant digital banking solution provider category, VeriPark received the Islamic Digital Banking Provider of the Year award. The company was given the award for being instrumental in the Middle East Islamic banking sector following the successful implementation of end-toend digital loan origination, servicing and collection solution that meets Islamic corporate finance and lending needs at the request of a leading Saudi Arabian lender. The solution includes automated Shari’ah-compliant workflows and process standardization. VeriPark’s product brought greater efficiencies in the bank’s operations while streamlining credit applications and approvals with loan closing time reportedly dropping from 20 to five days. The solution eradicated 99% of manual errors, reduced operating costs by 40%, doubled conversion rates translating in a tenfold monthly increase in processed applications.

Redefining Islamic Finance

The Islamic finance sector continues to demonstrate modest growth globally however at a slower rate compared to 2019/20 because of the economic fallout due to the outbreak of the COVID19 pandemic. VeriPark’s core Islamic modules include VeriLoan – a powerful end-to-end digital loan origination, servicing, and collection solution – that meets Islamic corporate finance/ lending needs including automated Shari’ah-compliant workflows and process standardization. VeriLoan facilitates Islamic financing through Tawarruq Finance, Murabaha Finance and Ijarah / Leasing with a Shari’ah-compliant credit policy and a rule engine containing predefined Islamic finance rules. It gives financial institutions the ability to manage the entire customer lifecycle in one, unified CRM platform. VeriLoan also empowers financial services providers to make swift, consistent, and cost-effective

Digital drive

VeriLoan’s advanced flexible loan engine fully automates the product credit policy with minimal or no human interference, providing each role in the organization with a relevant role-specific intelligent view of the information. This enables bank analysts to easily modify the process steps using the flexible process configurator according to market requirements without any code change. Automated credit bureau checks, watch and blacklist checks, AML/KYC checks and automated decision making enables instant loan approval and disbursement. VeriLoan allows for the involvement of a financial institution’s Shari’ah committee to check rules and monitor processes for the finance/loan flow as well as to approve the sequence of signing certain documents so that a bank can continue with the process and sign the final contract. Similarly, it offers an entire system based on the Hijri calendar as opposed to the Gregorian calendar, facilitating the launch of Islamic products and services efficiently, improving go-tomarket time.

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MEA FINANCE BANKING TECHNOLOGY AWARDS 2021

restricted by legacy systems but instead, the Backbase Engagement Banking Platform accelerates the implementation. The Backbase Engagement Banking Platform, which is equipped with more than 50 engagement banking capabilities, can cover the complete customer lifecycle, ranging from onboarding and customer servicing to cross- and up-selling.

Best User Experience Solution Provider Backbase

In recognition of its digital banking solution that is helping financial institutions revolutionize customer experience through the enhancement of human and technology interaction when using different digital platforms, BACKBASE was accorded the Best User Experience Solution Provider in the Middle East. The digital-first banking company seeks to enhance banks and financial institutions’ digital transformation to allow them to deploy digital sales and banking experience across all segments, channels, and products through turnkey customer and employee apps. Enhancing user experience BACKBASE seeks to transform the centuries-old broken banking system so that the financial services providers do not just interact but rather engage with clients. The digital banking solutions firm is making this possible with the Backbase Engagement Banking Platform – which powers all lines of business on a single platform, including retail, SME and corporate, and wealth management. The platform is designed to enhance a seamless and captivating user experience for both customers and employees across the value chain from digital sales to everyday digital banking.

As one of the world’s leading digital-first banking solution providers, BACKBASE’s mission is to show financial services providers that it is one thing to interact with your customers and shareholders, but it is another to engage them. The banking technology firm said that several financial institutions believe they are “engaging” with clients and stakeholders through their tech departments as they shift from legacy systems in response to market changes. However, industry experts believe it’s too little, much too late, and significantly expensive – underscoring the need for banking institutions to tap into the services of digital banking solutions firms such as BACKBASE. In this new era of enhanced engagement, digital platforms like Backbase Engagement Banking Platform offer financial institutions the unique opportunity to own and master the customer engagement layer of their operations – in a faster and more scalable way. Digital platforms enable banks to truly engage with customers and stakeholders giving them the ability to optimize all interactions across all channels, business and product lines on a single platform. Digital transformation based on customer and client needs is not

Banking and Finance news in the MEA market

Serving the GCC Amsterdam-based BACKBASE is currently working with more than 120 banks globally and the digital banking solutions company has its regional offices in Dubai. The company caters to the requirements of tier 1 and tier 2 banks, challenger banks and digital-exclusive such as YAP. In the Middle East region, the fintech firm has worked with nine banks such as the National Bank of Iraq, Bank ABC, National Bank of Bahrain (NBB), Societe Generale, Qatar Islamic Bank, Kuwait International Bank, ila Bank among others. ila Bank ila Bank joined forces with BACKBASE to build the first cloud-based digital bank in the Middle East in a bid to cater to the needs of a new segment of millennial customers. The digital bank was aiming for a customer-centric solution that would go beyond banking but instead help customers on their entire financial health. Through its partnership with BACKBASE, the neobank implemented managed to implement digital onboarding, tools to reach goals for saving by upselling a savings account (Hassala), ability to fund accounts through a benefit gateway seamlessly within the app among other services. National Bank of Bahrain Earlier this year, BACKBASE supported NBB’s digital transformation, which enabled the Bahraini lender to expand its retail banking offering, as well as cut back on the time spend on customers onboarding from three hours to less than five minutes. BACKBASE’s Engagement Banking Platform allows NBB to rapidly deploy solutions across all their lines of business, enabling faster innovation and allowing NBB to bring new products and services to market quickly and efficiently.

Best Data Management Solution Provider Tarabut Gateway

Tarabut Gateway received the Best Data Management Solution Provider in the Middle East region. As the first Open Banking platform to go live in the region, the award was given to Tarabut Gateway in recognition of the digital banking platform’s business growth milestone including MENA’s largest Open Banking infrastructure provider, first licensed Account Information Service Provider and Payment Initiation Service Provider. By leveraging open banking solutions such as account aggregation, Tarabut Gateway plans to start offering data management solutions across all accounts on one platform to users of banking and financial services. The data management solutions will allow bank customers to utilize their data safely and securely while making informed financial decisions. Tarabut Gateway’s management solutions are aimed at aggregating, enriching, securing, and personalizing customers’ data.

