By John Manning, International Banker
In January, the chairman of Mashreq Bank, Mr. Abdul Aziz Al Ghurair, described 2022 as a “transformative year” for the lender. As one of the United Arab Emirates’ (UAE’s) leading banking institutions for much of the 56 years since its founding, as well as one of the oldest banks in the Middle East and North Africa (MENA), such an assessment reflects the spectacular metamorphosis that Mashreq is undergoing as it strives to become the leading digital challenger bank in the region. And with unbridled success observed across key strategic business fronts—and its clients now expressing consistent satisfaction with Mashreq at levels rarely seen before—it has become glaringly apparent that as a regional powerhouse at the very forefront of banking innovation, Mashreq Bank has perhaps never been better positioned to realise its aspirations.
This ethos has been no more clearly exemplified in the real world in recent times than through the 2022 launch of “Rise Every Day”, Mashreq’s landmark brand identity, which has laid the robust foundation needed to become the region’s prime digital challenger bank. The brand seeks to encapsulate the bank’s relentless pursuit of excellence and is deeply rooted in Mashreq’s decades-old legacy of innovation. It represents the culmination of all the hard work the bank has undertaken to achieve the stellar market position it commands today, the hugely disruptive challenge it now poses to traditional banking’s status quo across MENA and beyond and the entrepreneurial spirit it has long enshrined to ensure it can continue to grow, evolve and move forward.
But while Rise Every Day certainly draws considerable strength from its illustrious past, it is nonetheless defiantly forward-looking—a clarion call to everyone associated with the bank to raise their games and ascend towards achieving lofty future goals. This has manifested in several tangible ways, most visibly via the introduction of ground-breaking digital solutions that simplify banking and thus ensure that Mashreq’s customers have the convenient financial tools needed to succeed. The spirit of Rise Every Day continues to ensure that Mashreq’s beacon of innovation within the banking sector shines the brightest.
To achieve this deep level of integration, the bank has adopted a data-driven approach that leverages advanced analytics to ensure its sustainability-oriented endeavours remain effective. The framework is also built to demonstrate Mashreq’s openness towards fostering collaboration, emphasising shared responsibility and pursuing continuous improvement in sustainability practices. By promoting responsible banking and excellence in ESG (environmental, social and governance) finance, the framework is intended to showcase the net positives for a wide range of potential stakeholders, including the bank’s retail customers, corporate clients, shareholders, employees and the broader communities in which the bank operates.
Ultimately, Mashreq’s main ambition in Pakistan is to become its go-to digital bank. By leveraging its unrivalled track record of successfully introducing digital innovations that are highly tailored to the unique needs of various markets, coupled with decades of stellar value creation for all stakeholders—from customers and employees to shareholders and the broader community—the bank’s collaborative approach with local partners (including fintech [financial technology] firms, regulatory bodies and other financial institutions) has become an unerringly winning strategy for co-creating value-driven solutions. In line with the aforementioned sustainability framework, Mashreq’s expansion efforts in this context remain anchored by its unwavering commitment to responsible growth, whereby short-term gains are superseded by its desire to create lasting positive impacts across all the markets in which it operates.
Indeed, 1,924 employees—or nearly 35 percent of Mashreq’s entire headcount—currently work outside of the UAE, including 66 in Egypt, 268 in Pakistan and 1,590 in India. As of 2023, the bank has relocated many employees throughout its rapidly expanding global network, which now houses more than 48 percent of Mashreq’s intellectual capacity across all functions and businesses. Not only does this illuminate the bank’s commitment to maximising the diversity of its talent pool but also its desire to harness a broad slate of perspectives to drive the bank forward. The bank can also proudly claim representation from 62 nationalities in the UAE and 69 globally—a true reflection of the diverse communities it serves.
By 2025, the bank aims to have representation from even more nationalities across the Mashreq global network, ensuring that it continues to be a melting pot of cultures, ideas and innovations ready to meet the challenges of the future.
To discuss these challenges and much more, we are joined by Mr. Ahmed Abdelaal, Group CEO of Mashreq Bank….
Innovation has always been part of Mashreq Bank’s DNA. What would you say has most exemplified this ethos during its history?
As one of the UAE’s first banks, Mashreq has been a trailblazer since its inception. Our history is dotted with numerous firsts, from introducing the region’s initial ATMs (automated teller machines) to pioneering credit-card services. This spirit of innovation is deeply embedded in our DNA, driving us to consistently evolve and cater to our customers’ ever-changing needs. This is fundamental to Mashreq’s entire approach to innovation and customer centricity. So, for Mashreq, customer-centric banking means building an ecosystem that offers our clients enriching experiences. This means moving away from merely creating products and propositions towards crafting experiences that bring value to our customers.
