< Previous10 AB FINANCE March 2023 FEAT URE | BL OCK C H A IN cryptographic tokens for depositing recyclables such plastic water bottles or cans, could increase both the rates and public interest in recycling. Thus facilitating in a greener, more envi- ronmentally friendly and responsible community. Energy usage can also be moni- tored, with a blockchain-based system improving access to power where and when it’s most needed. Traditionally, power supply grids are centralised, which sometimes creates inefficiencies in energy distribution, like having unused surplus. In nations a ected by natu- Application With blockchain-based energy systems, the need to transmit electricity over long distances is reduced ral disasters or poverty, power outages leave people without ready access to electricity. With blockchain based energy systems, however, the need to trans- mit electricity over long distances is reduced. As is the need for energy storage as energy trading can move electricity locally from where it’s being produced in excess to where it’s needed. So, can blockchain technology really help to make the UAE greener? The answer is yes. With increased awareness and research, it most certainly can. Adopting tech Ali Sajwani, Managing Director of Operations and Technology at DamacLuxury travel just found a new destination Dedicated to the world’s 36 million millionaires12 AB FINANCE March 2023 FEAT URE | TRADE BRI – the latest trade link between the UAE and China BRI seeks to strengthen connectivity and collaboration between different countries located along transport corridors in Afro-Eurasia The UAE has formed strong ties with China through strategic investments and collaborations The United Arab Emirates (UAE) and China are two of the world’s most important coun- tries in terms of global trade. As such, their respective trade trends have a signi cant impact on the global econ- omy. In recent years, the two nations have experienced an increase in bilat- eral trade, with the UAE forming strong ties with its Chinese counter- part through strategic investments and collaborations. BY JASON COKEarabianbusiness.com 13 TRADE | FEAT URE The gures In 2019, China emerged as the top trading partner for the UAE, surpass- ing India. That same year saw a total bilateral trade value of $90 billion between the UAE and China, which was up 17 percent from the previous year. This was driven largely by increasing exports from both sides – the UAE exported goods worth of $47 billion to China, while importing goods worth of $43 billion in return. The exchange Major commodities exported from UAE to China include petroleum products, precious stones, food and beverages, chemicals, and steel products. While imports from China to UAE include electronic equipment, machinery appliances and vehicles. The surge in the exchange of these commodities is indicative of strong economic links between both sides. Trade Petroleum is one of the biggest Chinese exports to the UAE The Future UAE and China’s trade will be propelled by the initia- tives such as BRI Innovation Both governments are working together to develop advanced technologies such as 5G networks BRI The UAE is leveraging its strategic location to expand its presence in China’s Belt and Road Initiative As part of this initiative, the two sides have taken steps that seek to further strengthen their long-term partnership. This includes encour- aging SMEs to explore potential areas where they can collaborate with their counterparts across each other’s economies. Additionally, both governments are working together to develop advanced tech- nologies such as blockchain solu- tions and 5G networks. The future It is evident that UAE and China have made tremendous e orts to build deep economic ties over the past few years – a mission that will only be propelled by initiatives such as BRI. With more investments being made into infrastructure projects under this initiative, we can expect this relationship to continue ourishing well into the 2020 - 2024 period. Petroleum, precious stones and chemicals are three of the biggest Chinese exports to the UAE The location The UAE is also leveraging its strategic location to expand its presence in China’s Belt and Road Initiative (BRI). The BRI seeks to strengthen connectiv- ity and collaboration between di erent countries located along transport corri- dors in Asia, Africa and Europe by investing heavily in infrastructure proj- ects designed to facilitate international trade. The move has opened up several new opportunities for investing busi- nesses operating out of the Middle East.CO VER ST OR Y | 14 AB FINANCE March 2023 14 AB FINANCE March 2023arabianbusiness.com 15 | AHMED ABDEL A AL COVER STORY arabianbusiness.com 15 BY KATE-LYNNE WOLM ARANS Ahmed Abdelaal – the powerhouse pushing Mashreq’s revolutionary digital mission From MashreqNEO to MashreqNXT, the digital future of Mashreq is here to stay and is here to help its customers life their very best, most active lives With over two decades of banking experi- ence, Egyptian born Ahmed Abelaal has long been an advo- cate for change and innovation. The latter, being the reason why Abelaal fell