Best Risk Management Solution Provider Loxon Solutions

Loxon Solutions was the recipient of the Best Risk Management Solution Provider award in the Middle East region. The Best Risk Management Solution Provider award was given to Loxon Solutions in recognition of the risk management company’s ability to offer corporates in the region with solutions that preempt and mitigate risks around the clock. The outbreak of the pandemic is accelerating digitalization and the adoption of technologies has become the lifeblood of almost every sector which has also heightened the exposure to risks, said Loxon Solutions. The company’s IFRS 9 Calculation Engine offers a comprehensive solution for the automatic calculation of loan loss provisions based on IFRS 9 regulations and jurisdiction.

Best Analytics Solution Provider Cubic Information Systems

In the analytics solution provider category, Cubic Information Systems was conferred with the Best Analytics Solution Provider award. Cubic Information Systems was given the award in recognition of its analytics solutions which can examine raw data to reach informed and valuable decisions that can be used to guide decision making in companies. The company envisions customers, data and technology as three dimensions of a Cube, the management of which being the catalyst that drives creativity and productivity and has helped many banks and businesses foster innovation and unlock business potential. Cubic was founded as a small private free zone firm in 2013 but has since opened more offices across the MENA region and Europe. The company is revolutionizing the financial service sector with its customer engagement solutions, digital banking, NGO digital wallets, payroll management and business suites.

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MEA FINANCE BANKING TECHNOLOGY AWARDS 2021

Most Innovative Cloud Services Provider Cloud 4C

Cloud 4C was honored with the Most Innovative Cloud Services Provider award in the Middle East region. This award recognized Cloud 4C’s leading position in offering a wide range of cloud management solutions that offer advanced assessment services ensuring that financial service institutions’ path to cloud transformation is seamless, quick and cost-effective. Cloud 4C’s cloud banking services include application modernization, dev ops services for banks, and API gateway on cloud banking. The company is a pioneer in advanced fintech solutions offered on its cloud services and counts Emirates Airlines, Saudi Central Bank, Adgthia, Doha Bank, Saudia and Lulu among its customers. Cloud 4C’s bank-in-a-box offering is aimed at transforming operational workflows, upscale performance integrates world-class security tools while ensuring uninterrupted business continuity under a single SLA.

Best Trading Infrastructure Provider

United MakGroup Technologies & IPC In recognition of its outstanding services in delivering a platform that offers mobility, immediacy and consistency giving the ability to communicate and collaborate seamlessly to corporates, the Best Trading Infrastructure Provider award went to United MakGroup Technologies & IPC. The award was given to United MakGroup Technologies & IPC in recognition of the firm’s ability to deploy a platform swiftly and deftly across a wide range of both local and global financial institutions operating in the Middle East region. The platform was aimed at ensuring continuity of work more pragmatically and efficiently despite the pandemic crisis which altered how companies operated. The introduction of travel and movement restrictions to curb the spread of COVID-19 meant financial institutions had to implement remote work or work-from-home solutions using a variety of solutions such as software, VPNs and cloud technology.

Most Innovative Trading Platform Tradesocio

Tradesocio was the recipient of the Most Innovative Trading Platform award, which was conferred to the company in acknowledgment of the strides that it has in offering a real-life tested platform and technologies that enhance how businesses operate and investors’ portfolios. Tradesocio’s Investor Trading Platform (ITP) is a comprehensive multi-asset platform that allows the company’s customers access to ETFs, mutual funds, equities, fractional shares and thematic baskets across international markets for as low as $1.00. The company’s Robo-advisory is part of its crucial investment infrastructure. With a unique AI-powered algorithm and fact-finding investment logic, the digital advisory platform allows users to receive truly reliable investment advice and to act on it within seconds, eliminating the need for a physical financial advisor.

Banking and Finance news in the MEA market

On-premises operations mean banks have to acquire hardware, hire staff, conduct regular maintenance and upgrades, develop in-house solutions or apps among other services and products. In contrast, cloud solutions enable them to subscribe to a flexible IT infrastructure based on current business needs, allowing them to scale quickly and efficiently. Pay-as-you-go vs fixed pricing: Adoption of cloud solutions means banks also scale up on computing costs as well as storage and capacity, to avoid the overhead of maintaining a dedicated CRM server and prevent wasted, not consumed resources.

Most Innovative Mobile Banking App VeriPark

The Most Innovative Mobile Banking App award was given to VeriPark in honor of its unwavering support to the banking sector through the augmentation of digital banking. The award was conferred to VeriPark in appreciation of the banking tech company’s Native Mobile App which comes with a completely digitalized onboarding process enabling new customers to open accounts in a matter of minutes. When the pandemic hit, VeriPark was tasked by Islamic Bank in Bahrain to create a mobile app that could allow customers to conduct transactions and offer immediate and seamless access to all banking services. The new mobile app that VeriPark for Islamic Bank in Bahrain ensured that customers were digitally ready for the challenges that were brought by COVID-19 but at the same time ready for the new normal.

and applications as well as access advanced software applications via the internet. The emergence of new technologies is creating opportunities for innovation and efficiency at the same time opening doors to new competitors such as fintechs, global retail giants as well as card networks and digital-exclusively banks.

Cloud banking Across the Middle East, financial services providers, central banks, and regulators are increasingly recognizing that cloud is a winning destination for financial institutions to store data

Scalability and efficiency: Financial institutions need to scale up due to their expanding customer bases. Legacy systems hinder the scaling of businesses while running an on-premises data center would be a costly endeavor.

VeriPark said that adoption of cloud is the best decision for the banks, here is why: Future-proof vs legacy: With more and more end-users banking on mobile devices, migrating to the cloud is a way to future-proof legacy applications. Any on-premises application that does not have cloud portability or native mobile functionality is obsolete, regardless of when it was developed.

