With over two decades of banking experience, Egyptian born Ahmed Abelaal has long been an advocate for change and innovation. The latter, being the reason why Abelaal fell in love with Mashreq – the bank behind the UAE’s very first purely digital bank, MashreqNEO.
As a leading banking force in the UAE and MENA region – Mashreq has proved that while change may be inevitable, 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 effortlessly 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 workplace – a pillar that earned Mashreq recognition in this year’s Economic Times HR World.
With expansion plans to Pakistan well under way and countless initiatives such as MashreqNEO (the UAE’s first ever purely digital bank) and Neo NXT (a digital proposition for teenagers, designed to empower the next generation with financial literacy and a sense of personal financial responsibility), 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 the inspiration behind the bank that continues to revolutionize the region’s banking industry – spoiler, the answer lies with its people, its love of innovation, and its mission of supporting its customers to realize their ambitions – both in the real and digital world.
Looking at the 2022 financial 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 challenger 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 significant contributor to the revenue growth and profitability created in 2022.
RBG revenues grew by 42 percent year-on-year (YoY), and our flagship 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 profit 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 international banking group (IBG) remained focused on executing its strategic priorities and continued to strengthen the presence across its existing international 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 significant reduction in our risk charge. Underpinning all of this is talent, 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-specific approach to developing platforms for each sector – such as for Corporate and Investment 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 – 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 significant contributor to the bank’s revenue growth and profitability in 2022.
We were also able to deliver significant 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 bankers 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 first digital banking platform in the UAE to use facial recognition for bank account openings. In 2022, we launched Neo NXT – a digital proposition for teenagers that is designed to empower the next generation with financial literacy and a sense of personal financial responsibility. Neo NXT leaves the parents in ultimate control so that together, families can work to ensure that their children build responsible and successful financial lives.
Our focus over the coming period will be Neo for consumers and NeoBiz for business banking. We are expanding 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 significant hike in acquisition numbers over the last 18 months, thanks to our digital 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 promoting 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 catalogue. 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 reflection of our DNA – a digital first bank that provides best-in-class customer experience. Mashreq Neo was the first purely digital bank – a full-service, branchless bank – and the first in the GCC to provide access to international markets for investment opportunities, including foreign equities, gold trading and foreign currency accounts. It is the largest digital bank in the region that offers 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-service 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 first platform to introduce biometrics like facial recognition, but it has also differentiated itself through integration with other services and platforms.
We have integrated the mobile money transfer service, Klip, into the app; and integrated 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 first 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 existing 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, processing switches and point-of-sale (PoS) inventory to offer 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, and innovator. With a half century of delivering trust and best-in-class experience, Mashreq is harnessing the power of technology to offer access to a range of highly personalized banking solutions as well as innovative financial 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 professional fulfilment – beyond financial services. We now exist across multiple ecosystems, investing in financial and non-financial e-commerce solutions that form what we now are – and what we set out to achieve.
As NEO and our other digital platforms and services develop, we have to rely on state-of-the-art technologies, and we develop that in-house by building 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 products so that our customers view their relationship with Mashreq as a gateway to an entire suite of life solutions – both financial and non-financial.
Digitalization is not a differentiating factor, but a hygiene factor that we all need to have. Whether it’s Wholesale, Retail, TCM functions, 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 throughout my career, I have pushed the innovation agenda. At Mashreq, I came in as the first non-Ghurair family member to lead the bank, supported by an extremely forward-thinking, initiative-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 innovation 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 finance and advanced digital banking platforms. We have always considered Pakistan to be an attractive financial destination owing to the unprecedented growth and turnaround of the country’s banking sector in recent years. Our move into Pakistan’s banking sector with our digital banking solutions is indeed a seminal moment in Mashreq’s strategic expansion plans.
In January 2023, we announced that we have been granted a No Objection Certificate from the State Bank of Pakistan to commence the process of setting up a digital bank in the country. This means that we can now add enormous value by supporting investments in digitizing ecosystems across the retail, SME, Agri and payments landscape. 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 firmly believe that we can capitalize on Pakistan’s existing robust financial 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 digital finance and the wider digital economy in Pakistan through the deployment 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 economy with intricately interwoven financial systems. Furthermore, geopolitical events have yet again proven to destabilize global trade with major consequences like inflation 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 investment. Mashreq is leading this through its work in sustainable financing and ESG investments. We are also seeing enormous public and private sector investments and large-scale developments in infrastructure.
We should also recognize that the World Bank’s latest projections indicate 3.5 percent GDP growth for the Middle East this year and 2.7 percent for 2024. For the UAE, the IMF projects GDP growth of 4.2 percent for 2023. It also forecasts that inflation will fall from 5.2 percent last year to 3.6 percent this year and 2 percent in 2024. These forecasts will provide businesses, investors, and consumers with the confidence they need to continue to spend – and to attract foreign direct investment and talent from other parts of the world.
Mashreq is the UAE’s oldest – and probably best-known – bank. Looking back at the journey since launching in 1967, what would you say have been the greatest achievements?
