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NBK officially launches the New MX.3 Solution for its treasury and investments operations
Treasury 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.
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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 Room, Treasury and Investment 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 platform contributes to developing National Bank of Kuwait’s digital infrastructure and helps provide leading competitive treasury solutions, regionally and globally
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 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.
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. 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.
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Regulation
Our strong and respected regulatory framework sets us apart from other IFCs
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By An Kelles
Director for GCC
an.kelles@jerseyfinance.je
Faizal Bhana
Director Middle East, Africa and India
faizal.bhana@jerseyfinance.je
UK
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FRANCE
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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
The 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 client propositions, a shift 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
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.
Wealth management firms’ 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
– 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 relationship manager delivered 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.
Across the financial services 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.
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 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 protocols to regulate succession and conflict resolution is critical.
– Deloitte
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 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.
– Sherif ElHaddad Executive Director, Asset Management at Al Mal Capital