Simplicity instead of complexity: Cloud solutions ensure service-level agreement (SLA)-driven client servicing and architecture so that the service requests put forward by bank customers could be captured from any of the channels using SLAs and logged onto the backend solution (CRM). A service request captured from one channel e.g., online banking can become seamlessly available on to the mobile banking channel simultaneously. Additionally, it should not require any intervention by the backend operations team. Within the CRM, an automated CRM service workflow moving this activity from one team to another would make sure to get a result. Transform the whole business, not just parts: Cloud solutions give relationship managers a global view of products & services utilized by their clients thereby reducing systems to find it out. This gives banks a broader view of the products and services that customers may require and many cross-sell/up-sell chances were lost. This allows banks to break down the information silos and put in place a single view of the customer and their potential profitability to identify and segment the target market to increase cross-selling. On the go instead of on-premises: With the recent need for remote working and customer-facing software, banks require innovative solutions as they operate in the new normal brought about by the outbreak of the pandemic. Cloud solutions give banks access to CRM on the go.

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MEA FINANCE BANKING TECHNOLOGY AWARDS 2021

Best AML/KYC Solution Provider Appway

Appway scooped the Best AML/KYC Solution Provider award. The award was given to Appway in recognition of the company’s efforts to revolutionize digitalized Know Your Customer/ Anti-Money Laundering (KYC/AML) and onboarding for companies operating regionally and those that have a global footprint in a bid to adequately reflect local regulatory requirements and specific complex needs of local affluent and UHNW clients. As a world leader in client onboarding for wealth management and private banking, the company is committed to aligning with comprehensive industry best practices and thought leadership gained from working on a broad variety of projects globally using solutions that are packaged into manageable technology modules.

Best Communications Infrastructure Provider Avaya

Avaya was the recipient of the Best Communications Infrastructure Provider award. The award honored Avaya for its track record in providing the vital communication infrastructure that allows banks and financial services providers to conduct their day-to-day business. The cloud-based communications firm is the leading pure-play communications and collaboration provider globally with over 144 million users in 190 countries. Avaya aims to enable banks to innovate at the edge and achieve speed to value. While the shift to remote and hybrid working was accelerated by coronavirus, new attitudes towards work and the office will likely carry through to post-pandemic era. The company’s communication and workstream collaboration solutions provide security of data and contact even when teams and staff are working remotely.

Best Open Banking & API Solutions Provider Maveric Systems

In recognition of its ability to provide the best open banking and API solutions that have been instrumental in delivering over 60 core banking transformation engagements in more than 20+ years since the company opened its doors for business, Maveric Systems was honored with the Best Open Banking & API Solutions Provider award. With operations in the Middle East, the US, Europe and Southeast Asia, Maveric Systems’ capabilities and years of experience in fraud, AML and KYC complement their activities as providers of open banking and API solutions, bringing noticeable cost optimization benefits to the financial services sector. The company is adept and facing tall orders, having on one occasion successfully developed and delivered an architecture in a record time of two months, making their customer’s product signifi¬cantly more robust and scalable.

Banking and Finance news in the MEA market

Most Innovative Payment Solutions Provider Volante Technologies

Volante Technologies received the Most Innovative Payment Solutions Provider award in the Middle East region. The award was given in honor of the firm’s support to the financial services sector where it is working with over 100 banks globally, including powering four out of the world’s top five corporate banks with its solutions that process millions of transactions worth trillions of dollars daily. The company’s VolPay facility allows banks in the region to configure a payment solution to meet specific needs and provide the only multi-network managed service solution which is available on the premises or cloud. As payments are the heart of any digitalization strategy, these trends have created an urgent need for payments modernization. Volante’s cloud-native payments solutions give Middle Eastern financial institutions the freedom to evolve past the limitations of legacy technology, enabling them to respond faster to change, and to deliver the benefits of modern payments capabilities to their customers.

Best Wealth and Investment Technology Provider additiv

The Best Wealth and Investment Technology Provider award was given to additiv. The award was conferred to additiv in honor of how the company has made significant strides in the Middle East market with its business model enablement solutions since opening its Dubai offices last September. The company is scoring on many fronts including the clear separation between interaction channels and orchestration platform or its DFS system which offers an extensive set of APIs for integration and interaction with other systems and data providers. additiv also offers a unified data structure for the integration of external data feeds. In the Digital Age Wealth Management report by consultancy firm aperture, additiv was described as best in class in terms of business model enablement and as being positioned clearly as a leader in business and technology enablement.

Most Innovative Digital Wallet Deployment PayBy

Abu Dhabi-based fintech firm PayBy Technology Projects was the recipient of the Most Innovative Digital Wallet Deployment award. The award was conferred to PayBy in recognition of the company’s super app, an all-inone mobile payment solution, that connects businesses, customers, and banks. The company’s business model underscores both modern and human values with key features including enabling cashless payments and financial inclusion, helping SMEs with digital transformation and AI-powered KYC which can be completed in under five minutes. The adoption of seamless payment methods as the preferred method of settling payments following the outbreak of the pandemic is driving PayBy’s growth since its founding earlier in 2020.

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MEA FINANCE BANKING TECHNOLOGY AWARDS 2021

Best Digital Transformation Consultancy Firm Testhouse Testhouse Ltd. was the recipient of the Best Digital Transformation Consultancy Firm award in the Middle East. The award was presented to Testhouse in honor of the company’s expertise in approaching clients’ requirements from a holistic point of view across businesses, defining and managing process optimization, providing the right tools & technologies, and creating expert teams to support digital transformation. Since its establishment 21 years ago, Testhouse has worked with several leading financial institutions in the Gulf region and as a consultancy business working in the world of technology, helping financial services providers to advance their businesses and optimize workflows. Testhouse’s solutions ensure that banks are compliant with regulatory changes, are technology ready, protected from cyberattack, and operate with streamlined day-today operations.

