Mashreq Executive VP: The Changing Shape Of Retail Banking

How would you describe Mashreq’s retail performance in 2013?

2013 has been one the best years in Mashreq retail’s history; we aimed to target profitability, target service and target growth with a strategy to offer significant new value propositions via focus on digital and mobile technologies and customer centricity. Our ethos has been to constantly innovate across the whole retail spectrum.

We are most proud of are our E Cube (digital in branch experience using Microsoft 8), PayPort (remote access card acceptance on NFC), mobile enabled payments, Mashreq Max (that’s a bank on a tablet offered to the up market customer set)

These endeavours have led to a strong tangible growth for the business.

What were some of the challenges Mashreq and the wider retail banking sector faced this year?

The market here in the UAE is increasingly profitable yet dynamic so that naturally calls for timely and prudent regulatory measures.

The retail sector has to hence adapt to new rules as well as increasing demands from a customer base that is today more educated on proposition and more experienced with the use of digital channels.

The UAE market also has a large number of retail players delivering a very competitive frame. To survive if not succeed, banks need to find that differentiating edge – whether cost leadership, service leadership or innovation leadership.

Do you consider the introduction of the direct debit system in the UAE a positive step for retail banking?

Indeed. It is another successful initiative for the customer’s benefit. The UAE Direct Debit System is designed to eliminate the need to sign several post-dated cheques for installments when obtaining a loan/finance; this allows banks and finance companies to reduce their reliance on post-dated cheques.

This means more convenience for the consumers, quicker processes, and reduction of instrument handling costs for the banks. The UAEDDS also broadens the reach for the banks which would otherwise take a conservative stance of lending only to salary transfer customers.

What do you foresee being some of the largest challenges for retail banking in the UAE going forward?

– The retail banking sector needs to consolidate. The massive fragmentation may lead to imprudent lending practices, which is always a danger.
– There is undue price competition by players that seek to make quick gains in market share – this destroys the risk/reward trade-off, endangering bank balance sheets towards enduring financial stress in a down turn.
– Over speculation in the property sector with banks excessively supporting such activity will certainly cause a bubble and have the cycle of growth and prosperity reverse. It’s great to see EBF taking active measures in self-imposing code of conduct here.