Q: Mashreq’s digital banking offering has been recognised multiple times by Euromoney over the past few years. There are good reasons for this. One of them is the bank’s strategic vision on digital. How would you describe this vision – how important is digital to the success of the bank?
Abdelaal: Our digital vision involves a few pillars. The first was ensuring that we promote a culture of innovation within the bank. This has been hardwired in our DNA for many years, going back before I joined.
This culture of innovation basically means adopting the habits and practices of digitally native companies, which is very difficult for traditional banks to do successfully. It involves pursuing an agile operating model with API interfaces, supporting open banking, and fostering digital collaboration through initiatives, such as hackathons for ideation. All of these require a complete shift and change in the way that we think, do business and build experiences.
For example, in 2021, we became the first bank in the region to launch an API development code developers’ portal. This signified our commitment to providing personalised, cutting-edge services and working with key ecosystem players to deliver innovative solutions. Not everyone is open to that.
Last year, we also established the fintech hub with the DIFC (Dubai International Financial Centre) with a special focus on AI an AI-driven solutions, and introduced a solution like Neo NXT, which is a platform to promote financial responsibility among the younger generation.
Our digital vision involves a few pillars. The first was ensuring that we promote a culture of innovation within the bank. This has been hardwired in our DNA for many years, going back before I joined
The second pillar is customer or client centricity. Digital transformation should be about enhancing the customer experience to differentiate the bank from competitors. Competition out there is stiff whether from within the incumbent banking community, from fintechs, or from another financial services provider. So prioritising customer centricity is important to drive the culture change within the organisation.
It also important because while you can build technology, and the digital journeys, if you don't have client centricity embedded in what you do, from inception to the end, your delivery will lack impact.
The third pillar is building an ecosystem of partnerships, or forming strategic partnerships with fintechs and Big Tech, and other industry players. This has helped us develop our expertise, access innovative technologies, and accelerate our own digital initiatives.
A good example of that is our collaboration with Federal Bank to build the first of its kind digital NRI account between the UAE and India, and our work with the Emirates Face Recognition Technology to deliver the first and the fastest digital onboarding experience in banking.
The fourth pillar is measuring the success of what we are trying to achieve. Our primary objective of digital transformation is to generate value for our clients and for our shareholders, rather than just becoming digital for the sake of it.
So we have developed three ways to measure this impact: direct impact on CX (customer or client experience, measured through adoption rates, conversion and acquisition rates, and NPS scores); direct impact on P&L (measured trough digitally correlated revenues and metrics, including client acquisition through digital channels etc.); and direct impact on efficiency in terms of cost reduction (measured by impact on the middle-line, or the cost line having an impact on efficiency in terms of turnaround times, straight through processing etc.).
These pillars support the vision, which is crucial for the success of the bank. And for positioning it at the forefront of digital innovation, and in supporting an enhanced CX experience, which in turn strengthens client loyalty, and gives the bank a competitive advantage and ability to gain market share.
It also helps us create new avenues for growth, such as exploring new markets, such as Pakistan, where we have received approval from the central bank to establish digital banking operations in the country. We have also expanded into Egypt and across the GCC.
Q: What areas of digital banking would you say Mashreq is different to other banks, or areas where the bank really excels?
Abdelaal: Hands down, I would say client experience. We are constantly using our digital capabilities to build client experiences rather than products, services and solutions. And when we are building those kinds of experiences, we are focused on keeping the emotional connectivity within the digital environment, which can be difficult, but is critical for success.
Everyone can build a digital journey. Yet keeping this emotional connectivity and relationship with the client at the end of it is crucial. It is a delicate balance, and one that traditional banks often struggle to achieve, unlike fintechs.
So what differentiates us in this space is our focus on building experiences that resonate with customers on a deeper level. That evoke positive emotions while meeting their needs.