One of the most significant milestones in our digital journey has been the launch of Mashreq Neo, our full-fledged digital bank. Designed for a new generation of customers who live online, Mashreq Neo offers a comprehensive suite of banking services, all accessible via a user-friendly and agile app. It’s not just about online transactions but about providing a holistic digital-banking experience—from savings and investments to loans and forex (foreign exchange). Taking this experience further for Mashreq Neo’s NRI (Non-Resident Indian) customers, we have now collaborated with Kotak Mahindra Bank (Kotak) [an Indian financial-services company headquartered in Mumbai] to enable seamless digital account opening for its NRI customers in the UAE. They can now seamlessly open Non-Resident External (NRE) accounts and view both their UAE and NRE accounts on the Mashreq Neo App. This integration allows them to benefit from the best-in-class services and offerings of both Mashreq and India’s Federal Bank.
Further enhancing our digital offerings, we have expanded our services to cater to specific sectors, such as NeoBiz, which is dedicated to startups and has shown remarkable growth, reflecting its transformational impact on the UAE startup ecosystem. As the world moves towards a more interconnected ecosystem, we’re exploring integrations with fintechs and other tech platforms to ensure our customers always have access to best-in-class services.
Fast forward to today, and what are some key ways Mashreq, as a challenger bank, is currently disrupting the traditional local-banking model?
Mashreq is redefining the traditional banking model by placing customers at the heart of everything we do. Our ethos as a challenger bank drives us to constantly innovate with digital-first solutions, such as Mashreq Neo and Neo NXT, that offer unparalleled convenience and efficiency. One of our recent ground-breaking initiatives is our collaboration with Etisalat by e& (Emirates Telecommunications Group Company). Together, we launched the e& Neo service, enabling customers to initiate the bank-account opening process through the My Etisalat UAE app. This partnership is a testament to our commitment to digital transformation and financial inclusion, making banking even more accessible to a wider audience.
Another example is Mashreq Neo’s collaboration with India’s Federal Bank to facilitate end-to-end digital Non-Resident Indian account openings for its customers in the UAE. This collaboration offers a first-of-its-kind holistic banking experience for NRIs to bank digitally not only in the UAE but also in their home country.
Additionally, our Wholesale Banking division has been instrumental in providing tailored solutions to our corporate clients, further solidifying our position as a leading bank in the region. This commitment to digital innovation has ensured that banking is seamless and intuitive for our customers, earning us many accolades, including being named the Best Digital Bank for several consecutive years. From pioneering digital-only bank accounts to introducing interactive teller machines, we’ve consistently disrupted the status quo, ensuring that Mashreq remains synonymous with excellence in banking in the region and beyond.
You mentioned that you’ve “disrupted the status quo”. What qualities or features must a successful challenger bank possess in 2023?
In today’s digital age, a top challenger bank must be agile, customer-centric and technologically advanced. It should be able to rapidly adapt to market changes, offer hyper-personalised banking experiences and leverage cutting-edge technologies to drive efficiency and innovation. The bank must deeply understand customer needs, be committed to sustainability and have a robust digital infrastructure.
What, in your opinion, is the most innovative product, service or project the bank has recently launched?
In my opinion, the most innovative project we’ve embarked on recently is our AI-driven customer insights platform. By harnessing the power of data, we can offer personalised banking solutions, tailored advice and predictive services, ensuring our customers always feel understood and valued. While our past is rich with innovation, our future promises even more ground-breaking initiatives aimed at ensuring Mashreq remains synonymous with excellence in banking.
Besides AI (artificial intelligence), what key technologies is the bank employing or planning to introduce shortly to optimise the customer experience?
Besides AI, Mashreq is investing in a range of cutting-edge technologies to enhance banking experiences for our customers. We are leveraging blockchain for secure and transparent transactions, which is particularly vital given the emphasis on cross-border trade and remittances. The Internet of things (IoT) is another area of focus, allowing us to integrate smart-banking solutions seamlessly into our customers’ daily lives.
We are also exploring augmented reality (AR) to provide immersive banking experiences, potentially transforming how customers interact with their finances. Cloud computing, a pivotal technology for us, enhances our operational efficiency and scalability, ensuring that our platforms, such as Neo and NeoBiz, remain agile and responsive to market conditions.