Best Islamic Fintech Systems Integration Provider DDCAP Group’s ETHOS AFP™

The Best Islamic Fintech Systems Integration Provider award was given to DDCAP Group’s ETHOS AFP™. Integrating fintech solutions is a complex and vital activity in today’s banking world. The greater concentration on digitization and customer convenience, as well as security concerns following the outbreak of the pandemic, is driving a lot of changes in society such as remote working – which has become crucial in the daily operations of financial institutions. Since its establishment 25 years ago, DDCAP is one of the biggest intermediaries in the Islamic finance sector. Islamic finance institutions, with Shari’ah-compliant oversight adding an extra layer of requirement over and above their peers in conventional markets, are especially focused on risk management, governance and compliance. Following the increasing and overlapping resonance of responsible financing, DDCAP with its ETHOS Asset Facilitation Program connects the global Islamic financial market responsibly.

Banking and Finance news in the MEA market

Tech CEO of the Year Stephan Berner, CEO of Help AG Stephan Berner, CEO of Help AG was honored with the Tech CEO of the Year award in the Middle East. With over 25 years of experience in a field that is existentially vital to the health, the success and the security of businesses, Berner established Help AG Middle East in 2004 and has overseen the company’s phenomenal growth to date. He continues to further increase the organization’s investment, business activity, and partnerships across the MEA region. As the chief of Help AG, Berner is driving the company through his vision of making his company a pioneer in the cybersecurity space and has always focused on taking charge to ensure they are always the leading market pioneers in everything cybersecurity. Lead from the front Help AG is the leader when it comes to embracing new technologies and is committed to growing its portfolio to meet organizations’ security needs in the ever-evolving digital landscape – which is underscored in the company’s

approach toward securing government and private enterprises in the region. Under Stephan’s leadership, Help AG has always taken a unique approach to cybersecurity – focusing on excellent service delivery, comprehensive cybersecurity offerings, servicecentric models, and industry-leading innovation. The cybersecurity firm is deploying machine learning (ML) algorithms by adopting SOAR (Security Orchestration, Automation, and Response) in two security operations centers to exponentially enhance the speed of incident response. Help AG was one of the first regional service providers in the Middle East to place due to importance on cybersecurity services, be it penetration testing and security assessments delivered by the company’s ethical hackers or consulting and GRC services offered in compliance with local regulatory standards and industry best practices. The firm was also the first regional cybersecurity provider to make its foray into Managed Security Services

back in 2015 and it played the role of a trailblazer. Currently, managed security services and security operations centers are on top of CISOs’ agendas – be it BFSI or governments or other industry verticals, and Help AG is leading here as the trusted MSSP of choice. In line with regulatory requirements, Help AG has built a localized ecosystem of assets, platforms, processes, partners and experts. The Help AG SOC is a stateof-the-art facility enabled by people, processes and technologies covering threat intelligence, monitoring, device management, incident response and recovery aspects of Managed Security Services. Both SAS70 Type II and ISO 27001 compliant, Help AG’s SOCs serve more than 400 customers in varied capacities of managed services. Help AG advocated secure cloud, long before the unprecedented COVID-19-induced cloud adoption. The company launched SASE offerings (Help AG Secure Private Access and Cyber Edge X), to meet the demands of the market for effective cybersecurity in a perimeter-less era in the next normal. In 2019, Help AG partnered with Munich Re, as their Premier Incident Response Co-ordination and Technical Services partner in the MENA. Munich Re is a leading global provider of reinsurance, primary insurance and insurancerelated risk solutions. The strategic partnership with Munich Re ensures that Help AG delivers on the promise of an end-to-end security service for clients, ranging from consulting to assessments and analysis to implementations, operations, support and insurance. Though the outbreak of the coronavirus pandemic has had a devastating impact on the global economy, it has also accelerated digital transformation across business models, channels, and touchpoints. Help AG has significantly contributed to increasing the security of the financial technology landscape in the region and in its renewed positioning as the cybersecurity arm of Etisalat Digital, will continue to empower enterprises and governments in the region with innovative cybersecurity that sets organizations a notch apart, hence acting as a business enabler.

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MEA FINANCE BANKING TECHNOLOGY AWARDS 2021

The Financial Services Technology Leadership Award Mohammed Kateeb, Group Chairman & CEO, Path Solutions Mohammed Kateeb, the Group Chairman & CEO of Path Solutions was the recipient of the Financial Services Technology Leadership award in the Middle East region. He has over four decades of entrepreneurial and leadership experience and an unrivaled depth of knowledge and passion for the IT industry. Kateeb has been instrumental in the development of world-class Shari’ahcompliant software solutions enabling Islamic banks and microfinance institutions to remain competitive and abreast of customer needs.

In his capacity as a Group Chairman & CEO of Path Solutions, he has nurtured a successful culture of innovation by advancing the development of nextgeneration software solutions and services that keep pace with the new Islamic Fintech landscape. Future of Islamic finance Path Solutions has revolutionized its Islamic core banking platform with the launch of its Intelligent Digital initiative roadmap with Path Digital and Path Intelligence platforms, enabling banks to maintain a competitive advantage

Banking and Finance news in the MEA market

by providing their customers with a consistent and seamless intelligent digital banking experience while harnessing the full potential of data. Under Kateeb’s leadership, a growing number of Islamic banks and financial institutions have adopted Path Solutions’ iMAL Islamic core banking platform for their Islamic banking operations to drive inclusive growth. The digital solution provider has nurtured a successful culture of innovation by advancing the development of next-generation software solutions and services that drive differentiation and measurable business value to keep pace with the new Islamic Fintech landscape. Islamic financing in recent years has seen tremendous growth spurred by more awareness, strong investments, digitalization and increasing financial inclusion in predominantly Islamic countries in the Middle East and Africa. In a bid to pursue Path Solutions’ vision of being at the forefront of the fintech revolution to foster financial inclusion mainly for millions of Muslims who lack access to financial services around the world, the company developed iSHRAQ*IslamicMicrofinance, a financial solution that is receiving acceptance by Islamic microfinance companies looking for ways for social sustainability and poverty alleviation. The solution allows Islamic microfinance companies to offer convenient and innovative Shari’ah-compliant services to their customers. With Kateeb at the helm, Path Solutions has outdone its regional competitors and extended its global footprint by anticipating the emergence of future markets, while at the same time shaping and reinforcing the company’s strategy and vision. Path Solutions is a member of AAOIFI, CIBAFI, AFRO-ASIAN Fintech Hub and many other standard-setting bodies. Similarly, the company also adheres to the guidelines of Malaysiabased IFSB, in its engagement to ensure the soundness and stability of the Islamic financial services sector through an effective supervisory and legal framework.