in love with Mashreq – the bank behind the UAE’s very rst purely digital bank, MashreqNEO. As a leading banking force in the UAE and MENA region – Mashreq has proved that while change may be inev- itable, the only way to succeed is to move with it and to adapt to it. An ethos that Mashreq, since its launch in 1967, has been e ortlessly excelling at. This could be due to its future thinking, as well as its ability to adapt to customer needs and its deep-rooted mission of inclusion and diversity in the work- place – a pillar that earned Mashreq recognition in this year’s Economic Times HR World. With expansion plans to Pakistan well under way and countless initia- tives such as MashreqNEO (the UAE’s rst ever purely digital bank) and Neo NXT (a digital proposition for teenag- ers, designed to empower the next generation with nancial literacy and a sense of personal nancial responsi- bility), we sat down with the Group CEO of Mashreq to better understand the many revolutionary changes taking place at Mashreq, as well as to uncover CO VER ST OR Y | 16 AB FINANCE March 2023 the inspiration behind the bank that continues to revolutionize the region’s banking industry – spoiler, the answer lies with its people, its love of innova- tion, and its mission of supporting its customers to realize their ambitions – both in the real and digital world. Looking at the 2022 nancial results, these are extremely impressive, with double-digit growth in every business unit. What is driving this growth? Mashreq delivered an exceptional performance in 2022, thanks in no small part to the commitment and dedication of the entire Mashreq team. Our people are our greatest asset; they are instrumental in our ability to deliver a superb customer experience and innovate our many award-winning products and services. Our people are also at the heart of in-house innovation capabilities – which are a fundamental enabler of our role as a digital disrupter and chal- lenger bank. That is how we have been able to welcome a record number of new customers and clients in 2022. As the backbone of the business, the retail banking group (RBG) acted as a signi cant contributor to the revenue growth and pro tability created in 2022. RBG revenues grew by 42 percent year- on-year (YoY), and our agship digital solutions, such as Neo and personal banking, saw net profit grow by 43 percent, while NeoBiz (Digital SME banking offering) and NEOPAY (Merchant acquiring solution) have grown in net pro t by 289 percent and 37 percent, respectively. Similarly, the corporate and investment banking group (CIBG) revenues grew strongly, with a 37 percent YoY growth. The inter- national banking group (IBG) remained focused on executing its strategic prior- ities and continued to strengthen the presence across its existing interna- tional markets with a YoY growth of at 43 percent and revenues at 25 percent. The other key contributor to our bottom line was our prudent risk management strategy that greatly improved our asset quality and led to a signi cant reduction in our risk charge. Underpinning all of this is talent, Mashreq Global Headquarter in Dubai A closer look at MashreqNEO, the UAE’s very rst purely digital bankarabianbusiness.com 17 | AHMED ABDEL A AL creativity, hyper-personalization of products and services, and advanced digital platforms that make it possible for us to make our customers and clients succeed. There has been strong growth in your consumer base – is this driven by the new digital platforms? Double-digit growth was recorded across every business unit in 2022, with particularly impressive expansion in the Corporate and Investment Banking Group – which grew 37 percent year- on-year, Global Transaction Banking, and the Investment Banking business. These successes were due in no small part to the successive launch of innovative new digital products in 2022 and our sector-speci c approach to developing platforms for each sector – such as for Corporate and Invest- ment Banking, NEOPAY and NEOBiz, which was the first digital banking platform in the UAE for start-ups. If you look at the suite of digital retail banking products and platforms, we have developed – such as Mashreq or Neo NXT for the next generation – 3.5% The Middle East’s projected GDP growth, according to The World Bank digital proposition for teenagers that is designed to empower the next generation with nancial literacy and a sense of personal nancial responsi- bility. Neo NXT leaves the parents in ultimate control so that together, fami- lies can work to ensure that their chil- dren build responsible and successful nancial lives. Our focus over the coming period will be Neo for consumers and NeoBiz for business banking. We are expand- ing to new markets, such as Egypt and Pakistan, and scaling up our presence in the GCC. We are also working to build state-of-the-art technologies that enable us to acquire clients through experience, not promotion. Consequently, we have seen a signi - cant hike in acquisition numbers over the last 18 months, thanks to our digi- tal proposition. As in previous years, partnerships will remain a core strategic approach to our digital development