Furthermore, our commitment to digital transformation is evident in our aggressive expansion into international markets such as Egypt and Pakistan. Platforms such as Neo and NeoBiz have been instrumental in driving growth across all our business segments. NeoBiz is dedicated to startups, reflecting its transformational impact on the UAE startup ecosystem. By integrating these technologies and expanding our digital footprint, we aim to offer our customers a banking journey that is not only efficient and secure but also innovative, delightful and truly memorable.
As CEO, how do you strive to cultivate a culture of consistent innovation within the bank?
I believe that innovation is the cornerstone of our success at Mashreq. I’ve always emphasised the importance of fostering a culture in which new ideas are celebrated and risks are embraced. We strongly encourage open dialogue, cross-functional collaboration and continuous learning at Mashreq. I believe in leading by example, so I actively champion new ideas from teams and ensure they have the resources and freedom they need to innovate.
Indeed, I can only imagine the absolute necessity of “continuous learning”. Are there any specific initiatives or training courses that help to foster an innovative spirit among relevant bank employees?
To institutionalise this culture, we’ve introduced various initiatives and training programmes. One of these initiatives is our bank-wide rewards-and-recognition programme called iValue, which acknowledges and honours high-performing individuals and groups that have created inspiring impacts with their innovative and implementable ideas to consolidate the long-term strategy and sustenance of the organisation. iValue is not a mere recognition programme but has generous monetary-award values, making it one of our most sought-after programmes among employees.
From hackathons to innovation labs, we provide platforms for employees to brainstorm, prototype and bring their ideas to life. We foster an environment of continuous learning and growth with regular training courses on emerging technologies, design thinking and customer centricity, ensuring our teams are always at the forefront of banking innovation.
You recently mentioned that the bank’s greatest achievement in sustainable financing to date was the $2.2-billion sustainability-linked loan (SLL) for nogaholding (the Oil and Gas Holding Company B.S.C.) in the Kingdom of Bahrain. Why was it so successful?
Our collaboration with nogaholding, now renamed Bapco Energies, on the $2.2-billion sustainability-linked loan is a landmark moment for Mashreq and the broader region. Not only did we lead the largest SLL in the region, but the loan, initially aimed at $1.6 billion, was two-times oversubscribed, culminating in a raised amount of $2.2 billion.
This achievement was even more significant given Bapco Energies’s position as one of Bahrain’s primary contributors to greenhouse-gas emissions. The company already leads in ensuring energy transformation and supporting the Kingdom in achieving its Paris Agreement commitments and comprehensive development goals.
This journey of transformation from a traditional oil-gas holding company into an innovative and progressive company that supports energy security and renewable-energy growth clearly reflects the success of this SLL, which we co-led with Gulf International Bank B.S.C. This success also underscores the region’s growing appetite for transition financing, highlighting the industry’s commitment to sustainable practices and the environment. It clearly indicates that businesses and investors recognise the importance of transitioning to more sustainable operations.
Do you envisage a consistent increase in interest and demand for such loan products going forward?
At Mashreq, we see immense potential in this realm and anticipate a consistent rise in interest in such innovative financial products. While the deal with Bapco Energies is a monumental achievement, we are eager to see even more records shattered soon, reflecting the region’s dedication to a sustainable future.
Looking towards the future, what is the most significant way that Mashreq will disrupt the banking industry’s status quo in 2024?
The banking industry is undergoing a seismic shift, and as a challenger bank, Mashreq is poised to lead this change. The most significant way we plan to disrupt the status quo in 2024 is by redefining the essence of banking, shifting from a transactional relationship with our customers to a deeply personalised, experience-driven approach.
We will focus on the “banking as a service” (BaaS) model, which revolves around creating experiences rather than just selling products and services. By leveraging cutting-edge technologies such as AI, blockchain and IoT, we aim to offer our customers a seamless, intuitive and hyper-personalised banking journey.
How will you achieve and execute this disruption?
To achieve and execute this disruption, we’re investing heavily in technology and innovation. We’re collaborating with fintechs, tech platforms and other industry disruptors to co-create solutions that redefine banking. Furthermore, our teams undergo continuous training to stay ahead of industry trends and ensure we are always equipped to meet our customers’ evolving needs. In essence, our vision for 2024 is to be at the intersection of technology and banking, offering solutions that are not just efficient but also transformative.
Mr. Abdelaal, your dedication to transformation will surely inspire other banks to strive to match your success. Thank you for your time today.