Technology Leadership Award

Ramana Kumar, CEO of Magnati Ramana Kumar, the CEO of Magnati was the recipient of the Technology Leadership Award in the Middle East region. With almost two decades of career and leadership experience in the payments sector, Kumar is spearheading the implementation and deployment of systems that have brought about the best all-around benefits for Magnati and its clients. With background roots in technology applied to a career that has included leading global advisory firms and leading banks in the Middle East region, Kumar has continued along the path, recently embarking on a role at the helm of recently curved

out Magnati using next-generation technologies such as APIs, artificial intelligence (AI) and machine learning (ML) to offer payment solutions across several industries including hospitality, retail, e-commerce and government entities. Leading Magnati In April, First Abu Dhabi Bank (FAB) completed the carve-out of its existing payments division into a stand-alone operational entity called ‘Magnati’. Aside from its payment services, Magnati seeks to provide enhanced capabilities to partner with fintechs on product and service innovation.

Under the leadership of Kumar, the payments firm seeks to unlock new growth opportunities through a focused and agile model, underpinned by an intelligent payments platform that creates value for customers, government, merchant, and institutional clients. Treating payments as a stand-alone entity 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. Magnati will enable clients to grow their core businesses by monetizing data and using next-generation technologies such as APIs, AI and ML capabilities to deliver improved experiences and increased efficiency. Through valueadded services built around data and platform capabilities, the payments company’s customer-led value proposition is a strong differentiator – which will empower customers to excel in the digital economy. Though GCC banks have made significant progress in their digital transformation journey compared to their peers in the emerging markets, the fact that payments represent the most frequent touchpoints between a bank and its customers makes investment in the sector more important than ever.

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MEA FINANCE BANKING TECHNOLOGY AWARDS 2021

Digital Banking Innovation of the Year Mashreq Bank

In the digital banking innovation category, Mashreq Bank was honored with the Digital Banking Innovation of the Year award in the Middle East region in recognition of how the Dubai-based lender has scaled up its mobile and online banking channels to boosts customer experience. Mashreq joined forces with UAE e-commerce giant Noon.com to launch Noon Credit Card in a bid to meet the increasing demand for online shopping. The bank also unveiled two new mobile applications, a ‘UB App’ for branch employees and ‘Mashreq FACE’ for relationship managers. The applications provide a rounded view of customer’s products and transaction details allowing bank employees to serve customers swiftly and efficiently to enhance their experience.

Best Branch Digitisation Implementation Mashreq Bank

In the branch digitalization implementation category, the UAE’s Mashreq Bank was conferred with the Best Branch Digitization Implementation award in the Middle East region. The Best Branch Digitization Implementation award was given to Mashreq in recognition of the strides that the bank has made in digitalizing its branch network to enhance customers’ banking experience while maintaining human empathy and advancing banking operations. In 2019, Mashreq Bank unveiled an AED 500 million five-year digital innovation and transformation investment plan. The branch digitalization plan includes a reimagined branch format – the first of its kind in the UAE with different types of branches including full format branches, express, express business, express gold, and smart branches. Since the unveiling of the plan in 2019, some of these branches are already in operation across Dubai in locations such as The Mall of the Emirates.

Best Cyber Security and Risk Management Implementation Mashreq Bank

Mashreq Bank walked away with the Best Cyber Security and Risk Management Implementation award. The bank was conferred with the award in recognition of how it successfully implemented industry-standard protection and adaptability across all its digital, technological and data systems including enhanced security features such as multi-level transaction limits initiated through online banking. Mashreq’s cybersecurity allows customers to receive instant alerts on almost all transactions that a conducted using their bank accounts. The bank also implemented a high-water mark procedure in the identification, evaluation, and prioritization of risks and has effective abilities to control the impact of any unwanted occurrences across its range of client markets and services

Banking and Finance news in the MEA market

Best Digital Innovation in Islamic Banking Emirates Islamic

Emirates Islamic was the recipient of the Best Digital Innovation in Islamic Banking award, which was conferred to the Shari’ah-compliant lender for pioneering a series of innovations and other numerous achievements in this evolving and competitive sector. Some of Emirates Islamic’s notable achievements include being the first Islamic bank in the UAE to launch a mobile banking app, opening its first digital branch at the height of the pandemic in 2020, being the highest rated Islamic banking mobile app with more than 37,000 reviews on Apple store, and becoming the first and only Islamic bank in the UAE to offer its clients Apple Pay, Samsung Pay, and Google Pay – the three prominent digital mobile wallets.

Advancing Islamic banking Emirates Islamic continues pioneering and advances Islamic banking by leveraging the latest digital banking solutions to enhance customer’s experience. The Shari’ah-compliant lender’s digital-exclusive branch is expected to enable customers to fulfill their financial needs via digital banking channels including an Interactive Teller Machine with remote tellers – offering cheque encashment, transfers and bill payments among other services. As the bank continues its digital transformation, the Shari’ah-compliant bank launched WhatsApp Banking services – becoming the first Islamic bank in the world to do so. The chat banking service through the messaging

platform allows customers to conduct daily banking activities in a seamless and hassle-free manner. The launch of this service enhances the bank’s suite of digital banking channels and allows customers to use features that include checking account balances and temporarily blocking or unblocking an existing card. Last year, the bank became the first Islamic bank in the country to offer dynamic currency conversion for visitors to the UAE using a non-UAE Visa card. When visitors are making cash withdrawals using their Visa card at any of the bank’s ATMs in the UAE, they will be able to view the exact conversion amount and fees in their home currency before making a cash withdrawal. Emirates Islamic’s digital-first approach has been steadily gaining traction, with over 70% of customers now banking through online and mobile banking channels. The bank recorded its highest ever online and mobile banking usage in 2020, with total logins up 14% from the previous year and digital banking transactions up 16% from 2019 levels. In 2021 and beyond, Emirates Islamic seeks to provide state-of-theart digital solutions to its customers to remain at forefront of providing innovative Islamic banking solutions for all customer segments.

