Royal Bank of Scotland International is the latest global bank to stake its claim to a place in the UAE. Diana Milne meets CEO Ian Henderson to find out why.
When it comes to banking and finance – the Middle East is where the real action is. That’s the view of the Royal Bank of Scotland which joins the long list of other international financial institutions eager to grab a piece of the action in the region.
The booming economy and large population of expatriate high earners, particularly in the UAE, has created a strong demand for offshore banking services.
And that’s precisely what Royal Bank of Scotland International wants to tap into with the establishment of its Dubai office.
We’re looking at quickly establishing ourselves in Abu Dhabi once we’ve got our feet under the table in Dubai.
The office will offer offshore banking services and products designed specifically for expatriates and international customers and will also cater to international companies that relocate staff to the UAE.
Royal Bank of Scotland International CEO Ian Henderson describes why the UAE is such a lucrative market for his company: “We see signification potential in Dubai in particular. My international personal banking business is looking at British and Irish expatriate communities all over the world.
“And essentially we’ve got to prioritise where we go next.
“Having done the full analysis we’ve concluded that the ME was the top priority.
“The first decision was to go to the Middle East. The second decision was where.
“Because the biggest concentration of British and Irish expatariates is in Dubai we decided to open our first Middle East office there.”
He goes on to reveal that the company is also looking to open an office in Abu Dhabi where it also sees strong potential.
“We’re looking at quite quickly establishing ourselves in Abu Dhabi once we’ve got our feet under the table in Dubai.
“Our research indicates that A) there is a degree of demand there and B) there is a sufficient population that it might make sense.”
Royal Bank of Scotland’s presence in the region has been considerably strengthened through its acquisition of ABN Amro last year.
The bank acquired ABN Amro as part of a consortium with the Belgian bank Fortis and the Spanish bank Banco Santander paying a share of around US$20bn for its purchase.
Through the acquisition, the bank now has banking assets in Saudi Arabia and is currently assessing the potential for it to expand its services there as a result, Henderson revealed.
“On the back of the ABN Amro acquisition we’ve acquired banking assets in Saudi Arabia as well but right now RBS is focusing on the UAE.
“Because of the assets we’ve acquired in Saudi Arabia we’ll be assessing the market opportunities there and the nature of the assets required to assess what if anything they want to do in our part of the world.
“That’s not an RBS International task. It will be colleagues in other parts of the group that will be assessing the potential of the Saudi market.”
He goes on to say that the bank will also leverage on its existing Middle East presence through the private banking division Coutts & Co, a subsidiary of the Royal Bank of Scotland group.Henderson says Royal Bank of Scotland International will offer its full range of personal, affluent and private banking products in the region, including savings accounts, current accounts and savings products and a range of international mortgage products.
However he says the bank won’t be pushing one particular product in the region but that it will be constantly assessing the banking needs of its customers first.
“We’ll not be pushing any particular angle. We’ll be in dialogue with clients, figuring out what their requirements are. We’ll have the full range of products and services to meet those requirements competitively.”
Ensuring that we are policing against money laundering is a very important part of my job.
Henderson, who travels extensively across the world as part of his role, admits that running international banking services can pose some unique and difficult challenges.
One of the bank’s biggest concerns is the monitoring of possible money laundering activities.
He says RBS has good controls in place to ensure it is not used as a vehicle to facilitate money laundering – but that in international banking there is an inherent risk of this occurring.
“Ensuring that we are policing against money laundering is a very important part of my job.
“The reputations of RBS and RBS International are something we hold very dear.
“That’s why we have very strong controls in place to ensure that any suspicions are quickly acted upon.
“There have been no meaningful money laundering attacks on RBS International in my part of the job.”
He goes on to describe the risks associated with working with customers based in remote areas of the world – identifying Sub Saharan Africa as a particularly challenging area.
“A lot of our customers are internationally mobile or based in areas where there are inherent risks and its incumbent on us to minimise those risks.
“There are parts of Sub Saharan Africa that can on occasion be challenging and there are parts of Central and South America that can also be challenging.
“Communicating with customers across different time zones can be challenging.
“Often you need to have active dialogue with clients but there are timezone challenges and communicating with them by email can be risky because of the risks of interception.
From a Middle East point of view he says one of biggest challenges faced by the bank is the need to improve customer service levels – which he says are not currently up to the standards that they should be – particularly when it comes to delivering on promises and being there for customers when they require help or assistance.
“My perception is that there are some customer service challenges in the Middle East,” he says.
“And we certainly aim to bring Royal Bank of Scotland’s fantastic reputation for giving great customer service to that part of the world. What customers are telling us is that customers services and the banking services they are receiving are not what they are used to other parts of the world.
On a personal level Henderson admits that managing the bank’s international banking services from one end of the world to the other isn’t easy, joking “there are never enough hours in the day to do what you’ve got to do.”
He goes on to say that the current US recession in the subprime mortgage crisis mean that “we live in challenging times for banks”, but he firmly believes RBS can weather the storm ahead.
“The credit crunch is having an impact on all banks at the moment. I can only speak for my business and right now we’re still performing very strongly.
RELATED LINKS: Rising star
Follow us on
