On many different levels, consumer banking is unrecognisable today from what it was a decade ago. Customers can do ever-more banking via their smartphone or online, and have instant access to more analysis and advice about their finances than ever.
On the other hand, the corporate and wholesale banking customer journeys have also witnessed substantial progress. The introduction of new digital platforms, investments made in technology transformation and digitalization, have contributed to enhanced operational efficiency and client servicing capabilities, supporting corporate treasurers and finance executives.
However, much of the development on the corporate and wholesale banking side can be overshadowed by the investment and innovations happening on the consumer side. Moreover, there is often a perception that banks are investing in innovation more in consumer banking.
This isn’t the case at Mashreq, one of the most digitally sophisticated banking groups in the Middle East.
“Contrary to the belief that most financial services providers are focused on driving client experience and transformation on the consumer banking front, we are as focused as it can get on driving the client experience and transformation on the wholesale banking or corporate banking front,” says Ahmed Abdelaal, Mashreq’s group chief executive officer. “And we have done a lot on this front, whether it's for the SMEs or for the large-cap or mid-cap clients.”
Contrary to the belief that most financial services providers are focused on driving client experience and transformation on the consumer banking front, we are as focused as it can get on driving the client experience and transformation on the wholesale banking or corporate banking front
As an example, Abdelaal points to NEOBiz, Mashreq’s digital business banking platform exclusively for SMEs, start-ups and entrepreneurs. It was launched three years ago in the UAE and the bank plans to expand it to other markets.
“This is a state-of-the-art digital banking platform that addresses all the wants and needs of these types of clients,” says Abdelaal. “This includes a comprehensive ecosystem of services, providing access to trade finance platforms and transact transaction monitoring, as well as other value-add capabilities, such as legal and accounting services.”
Similarly, the bank is providing mid- to large-cap corporate clients in its wholesale banking business with innovative digital capabilities, across trade finance, supply chain finance, payments and cash management.
Together with this, Mashreq is also engaged in new development areas for the banking industry, such as open banking – empowering consumers and businesses with new ways to access a wide range of financial services – and banking-as-a-service (BaaS) on the retail side, which is the provision of banking products and services through third-party distributors.
“Our partnership with the likes of noon [an e-commerce marketplace] is a case in point where we are helping them through our banking-as-a-service infrastructure to start opening or facilitating financial services for their clients, whether it's credit cards or payment solutions,” says Abdelaal.
These new industry development areas will be catalysts for change in the banking sector, creating new growth opportunities as well as new competitors.
“Open banking is coming to the region in a big way,” says Joel Van Dusen, Mashreq’s group head of corporate and investment banking. “We expect the UAE to do it differently than other markets, probably taking an improved and more streamlined approach based on learnings from elsewhere.”
He adds BaaS is also an exciting area of growth, where Mashreq is essentially embedding its banking capabilities into the ecosystems of its clients. At this stage, this is already happening on the retail side. But Van Dusen thinks “we'll see that same concept move into the corporate world as well.”
Digital studio innovation
For many banks the digital innovation that happens within their operations tends to be concentrated in new teams that collectively form so-called innovation labs, or innovation hubs, or something similar.
For Mashreq, they have what the bank calls their digital studio, composing teams of digital experts that they refer to as their digital squads.
“We're one of the unique banks that have a wholesale digital studio, focused entirely on supporting the development of our corporate and investment banking business,” says Van Dusen.
“Within the studio we have hundreds of digital employees, such as coders and data scientists, who are working in squad format to help digitize our client journeys – enhancing them from a client experience perspective – and also developing digital assets for us to use to help drive revenue, to strengthen compliance, improve our read of our credit risks.”
We're one of the unique banks that have a wholesale digital studio, focused entirely on supporting the development of our corporate and investment banking business.
One of the areas that the digital studio has focused on has been in creating a gold data lake of information drawn from multiple sources such as shipping, trade, foreign exchange, and payments data. This information is then explored and interrogated to unearth fresh, actionable insights.
“We're using machine learning models to drive ideas from this information that would be very difficult for a human to simulate otherwise,” says Van Dusen. “Substantial amounts of data and ideas are then being fed to the relationship managers, which is driving new revenue opportunities for us.”
For example, the predictive models “that we have are able to prompt us and point to a particular FX opportunity or a financing opportunity that we may have missed.”
In addition to the internal investment in innovation that Mashreq is making, it also bolstering its innovative capabilities by partnering with fintechs.
“We spend a lot of time looking at fintechs that we can integrate into our client offering,” says Van Dusen.
One of the most recent examples of this was the agreement it signed early this year with UAE fintech, Fils, to develop a corporate carbon offsetting offering that helps corporate and institutional clients to integrate carbon offsetting directly from their Mashreq corporate accounts.
“Fils is looking to tokenize and automate the purchase of carbon credits,” says Van Dusen. “So as more and more companies focus on ESG and focus on their sustainable KPIs, carbon credits will become a natural need for our corporate clients, and we will be able to offer our corporate clients seamless access to these credits – on a tokenized basis – through our digital channels.”
As well as partnering with fintechs, Mashreq has also just launched NEO Ventures, a sandbox for fintechs to develop new digital offerings, on the Dubai International Financial Centre, and created an investment fund “to invest in fintechs that can be integrated into our businesses,” says Van Dusen.
Mashreq’s focus on leading change, fostering innovation and embracing collaboration and partnerships, falls under its broader commitment to operational resilience that ensures it maintains the highest standards of service delivery across all client and customer touchpoints.