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MEA FINANCE BANKING TECHNOLOGY AWARDS 2021

Best NeoBank

Payit powered by FAB The Best NeoBank award was given to Payit, which is powered by First Abu Dhabi Bank (FAB) in recognition of the financial institution’s online-exclusive bank that is efficient and offers a wide range of digital and mobile-first financial solutions including investments, payments, money transfer, and lending. Payit, the UAE’s first fully-featured digital wallet has grown exponentially since it was launched in February 2018. The digital wallet was launched to advance the country’s shift towards a cashless society and is catering to the increasing adoption of contactless and cashless payments which is being accelerated by the outbreak of the pandemic. Payit offers a wide range of innovative solutions to users including utility bill payments, the ability to split bills with friends, money transfers, or shop at their favorite store. Last October, Payit launched “DigitalMarketplace”, which allows SMEs to list and sell their products and services on the platform. Payit brings banking to customers’ fingertips and the mobile app was designed to be easy to use by anyone and everyone using a smartphone. E-commerce and cashless payments are identified among the key priorities of UAE Vision 2021 – it is from this idea that Payit was founded and FAB is determined to advance this national vision.

Best Innovation in User Experience Payit powered by FAB

Payit, which is powered by First Abu Dhabi Bank, was the recipient of the Best Innovation in User Experience award in acknowledgment of the strides that it has made in enabling financial inclusion by incorporating non-banking and low-income workforce into the banking ecosystem. Since its launch in 2018, Payit has launched several services that are customer-oriented and offer convenience to the user. The e-wallet has the unbanked population at heart and they are benefiting from its products and services. Payit’s key features include full digital onboarding – which eliminates the need for an agent to verify the authenticity of a customer’s documents. Payit seeks to leverage customers’ feedback and translate it into features on the app. Some of the features that are available on the mobile app include: Liveness check: Full digital customer onboarding without the need of an agent to visit and verify the authenticity of a user’s documents. Digital Marketplace: This feature allows Payit merchants to sell their products from the app while customers can easily purchase and payt items in few taps – all delivered at their doorsteps. Money On Demand: The future allows the most needed segment, the Ratibi cardholders or blue-collar workers, to request and receive quick cash without any paperwork. The e-wallet was launched in a bid to fulfill the UAE government’s vision of a transition to a cashless society. Payit’s intention is clear: Forget about your wallet. You can use your phone to make any payment, and therefore Payit is the substitute for cash.

Banking and Finance news in the MEA market

Best Mobile Banking Services Commercial Bank of Dubai

Commercial Bank of Dubai (CBD) was the recipient of the Best Mobile Banking Services award in the Middle East region. The award was given to CBD in honor of the lender’s mobile application that caters to the banking needs of all both new and old customers as well as conventional and Islamic finance. The bank’s mobile app offers a simplified registration process allowing customers easy registration using their debit or credit card. It also allows credit card-only customers to register and use the app to manage their cards. The mobile app boasts of multi-channel integration, allowing customers to use both mobile and online banking with single credentials and have a seamless experience across digital channels. Users can also access CBD mobile app using UAE Pass, the national digital identity and digital signature solution for the UAE, becoming the first bank in the country to integrate authentication services with UAE Pass.

Best Innovation in Retail Banking Commercial Bank of Dubai

Commercial Bank of Dubai (CBD) was honored with the Best Innovation in Retail Banking award in the region. The award was given to CBD in recognition of its online banking platform, Digi Account, which allows new customers to open a bank account in under three minutes using an Emirates ID only – one of the fastest accounts opening times in the sector. Since the unveiling of Digi Account, the Dubaibased lender has increased new to bank customer sourcing by four times, 92% of which are attributed to digital channels. Similarly, remittance volumes have doubled and monthly spends across debit and credit cards have also increased one and a half times. The Digi Account onboarding experience is now extended to credit cards and loans, with customers able to instantly get a credit card using the CBD mobile app, and instant personal loans directly credited to customers’ accounts.

Best Retail Payment Implementation First Abu Dhabi Bank

First Abu Dhabi Bank (FAB) was the recipient of the Best Retail Payment Implementation award in the Middle East region. FAB has conferred the award for successfully implementing a system that eases retail payments, including costs and transfer time, and made banking services available to wide sections of society, especially during COVID-19 pandemic–induced restrictions. FAB took the proactive step to implement the system to safeguard its operations at the height of business interruption while protecting stakeholders and customers from getting infected with the disease. One of FAB’s key focuses was leveraging its digital platforms to provide uninterrupted banking services to provide innovative products and solutions for their customers, making it also the only UAE to offer Targeted Economic Support Scheme (TESS) loan differentials at the tap of a button through mobile – in support of customers impacted by the pandemic.

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MEA FINANCE BANKING TECHNOLOGY AWARDS 2021

Best Innovation in Trade Finance Standard Chartered Bank

Standard Chartered Bank received the Best Innovation in Trade Finance award in the Middle East region, in recognition of the financial institution’s cutting-edge digital banking app that accelerates and advances the delivery of trade financing services across the entire supply chain. With its global presence, Standard Chartered is the leading trade finance bank in the MENA region offering comprehensive services and products that includes a complete suite of Shari’ah-compliant products. At the height of the pandemic, the bank’s digital capabilities enabled it to seamlessly continue supporting clients despite the restrictions that were introduced to curb the virus. Though the regional financial service sector is highly competitive, Standard Chartered maintained its digitization lead by focusing on innovation and commercialization of new client value propositions while leveraging the latest technology such as API banking and DLT.

Most Innovative Emerging Technology Implementation National Bank of Fujairah

In recognition of its pioneering leadership in digital banking for its advanced features in internet banking, the National Bank of Fujairah (NBF) received the Most Innovative Emerging Technology Implementation award. NBF’s Internet Banking has undergone a significant overhaul amid a wave of digitalization in the Middle East financial, to boots security and advance customer experience and security. The new upgrade features several advanced features such as a biometrics-based centralized authentication system for seamless authentication, personal finance manager, and Password-less Internet Banking. Similarly, NBF’s online banking is now more secure, quick, and user-friendly through the use of innovative and industrystandard Centralised Authentication and Authorisation Engine. NBF is the first bank in the world to offer digital banking using a web browser password-free.