in 2023 – and integral to our ability to be where our customers are. In 2022, we signed a long-term partnership with the UAE Padel Association to champion the sport throughout the country and promote exercise and well-being across the UAE population. We have also partnered with the biggest Padel clubs locally in the UAE and in Egypt to further achieve our mission of promot- ing exercise and healthy living. We have also signed a strategic regional partnership with Anghami to further enrich the user experience of our Mashreq customers in the UAE – we will give new customers or those transferring their salary to a Mashreq account the opportunity to enjoy ad-free and restriction-free access to Anghami’s entire audio and video cata- logue. When calculated, that’s over 72 million songs, 400 thousand podcasts, videos, exclusive concerts, and more. Neo has been very well received by customers – how does it differ from other digital platforms launched by other banks? Mashreq Neo is a true re ection of our DNA – a digital rst bank that provides best-in-class customer experience. you can understand why we have been named the Best Digital Bank yet again. Their enormous popularity also explains why as the backbone of the business, the retail banking group (RBG) has acted as such a signi cant contributor to the bank’s revenue growth and pro tability in 2022. We were also able to deliver signif- icant international expansion in 2022 thanks to the strength and popularity of our digital platforms. In Pakistan, we were recently granted a “No Objection Certificate” from the State Bank of Pakistan to commence the process of setting up a digital bank in the country. Now that we have the green light to commence digital banking operations there, we are building a team of bank- ers and engineers with multicultural experience to bring our proven Neo banking capabilities and world-class technologies to Pakistan to address the evolving banking needs of the nation’s consumers. Can you expand on these platforms – how successful have they been, and what new digital products/concepts are planned for the coming year? Since its development and launch, Mashreq NEO has acted as a leader in digital banking innovation – it was also one of the rst digital banking platform in the UAE to use facial recognition for bank account openings. In 2022, we launched Neo NXT – a NEOPAY o ers a seamless payment experience for merchants and consumers” CO VER ST OR Y | 18 AB FINANCE March 2023 Mashreq Neo was the rst purely digi- tal bank – a full-service, branchless bank – and the first in the GCC to provide access to international markets for investment opportunities, includ- ing foreign equities, gold trading and foreign currency accounts. It is the largest digital bank in the region that o ers a full suite of banking products, both transactional and discretionary services and investment products. Neo is not just an account, credit card, or digital wallet — it is a full-ser- vice bank with a strong suite of retail banking products in the palm of your hand, that provides fast and easy onboarding. Not only was NEO the rst platform to introduce biometrics like facial recognition, but it has also di er- entiated itself through integration with other services and platforms. We have integrated the mobile money transfer service, Klip, into the app; and inte- grated the Mashreq API in Noon. This allows customers to start shopping immediately after applying for a noon. com membership. Mashreq NEO has also tied up with the Federal Bank to facilitate Rupee account opening for Indians in the UAE, making it the rst of its kind. We have also launched the first-ever bank-to-bank integrated digital journey for Mashreq Neo customers to open a non-resident Indian account. Additionally, Mashreq has completed the transition of its exist- ing payments business into a new, wholly owned subsidiary, IDFAA Payment Services LLC, with the brand name NEOPAY. NEOPAY leverages the latest technology and innovations, including card processing and merchant acquiring systems, process- ing switches and point-of-sale (PoS) inventory to o er a seamless payments experience to merchants and consumers. Mashreq continues to innovate – how important is this for the future success of the bank? Mashreq is one of the region’s oldest financial institutions, with its roots deeply embedded in innovation. We proudly think like a challenger, startup, Rise every day, Mashreq’s newest brand identity represents its strong belief in helping its clients to succeed and to ful l their aspirations 289% The year-on-year net pro t percentage of NeoBiz and innovator. With a half century of delivering trust and best-in-class experience, Mashreq is harnessing the power of technology to o er access to a range of highly personalized banking solutions as well as innovative nancial products and services, to meet their personal and professional goals to Rise Every Day. Our story has been defined by a readiness to adapt – and we have forged a unique role as leaders of change. Our new role, as we invest in digital and e-commerce solutions, is as an enabler of personal and profes- sional ful lment – beyond