EVP - Group Head of Operations & Technology, Mashreq Bank
Sandeep Chouhan tells Bloomberg Businessweek Middle East Editor Roger Field about the latest trends in digital banking, investing in fintechs and the importance of China’s belt and road initiative.
Mashreq Bank is the oldest private bank in the UAE having been established in 1967 as the Bank of Oman. Tell me about where the bank is at now in terms of size and scale.
The bank is in its 51st year of operation and we now operate in 14 countries. The bank was set up by entrepreneurs and retains that spirit of entrepreneurship.
We have close to five and a half thousand employees and close to 70 branches. We do the full range of corporate banking, investment banking, Islamic treasury, capital markets, retail and consumer banking, and now we have a full-fledged digital bank as a second segment.
We have four main lines of business in our corporate banking; we have taken an industry specialization-based approach and focus on six or seven industry segments including real estate, manufacturing, oil and gas and government. We build specialization around that and our corporate banking business is heavily based on face-to-face relationships with senior relationship managers and senior corporate bankers. The retail banking business on the other hand is digitally driven to bring more customers to consume banking services electronically. Today, almost 92 percent of all transactions we perform are digitally originated. That’s very high in comparison to our competition.
It sounds like technology is an important focus for the bank?
The bank has always invested in technology. At each era of technology evolution the bank has been able to refocus its business model through adopting the latest technology that is available at the time, whether it was introducing ATMs, bringing in credit cards, point-of-sale, through to mobile banking, digital and more recently leveraging technologies such as robotics and AI.
Leveraging technology has been fundamental to the business model and reinventing the bank. The bank has been very nimble in its ability to reinvent itself by using new technology; that is significant. The bank’s most recent transformational move is to focus around digital.
As technology organizations are beginning to enter financial services under the fintech banner, we as a bank are now beginning to think more like a technology company. So we are organizing ourselves like a technology company; we are developing our thinking and philosophy in that way. If our competition is technology then that’s where we would like to prepare ourselves. Our competition is unlikely to come from banks in the future.
We look to work with a lot of partners on technology. One of the things that the emerging digital economy is bringing out is the need to create and play in multiple ecosystems. Ecosystems by design allow for partnership models: they could be financial services, they could be technology companies, or they could be in the many industries we cater to.
The banks are providing the railroads for the underlying financial transactions that take place within that ecosystem. But the shift towards partners is twofold: One is we are bringing in and trying to incubate fintechs. We work with seven fintechs at the moment which are helping us deliver point solutions to point problems. These fintechs have a very deep understanding of those specific problems that they solve, they are passionate about it - and we in turn provide them the real world use-cases which allow them to industrialize and scale up their solutions.
Where do you find these fintechs?
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