Since it was founded in 1967, the bank has witnessed various milestones, these include but are not limited to the following:
Best Client Experience: When it comes to client experience, we were ranked number one in the UAE and the region for various corporate offerings voted by the clients globally, aligned to the company’s vision through delivery of best-in-class initiatives such as Corporate level (global transaction platform), Consumer (Mashreq Neo growth), SME (Success of Mashreq NeoBiz with partnerships and buildup of the ecosystem), NEOPAY (Smart Payment solutions), Noon strategic partnership for e-commerce.
Fastest-growing brand in the Middle East: The bank was ranked Fastest Growing Financial Services Brand in the Middle East in 2022 by Brand Finance, reflecting Mashreq’s growing consumer recognition through the best client experience and a determination to widen access to its unique products and services.
Best Place to Work: The change that we saw in the operating model with the introduction of centers of excellence and the adoption of the Work from Anywhere model to tap into the global talent pool has proven to be very successful within a short span of time, achieving cost efficiencies, with the organization being rewarded as one of the top 10 companies to work for by LinkedIn in 2022.
Diversity: From a diversity and inclusion perspective, I am incredibly proud of the bank’s extraordinary progress in building a truly diverse, multi-ethnic pool of talent in all the geographies where we work. Our gender diversity also made great progress in 2022. By year-end, gender diversity stood at 34 percent across the Mashreq Global Network (MGN).
We also saw a variety of Diversity & Inclusion (D&I) initiatives at MGN in 2022, such as the Mashreq Hope program, People with Determination, and Returning Mothers, with the latter soon being adopted group wide. All this progress – and more – explains why we have been recognized by Economic Times HR World through the Future Skills Award for D&I Learning Initiatives this year.
ESG: In 2022, we developed a robust sustainability framework that is being deployed across the network and consequently we implemented a series of ESG initiatives. We were the only bank from the region to sponsor Egypt’s COP27. Additionally, the fact that we have facilitated more than $15.5 billion of sustainable finance since the end of 2022, stands as a testament to our commitment to this cause.
Declaring 2023 as the year of sustainability by the President of UAE His Highness Sheikh Mohamed bin Zayed Al Nahyan will accelerate the UAE’s journey towards a greener economy and will act as a perfect segue to COP28, which is set to take place in the UAE this – we are very much looking forward to supporting it.
Your own career in the industry has seen a lot of changes in the last 20 years. Is this the most exciting/innovative time to be leading a bank?
In my 25 years in banking, I have never seen so much change. So much innovation and so much excitement in the banking sector. Our entire purpose as an industry has been revolutionized over the past decade, particularly in the few years running up to and since the pandemic.
Our industry is more dynamic and more complex than it has ever been – partly because we are not only competing with other banks with other industries. This is why our Banking as a Service innovation agenda is so crucial – it revolves around the shift from selling products and services to the creation of experiences.
The scale of change is impossible to overestimate because it is truly existential in nature. That is just one reason why Mashreq announced its new brand identity Rise Every Day in 2022. This was a historic brand launch for Mashreq and a pivotal moment in 2022. The new identity represents the very best of who we are and what we set out to do.
It represents Mashreq’s strong belief in helping its clients to succeed and to fulfil their aspirations. Moreover, it reflects our role in supporting our people to realize their ambitions and to facilitate building better lives and livelihoods in society through hard work and innovation, while delivering the best-in-class banking experience.
Where do you see Mashreq in 10 years from now – will it be, for example, a completely digital operation?
Without hesitation, Mashreq’s role as a digital challenger bank will see it adapt to the emerging needs of an increasingly digital economy. The bank has patently changed immeasurably and is a true digital leader. That said, it is important for us to remember that even as society adapts, there are many who risk being left behind.
As we evolve, we must ensure that every Mashreq customer has the access that they need to use the services that they quite rightly expect from us – both in the digital and the real world. We recognize that customers’ needs – and expectations – rapidly change; they are always evolving. Consumers are exposed to new channels and ways of living every day, which creates a never-ending impetus for innovation and change. As a bank, we now exist in a perpetual state of adaptation, with one eye on delivering what the customer needs today – and the other actively developing what happens tomorrow.
As a successful Group CEO, what advice would you give to aspiring leaders who want to follow in your footsteps?
It’s a bit early for me as a Group CEO to start giving advice, but as an industry veteran my answer would be what you would expect from any CEO leading a progressive work culture: which is to give the customer what he or she wants, needs, and expects. Never forget that a customer can walk away. If we understand our customers – and that is not always straightforward – then we are halfway there.
The second part of the answer I would give is to collaborate with others. No man is an island, and if we believe we have all the answers within ourselves, we will almost always fail. Success comes through collaboration by listening, sharing, and empowering others. Mashreq’s digital success is not my work or the work of any single person – it is the accumulation of a thousand ideas and passions – all steered in the right direction by a company with a clear, unified vision. It’s about unlocking creativity, letting people get on with what they do best, and listening to our customers.
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