Best Open Banking & API implementation Aafaq Islamic Finance and 4pi

Aafaq Islamic Finance and 4pi was the recipient of the Best Open Banking & API implementation award in the Middle East. The award recognized 4pi’s expertise in backing Aafaq Islamic Finance to integrate with an important banking authority in the country, the Al Etihad Credit Bureau (AECB). Through 4pi, Aafaq has become the latest financial institution of its size in UAE to connect via message gateway to the AECB. The Shari’ah-compliant financial institution and its credit risk, and analytical services partner put digital transformation at the core of their implementation to ensure that they adopt a 360-degree view of the market and its processes, fully acknowledging the importance and the potential of API within the business. Similarly, the Open Banking solution infrastructure consists of several key components that are grouped into four main segments that include Connector APIs, Security Control & Access Management, Environment enablers, and Operations & Reporting.

Banking and Finance news in the MEA market

Best Treasury Management Implementation HSBC

HSBC received the Best Treasury Management Implementation award in the Middle East region. The Best Treasury Management Implementation award was given in honor of the bank’s response to COVID-19 through the acceleration of planned developments such as the unveiling of Global Disbursements on their integrated global payments and FX solution. Following its investment in a series of enhancements to its mobile banking platforms – such as mobile device authentication, mobile liquidity management and general functionality, HSBC reported a 110% increase in app downloads and a 1,037% increase in mobile transactions. HSBC’s digital banking solutions received a positive response from customers which prompted the bank to go 100% digital with their wholesale banking customers in the UAE as of November 1, 2020, and they no longer accept manual instructions. Scaling up The outbreak of the pandemic put to test the financial service sector’s digital transformation progress and it has put even greater focus on the importance of digital treasury management for businesses in the Middle East. To adapt to the changing operating environment, HSBC unveiled HSBCnet – the only available channel for customers to make payments and initiate certain trade finance transactions in the UAE. The bank plans to expand its trade finance solutions to other regional markets upon receiving the necessary regulatory approval. HSBCnet combines technology, innovation and customer experience and it includes: Virtual Corporate Debit Card: It was launched for corporates operating in the UAE. HSBC’s Virtual Corporate Debit Card generates single-use virtual card numbers, offering payment flexibility whilst helping with cash-flow forecasting and management. Blockchain trade finance: Following milestone pilot transactions completed in the last few years, HSBC successfully reached another milestone when they executed a transaction completely outside of a test environment, through the bank’s now fully functioning and commercial blockchain trade finance proposition – enabling paperless trade at scale. The transaction, which was executed on the Contour platform, was between the UAE’s Universal Tubes & Plastic Industries and India’s Tata, achieving a global first for the steel industry in its shift towards digital trade finance. Trade finance powers much of global trade but traditionally it is characterized with heavily manual and paper-based processes – which is being revolutionized by HSBC’s new trade finance solutions. The bank said the digitalization of these processes can reduce transaction time from between 5 to 10 days to under 24hrs – thereby unlocking working capital and enabling more trade between countries.

Best Innovation in Corporate Banking and Finance HSBC

In the corporate banking and finance innovation category, HSBC was conferred with the Best Innovation in Corporate Banking and Finance Award in the Middle East region. The Best Innovation in Corporate Banking and Finance award was given to HSBC in recognition of the innovative strides that the bank has made in an already crowded market by launching a virtual debit card for corporate payments and users. Launched in February, the virtual debit cards, which operate on the Visa platform and generate tokens for each transaction, with the payment debited directly from the corporate cardholder’s current account. HSBC said that by using Visa’s Payables Automation Platform, a card is distributed electronically, protecting the primary card number and providing enhanced payment security and efficiency.

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MEA FINANCE BANKING TECHNOLOGY AWARDS 2021

can access the mobile app by simply downloading it from Google Play and immediately start serving consumers with a flexible, seamless, intuitive, and secure checkout experience. Merchants who use Mastercard payment gateway service benefit from a growing range of value-added services including Tokenisation, EMV 3DS, Tap On Phone, access to a wide range of popular global payment methods, fraud management tools, flexible integration options, language capabilities and market entry support. Mastercard’s gateway processes more than 45% of gateway volumes in the Middle East and Africa region.

Best Corporate Payment Service

Mastercard Payment Gateway Service Mastercard Payment Gateway Service was the recipient of the Best Corporate Payment Service award in the Middle East region. The award was presented to Mastercard Payment in honor of the white label services that the payments firm offers to several financial institutions in the UAE, Saudi Arabia, Qatar, Lebanon, and several other countries in the region – allowing banks to integrate Mastercard products and fully brand as their own. Mastercard recently launched ‘Tap On Phone’ which revolutionized payment acceptance capabilities as the payments firm moves to help small to medium businesses weather the impact of the pandemic crisis. Mastercard also joined forces with Mashreq Bank to expand the reach of ‘Tap On Phone’ in the UAE – allowing SMEs to meet increasing consumer demand for convenient touch-free in-store payments.

Mastercard Payment Gateway The Middle East region’s payments volumes have soared since the outbreak of the pandemic, reportedly generating as much as 10 years’ worth of growth across B2C, B2B, and P2P spaces in just over 12 months. In a consumer survey that was conducted by Mastercard in the Mideast region, 70% of respondents said that they are using some form of contactless payment method since the outbreak of coronavirus due to safety concerns. 81% of the respondents said that they would continue using digital payments post-pandemic. Mastercard’s ‘Tap on Phone’ solution easily turns Android smartphones into secure payment acceptance devices for contactless cards, mobile wallets and even smartwatches — with no additional equipment or setup-related costs. Entrepreneurs and small businesses

Banking and Finance news in the MEA market

The future of payments Though the outbreak of the pandemic presented a set of unprecedented challenges to the global financial services sector, it also accelerated and strengthened the adoption of contactless payment solutions, a trend that was already in full throttle across the region. The payments landscape is experiencing a wave of innovation, driven by technological advancement and consumer desire for seamless and intuitive payment solutions. The nexus between banks and digital payments service providers is no longer about competition but is now about collaboration through adopting cutting-edge technology services to meet customer needs and expectations. Within the Middle East region, Mastercard is partnering with several financial institutions including Saudi Payments Network (MADA), Mashreq Bank, RAKBANK, Qatar National Bank and Standard Bank. Across the GCC region, the pandemic and its economic fallout have undoubtedly accelerated a string of existing trends in both consumer and business behaviours while introducing new developments that saw the use of digital payment methods surpassing the use of cash and debit cards. The next generation of digital payment solutions will not only be embedded within smart devices, but they will also have to offer increased securitization, such as tokenization and strong authentication.