What we have created in Neo NXT is a good example of such an experience. Targeted at juniors from 12 to 18 years old, Neo NXT aims to build an emotional connectivity with these customers throughout the lifecycle of their journey, from being introduced to banking, to managing their accounts or using their wallet. At the same time, we have built a complete lifestyle experience for users, involving parental controls, and target-setting, which rewards users for achieving their targets.
Everyone can build a digital journey. Yet keeping this emotional connectivity and relationship with the client at the end of it is crucial. It is a delicate balance, and one that traditional banks often struggle to achieve, unlike fintechs
We have set out to build a culture that fosters client centricity and innovation, supported by a multi-year investment programme. For us, it was a massive cultural shift. First we had to focus on changing our staff’s mindset to become client centric, to think about the client ahead of the P&L, and to think about the impact on the client, about their experience. That was very important.
Another key differentiator for us is the depth of our integration into the digital ecosystem. Today, we are leading the regional charge when it comes to banking as-a-service, and this is another key area of focus for us, together with financial inclusivity across the MENA region.
We are building solutions or experiences that address financial inclusion, and we see enormous growth potential in partnering with fintechs and have made substantial investment this year backing innovative start-ups in this area.
Q: While much has been achieved, what areas of digital is the bank prioritising for investment over the next 12 months, and why?
Abdelaal: Within the context of digital banking, or the wider sphere of technology, the concept of achievement is extremely challenging. The landscape keeps evolving at breakneck speed. Client expectations, wants and needs keep changing every day. And when you talk about concepts like hyper personalisation, the sky becomes the limit.
So by the time you think that you have achieved something, and your development happens, you are in a new sprint chasing the future. It's vital to acknowledge that the competitive landscape in banking is no longer confined to other banks. Today, we are competing with fintechs, Big Tech, e-commerce providers, telecoms and other various ecosystem players.
To stand out in this competitive field, we need to continue to innovate, adapt and stay ahead of the curve. This is the only way for us to offer a differentiated, unmatched client experience that is seamless and personalised.
In my mind, the future of banking is digital, no doubt about it. And we are very much positioned to reap the fruit of our early investment investments in that field. Thinking about which areas we will focus on, there are a few, such as conversational or generative AI.
To stand out in this competitive field, we need to continue to innovate, adapt and stay ahead of the curve
We are now focused on deploying conversational AI technology across our network to enhance customer support and improve operational efficiency. As part of this, we are aiming to train our chatbots in the future to provide personalised services and recommendations, as well as enhance the overall client experience.
Another area of investment or focus over the coming 12 months is analytics and data-driven insights. We are investing significantly in machine learning and AI technologies to gain deeper understanding and insight of our customers, which would help us to better personalise their baking experience. Together with this, this type of technology will also help our people make more informed business decisions, optimise operations and also manage risk.
The third area of focus for us is driving digitisation within our wholesale banking business, which is a core area and priority for us. This means investing in digital account opening, trade, cash management and payment solutions. And despite of the fact that our existing platform is being perceived by the Over the last few years we have been working with few global technology developers to reimagine and build a state of the art transaction bank and global trade platform.
Last not but not least, we are constantly focused on cybersecurity and data privacy, areas which are investment priorities for us.
Q: Over the next few years, how do you see Mashreq’s digital banking business or offering changing?
Abdelaal: It will change drastically. It will have to. Banks running the old playbook will not survive. Banks will need to operate like tech companies to win. Advanced data capabilities, cloud computing, cutting-edge tech stacks, and agile operating models, are all areas that banks will need to invest in and master.
In the future, banking clients will expect to consume banking services in the same way they consume the services of consumer technology companies. The interaction will need to be the same too.
They will expect their banks and the services to always be accessible, 24/7, 365. Consumers will also expect their banks to follow them, not the other way around. They expect their banks to create value for them, rather than the other way around.
Our strategy of developing bespoke solutions, platforms and experiences like Neo NXT is the answer to this future challenge. In the future, I think our commitment to enhance the client experience will demand that we continue to craft solutions that not only meets but exceeds their expectations.