nancial services. We now exist across multiple ecosystems, investing in nancial and non- nancial e-commerce solutions that form what we now are – and what we set out to achieve. As NEO and our other digital plat- forms and services develop, we have to rely on state-of-the-art technologies, and we develop that in-house by build- ing everything for API. Perhaps most importantly, we are leading the way in open banking toward what we call Banking as a Service (BaaS). BaaS is a game-changer, opening up the banking platform to partner services and prod- ucts so that our customers view their relationship with Mashreq as a gateway to an entire suite of life solutions – both nancial and non- nancial. Digitalization is not a differen-arabianbusiness.com 19 | AHMED ABDEL A AL Certi cate from the State Bank of Paki- stan to commence the process of setting up a digital bank in the country. This means that we can now add enor- mous value by supporting investments in digitizing ecosystems across the retail, SME, Agri and payments land- scape. We plan to introduce our full stack Neo Banking capabilities to address the ever-evolving customers’ needs while supporting the larger National Financial Inclusion Strategy of Pakistan. I rmly believe that we can capital- ize on Pakistan’s existing robust nan- cial infrastructure to greatly enhance the banking experience by delivering customer-centric solutions through our products and services. Mashreq will, without a doubt, prove to be a catalyst in leading the evolution of digi- tal nance and the wider digital econ- omy in Pakistan through the deploy- ment of truly transformational banking platforms and solutions. Looking at the wider economy, the latest S&P Global report forecasts a slowdown in UAE growth in 2023. How do you see the year ahead? What are the key economic challenges we face? Do you feel the region is insulated from any prolonged recession in the west? First, no region can be fully insulated from global challenges – we live in a deeply interconnected global econ- omy with intricately interwoven financial systems. Furthermore, geopolitical events have yet again proven to destabilize global trade with major consequences like in ation and interest rate hikes. That said, I believe that the GCC – and the UAE specifically – is in an unusual position of strength. We have a concerted political agenda for the green economy, which provides us with enormous opportunities for invest- ment. Mashreq is leading this through its work in sustainable nancing and ESG investments. We are also seeing enormous public and private sector investments and large-scale develop- ments in infrastructure. We should also recognize that the World Bank’s latest projections indi- MashreqNeo is not just an account, it is a full-service bank in the palm of your hand tiating factor, but a hygiene factor that we all need to have. Whether it’s Wholesale, Retail, TCM func- tions, Credit, Ops – it›s something that we live by and we will continue doing that. The core differentiator is to use technology transformation and digitalization to deliver the aim – which is to offer a superior client experience. How much are you personally involved in leading the innovation – is this one of the core roles for you today? I have over 25 years of experience in progressive banking roles with some of the world’s biggest names, and through- out my career, I have pushed the inno- vation agenda. At Mashreq, I came in as the rst non-Ghurair family member to lead the bank, supported by an extremely forward-thinking, initia- tive-taking, and pro-innovation Board of Directors. It was clear to me from day one that innovation had always been in the Mashreq DNA and that it had always been a core strategic priority – and that made it easy for me to accelerate the bank’s role as a digital challenger bank. Day-to-day, I have the privilege of working hand-in-glove with our team of innovators and our many digital partners to accelerate the bank’s inno- vation agenda, and I am actively involved in always pushing for more. I believe that it is imperative for the entire Board of Directors to ‘get it’ when it comes to our role as a digital challenger bank and to recognize what that means for our customers – and for our sustainability and success as an organization. Without question, the entire Board of Directors gets it and that is why Mashreq is the region’s number one digital bank. You recently described the obtaining of a digital license in Pakistan as a “seminal moment” – can you expand on this, including what you see as the key opportunities there? Mashreq has a fantastic opportunity to accelerate investment in these parts of the world and to deliver greater access to liquidity, trade nance and advanced digital banking platforms. We have always considered Paki- stan to be an attractive nancial desti- nation owing to the unprecedented growth and turnaround of the coun- try’s banking sector in recent years. Our move into Pakistan’s banking sector with our digital banking solu- tions is indeed a seminal moment in Mashreq’s strategic expansion plans. In January 2023, we announced that we have been granted a No Objection Next >