Best AI Technology Implementation RAKBANK

In honor of its AI-powered insurance bot on WhatsApp which eases the workload of insurance and helps improve customers’ journeys and their perception of the industry, RAKBANK believes that AI can transform the insurance landscape globally. The bank built an AI-powered platform that gives customers a one-click conversational engagement interface. RAKBANK’s social ads are paired with WhatsApp CTAs to boost conversion, allowing qualification, answering inquiries while offering personalized recommendations. The bot records insurance application details and qualifies leads based on the eligibility criteria of the bank and the recorded details are pushed into the CRM database for credit evaluation

– which has increased the bank’s customer engagement. Digital transformation Though insurance has lagged other sectors in digitalizing its core business and embracing customer experienceled approaches, InsurTech is expected to advance the development of the industry. The nearly three-century-old industry has been somewhat slow in catching up with the digital age. However, with every other industry embracing digitization, baseline customer expectations have changed dramatically over the past two decades or so. It is near impossible for insurance firms to match these expectations while retaining their traditional operational structures. In a traditional

setup, insurance companies deal with limited staff, complex procedures, long questionnaires, and under-pressure customer support. All of which act as negative barriers to customers’ perception of this industry. According to RAKBANK, Artificial intelligence (AI) is at the forefront of disruptive technologies that have the potential to transform the insurance landscape globally. RAKBANK said that the use of conversational AI is enabling growth and disruption in the insurance sector and the bank is leveraging AI to address the demand for dynamic products and capture a new customer base comprising younger demographics. Hence, the bank has built an AI-powered insurance bot, an innovative and thorough experience that bridges the distance between our company and customers. We simplify the insurance landscape, not only from a product perspective but the way a customer interacts with us. RAKBANK is revolutionizing the insurance sector to help customers first: quickly, second: competently, third: at any time, and fourth: on all channels. Here are some of our conversational automation highlights: • Multichannel Support 24/7 Customer Support on WhatsApp and Web 360-degree Customer Engagement Automated chat support through Lead Generation. • Insurance Application Tracking and Feedback Vernacular Connect with users in the language of their choice with an accuracy level of 93% in English & 85% in Regional Languages (Arabic) Agent Fallback Chat with our Insurance experts on their preferred language when the bot is unable to respond Smart Routing Context-based routing to the right team at the right location. The bot can qualify, answer inquiries and provide personalized recommendations. The bot records insurance application details and qualifies leads based on the eligibility criteria of RAKBANK. The recorded details are pushed into the CRM database for credit evaluation.

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MEA FINANCE BANKING TECHNOLOGY AWARDS 2021

Best Risk & Compliance Implementation Greenstone Equity Partners Greenstone Equity Partners, the largest independent fund placement firm in the Middle East and leading provider of regulatory-compliant fund marketing and registration services in the GCC, won the award for Best Risk & Compliance Implementation. Greenstone Equity Partners’ selection as the winner of this year’s “Best Risk & Compliance Implementation” from the hundreds of nominations submitted to MEA Finance across the various awards categories demonstrates further validation of Greenstone’s rapidly growing regulatory compliance program. Greenstone has made substantial investments in building out their licensing and compliance program to support their fund managers who

wish to raise capital from the region but lack the required licensing to do so. Greenstone provides its regulatory compliance solution to a variety of leading global fund managers with combined AUM’s of over $1.4 trillion. Business strategy Founded in 2011 to bridge the needs of local institutional investors and family offices who wish to gain access to global private investment opportunities, Greenstone has enabled investments into 200+ alternative funds across the full spectrum of investment strategies which have raised more than $100 billion. Headquartered in Dubai with coverage offices throughout the GCC and a team of over 50 professionals,

Banking and Finance news in the MEA market

Greenstone specializes in helping global alternative fund managers compliantly raise capital from investors in the GCC. Greenstone’s fund placement service specializes in raising capital to secure commitments of $2 million to $250+ million per investor for fund managers with AUMs of $1 billion to over $100 billion. Greenstone maintains deeply rooted, highly productive relationships with over 200 institutional investors and 1,500 non-institutional investors, including sovereign wealth funds, pension funds, insurance companies, financial institutions, family offices, and UHNWIs. Independent of fund placement, Greenstone’s regulatory compliance service enables leading global fund managers to market and offer their funds compliantly to GCC-based investors by partnering with Greenstone to act as the locally licensed partner to register their funds and facilitate regulatory compliant fundraising. Greenstone has grown its global workforce by 40% since the start of the pandemic and it continues to focus on attracting global and regional talent as it looks to further expand geographies and product verticals.

We are reducing our environmental footprint Considering the continued growth of the aviation industry and related carbon emissions, our sector needs to become more sustainable. So as KLM, we are taking responsibility for making our business more sustainable. How? By flying on sustainable fuel, with more efficient routing, with cleaner planes and by recycling our waste. Learn more about our journey to more sustainable aviation on klm.com/flyresponsibly

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MEA Finance - July 2021

Articles inside

MEA Finance Banking Technology Summit 2021

Facing the payments challenges

Onboarding and KYC trends in 2021

Powering new banking business models with open banking platforms

Applying Intelligence

Present in the Future

National Bank of Oman and Loylogic announce a strategic partnership for PointsHub, Reward Store, Travel and PointsPay

NBK officially launches the New MX.3 Solution for its treasury and investments operations

Forward thinking

Kuwait Finance House (“KFH”) Successfully completed the upgrade of its fully automated STP Islamic Treasury solution

A wealth of change

Sustainable Growth

Banking in the future

Specialised attention to changing needs