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March 31, 2021updated 13 Apr 2022 5:05am

How corporate banks in MEA are reimagining their services to achieve growth

Banks in the Middle East and Africa are spending billions to fast-track digital adoption, mobile banking and contactless payments to keep up with changing consumer behaviour brought about by the pandemic, according to Wissam Khoury, head of international at Finastra.

Khoury made his remarks when moderating a panel discussion at Finastra Universe, an annual event that attracts thousands of senior level technologists and C-suite executives across financial services. Now in its 6th year and available online, visitors can discover over 100 thought-provoking sessions.

During his opening speech Khoury revealed the results of recent Finastra research, which found that most corporate banks plan to position themselves predominately as platform players across lending, trade finance and cash management over the next five years.

“Priorities will change by 2025,” he explained. “Relationship management will slip to the lowest priority for servicing corporate clients. We see that banking portals and value-added services have become top priorities. Quite simply, corporates are looking for ever-increasing connectivity. They want faster services, more choice of services and they want to do it when and where they want.”

Khoury interviewed leading figures at several of the largest banks in the region to see how they are achieving growth through today’s challenging economic environment.

Dr Tomisin Fashina, chief information officer at Ecobank, a pan-African banking conglomerate with banking operations in 36 African countries, revealed the bank’s plan to deliver Banking as a Service. It provides homogenous digital banking service to all 36 countries. Fashina likens it to a “financial highway” that enables any financial institution to “piggyback” on their platform and deliver financial services to any of their markets. Ecobank aims to reach 100 million customers from 24 million.

“Ecobank is marrying technology with existing infrastructure, making use of its wide reach across Africa,” Khoury explained. “To facilitate the movement of cash and payments between financial institutions it is using its own clearings system, providing it as a service to financial institutions and SMEs. The beauty of this plan is that it is purely an efficiency play. Ecobank is not taking money from anyone. It’s solely about connectivity, utilising technology and partnering together on innovation. I think we’ll see more of this business model as we move forward.”

Ronald Mutandagayi, group chief executive of ZB Financial Holdings Limited, revealed a tale of two financial systems in Zimbabwe: the traditional and the modern. Mobile payments have become mainstream in Zimbabwe, established in the retail world before moving into the corporate. ZB is also reinvesting in its digital platforms and moving services over to the cloud to ensure customer costs remain low. However its most ground-breaking initiative is social media banking. In a region where mobile-uptake is high, ZB Financial Holdings has launched WhatsApp banking services to encourage greater financial inclusion. The second phase is currently under development and will cover things like bill payments and corporate-to-corporate payments.

Next Antranik Tcheboukjian, head of technology: corporate investment banking at First Abu Dhabi Bank (FAB), revealed a three-point plan aimed at modernising its Banking as a Service offering. The bank hopes to achieve that by moving customers from mobile to an online platform with full end-to-end access to CIB products, with services from account management, global market trades, all consolidated onto one platform. First Abu Dhabi Bank also runs FABRIC, which stands for FAB Research and Innovation Centre, a dedicated team of 15 who in part scout the market looking for fintechs to support. FAB says it plans to develop modular banking systems in which its services can slot into its banking platform, and will make its APIs freely available to financial institutions.

Khoury also spoke to Mohammad Nasr Ullah, head of trade and transaction banking solutions at Arab National Bank. Arab National Bank is focused on customer experience and making sure that its services excel as a way to achieve growth through the pandemic.

Ullah said reconciliation tools are increasingly important as digital transactions become ubiquitous, which in turn increases the risk of fraud. Another area of focus for Arab National Bank is fintechs. It seeks to “become an enabling bank” in the market and has recently collaborated, sponsored and supported fintechs in sectors ranging from e-commerce to e-wallets. It believes that partnering with fintechs is a sure-fire way for banks to achieve growth through challenging economic circumstances.

Khoury agreed. “Finastra completed a study last year that looked into the differences between banks and fintechs. Four years ago banks used to compete with fintechs. Now they know the value of partnering. The big difference was that nearly 90% of work processes in fintechs were based on putting the customer at the centre; whereas financial institutions, traditionally, have things like profitability, regulation, compliance to contend with and so the customer took a bit of a backseat, gaining around 60% of their attention. Collaborating or partnering with fintechs is useful.”

Khoury closed the panel discussion with some thoughts on the future.

“This is an excellent opportunity for fintechs, regulators and financial institutions to come together to bring efficiency, new revenue streams and to change for the better. We will likely never go back to where we were before. This is a new era for us where we are better able to service our clients, better able to reach new clients, and better able solve all financial problems in the market, be it the unbanked, be it financial markets, or within banks themselves. This is an opportunity for all of us.”

Click here to watch the full event, available online until 2 April.

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