World Finance interviews Farhad Irani, Executive Vice President and Head of Retail Banking Group of Mashreq, one of the UAE’s top financial institutions
World Finance: What are the major challenges facing banks in the UAE?
Farhad Irani: We see the population target market and the opportunities emerging and growing in the next 8-10 years. However, with this dramatic growth come challenges. Fundamentally, we’ve got changing consumer behaviours. Customers are moving significantly and fast towards digital channels. 75 percent of the existing set of mobile phones in the UAE are smartphones, and the penetration of smartphones to the population is about 1.3-1.5. Banks have to move with the times in developing interfaces that are more digitally inclined. The UAE is a very interesting market; it has a target banking population of about 4.5 million that’s growing very fast, as I mentioned, perhaps 6.5-7.5 million in the next couple of years. But you have 51 banks, and about 30 of them are operating the retail banking space. So one can imagine the amount of competition. Finally, a very positive step forward for the UAE is the emergence of the credit bureau. But, as in any environment, when the bureau is initially launched, there is a certain amount of disruption. Disruption in the segments that are slightly over-leveraged.
World Finance: The UAE Banks Federation has adopted a code of conduct for its members. How do you see this impacting banking?
Farhad Irani: It’s a commitment to the customer, in that banks will operate in a fair, transparent manner, and that redress will be swift and just.
World Finance: Well Mashreq has achieved uninterrupted, profitable growth for the last half decade, so what would you say your key to success is?
Farhad Irani: 50 percent of its success comes due to its leadership. The other attributes to our success is, I think, we’re the right size. Because we are privately owned, we have all of 4000 people, we operate in 13 markets, we are the right size, and we able, nimble, agile, and we can deliver change pretty quickly. “Banks have to move with the times in developing interfaces that are more digitally inclined”
World Finance: What unique services do you offer and how are they tailor made towards the customer?
Farhad Irani: Coming to a bank is not exactly the most exciting objective of one’s day. But what if this experience in the bank branch were akin to the experience one has when you walk into an Apple store? Touch, feel, the excitement, the game-ification. It’s these attributes that we brought into our branch. Bank loyalty is fleeting, especially in this day and age where competition abounds and it’s so easy to open another account online. At Mashreq we aim to hold on to our customers through thick and thin, through generations of customers if you will. And we’ve invested specifically in universal reward programs that allow the customer to get something back.
World Finance: Mashreq leads the way in terms of smart banking. Why is this important in the UAE?
Farhad Irani: The UAE has a bankable population that is wealthy, that is upwordly mobile, very educated, and just about everyone holds a smartphone and an ipad and a tablet. These consumers are worldly-wise, haven’t been raised in the UAE but come in from the west, from Europe, from Asia, from Australia, and they have to juggle many balls. They’ve got to manage their finances onshore and, at the same time, handle their finances back home. At the same time, on the ground, Mashreq has 48 branches, and we have about just over half a million customers. If we keep increasing our branches to cater with growth, the economies of scale get disrupted. So a win-win situation emerges: what if we were able to cater to emerging and futuristic consumer needs by investing in the digital stream? Smart banking in Mashreq is usually termed as EQ: engage, experience, and evolve. Our investments in technology are manyfold, but the most notable of them relate to what we’ve done with our branches. Three of them already, 10 of them before the first quarter of next year is out. In these smart branches, customers engage with digital wallscreens, where they explore services that the financial institution has to offer by hand gestures. When they walk into the branch, they have access to smart tablets. There’s no paper on the telecounter, the transaction is punched in through tablet, the transaction goes straight to the telecounter where the consumer goes and consumes the transaction. If the consumer seeks advice, he walks up to a relationship manager. Microsoft aids smart tables instead of normal word furniture and the relationship manager actually takes the customer through many simulations. That simulation can be fitted into the customers needs in terms of affordability, return, yield, etc. “At Mashreq we aim to hold on to our customers through thick and thin”
World Finance: And finally, you’re now looking to develop your services domestically and overseas, so what’s in the pipeline?
Farhad Irani: Dubai was created on the back of trade, Mashreq was created on the back of trade. You have a whole bunch of countries within the region that have growing trade ties with the UAE. This is what Mashreq leverages. We have a presence in over 13 countries at this point in time. Moreover, the prowess that we have in retail banking in the UAE, being the leading retail banking presenter of financial services in this market, we aim to leverage that capability, that skill set, that management team into other neighbouring countries that throw up big retail opportunities.
World Finance: Thank you.
Farhad Irani: It’s been a pleasure. Thank you.