Mashreq Bank's exec on digital transformation as key to strategic growth

Mashreq Bank, a financial institution in the MENA region, has maintained a presence in India since the 1980s, primarily catering to the overseas trade finance requirements of Indian corporates. However, in the last seven years, the bank has embarked on a strategic shift. It has significantly boosted its team and expanded its operational capabilities.  

In an exclusive interview with TechCircle, Mohamed Abdel Razek, Group Head of Technology, Transformation & Information at Mashreq Bank, provided insights into the bank's ongoing digital transformation journey. He detailed the technologies that the bank is currently focusing on and investing in, highlighting their pivotal role in reshaping the digital banking landscape. Edited excerpts: 
  
Can you describe Mashreq Bank's overall digital transformation strategy and the vision behind it?   

The bank is expanding beyond boundaries. Recently, we secured a digital banking licence in Pakistan and established a presence in Egypt, which highlights our growing franchise. While Covid-19 amplified our digital initiatives, our focus on innovation started well before the pandemic. For example, Mashreq was one of the first banks in the Middle East to implement ATMs (Automated Teller Machines). 

Our commitment to digital transformation began around seven years ago, long before I joined the bank last year. At that time, we formed dedicated teams to streamline customer journeys, such as onboarding, know your customer (KYC), cards, and payments. Covid-19 further accelerated our digitisation efforts, prompting us to modernise operations and enable remote work, even for traditionally paper-based processes. 

From Mashreq’s perspective, our growth has been driven by a combination of efficiency improvements and a strong data strategy. In the digital realm, cybersecurity and data quality are crucial. Our journey towards a digital future is not new but has been ongoing for years. 

Recently, we launched an SDK (software development kit) on the Etisalat business, E& Mashreq Neo, within a super app by Telco in Egypt. We continue to focus on financial inclusion and expanding our mass banking services. 
 
How your operations have changed digitally in India? 

In India, our operation functions as a corporate bank without a retail presence. However, we operate Mashreq Global Network (MGN), a shared service spread across multiple cities, making us an employer of choice for remote work. While we have offices in Bengaluru, our workforce extends to Chennai, Delhi, and Mumbai. We're not restricted to hiring in a single city. 

MGN has significantly grown over the past few years, particularly in technology. In my department, 60% to 70% of the staff is based in India, which boasts a rich pool of talent. 

We proudly leverage this talent to drive changes in user interface/user experience UI/UX, data, and more recently, artificial intelligence (AI). This flexibility allows us to access the necessary capabilities by tapping into India's talent. 
 
How digital transformation aligns with your business strategy? 

The strategy's foundation is centered on growth and digitisation, which drives business expansion. The focus is on enhancing client service and creating a fast, seamless digital experience. Investment was directed towards making the app and website user-friendly and efficient. 

With more secure and streamlined digital channels, business growth follows. The strategy aims to achieve significant digitisation to reduce costs, do more with fewer people, and operate at a faster pace. These all are made possible through digital transformation.

And can you say you've achieved a certain level? 

We measure everything because it all comes down to data. Whether it's turnaround time, straight-through processing percentage, the number of accounts we're onboarding through digital channels, interaction levels, or the decreasing footfall in our remaining branches, these are all capabilities we track. 

These metrics clearly demonstrate the benefits of digitisation. We measure growth, account increases, digital campaigns to boost deposits, loans, or cross-selling on cards. None of this would be possible without digital reach. 

What technologies have you used in your digital transformation journey so far, and what are your future plans or current investments in technology? 

To be effective in today's digital landscape, having a DevOps pipeline is essential. Whether using Jira or ADO (both are software development tools), these tools are crucial for quick, safe, and secure product releases. This ensures faster delivery of changes that are tested and resilient. 

For some solutions, leveraging cloud services or software-as-a-service (SaaS) is ideal. Instead of building everything from scratches, we can purchase tools for HR (human resources), finance, AI models, translators, and robotics. 

In other areas, we develop our own solutions. For instance, in the digital workspace, we utilise Microsoft tools. From Jira and ADO to niche providers, we develop code to deliver superior services efficiently.

When it comes to banks, data plays a very crucial role. So, how secure is the data that you accumulate from your clients?  

Data security is our top priority. While we can't claim absolute security, we are committed to securing it to the maximum extent possible. Being heavily regulated in the banking sector, we must manage our cyber posture, data leakage protection, and access controls meticulously. 

We take our data journey seriously, focusing on data in transit, data at rest, and who has access to specific data segments. Our comprehensive program for data quality management ensures continuous measurement and enhancement of data quality. 

As digital operations expand, so do our data sets. It's crucial to have the capacity and controls to manage this growth effectively.

How does your bank leverage technologies like AI, blockchain, or Internet of Things (IoT)? 

Let's focus on the most relevant topic which is generative AI. Our interest in AI isn't new, particularly with the emergence of Gen AI. Even before this, technologies like robotics and sentiment analysis, as well as risk assessment models, have been in use for several years. The bank has integrated AI and machine learning for at least four to five years, primarily at essential operational levels. 

Some argue that RPAS isn't AI, but in essence, it represents digitisation — a crucial aspect of programming machines to perform tasks traditionally done by humans. This foundational automation is what we might classify as everyday AI in the back office. Now, the shift is towards transformative front-office AI, which moves us into cognitive realms and conversational interfaces. 

To ensure responsible use, we're implementing a robust framework of policies and standards. Transparency and explainability are paramount; we can't deploy AI without understanding the rationale behind its decisions. Governance frameworks, policies, procedures, and standards are our first priority. Secondly, we're addressing literacy. Not everyone understands the nuances between AI generations, deep learning, and machine learning. We're promoting literacy from top to bottom, ensuring everyone from the board to executives and staff understand these concepts. 

Efficiency and productivity are crucial drivers. We're deploying tools like CoPilot to assist business users and developers in creating more reliable software. Recently, we certified 2030 developers in CoPilot usage, emphasizing robust coding practices. Executives and business users are also receiving training to leverage these tools securely on our Azure platform. 

Our approach emphasizes cataloging existing assets to understand their placement and benefits. Sponsorship is key; our CEO (chief executive officer) mandates an AI strategy across all departments, from finance and HR to risk, audit, legal, and business units (retail, corporate, international banking). Governance, sponsorship, literacy, and productivity are the cornerstones of our strategy. 

What upcoming digital transformation projects or initiatives are you most excited about? 

Our retail business continues to grow stronger, but what I'm particularly excited about our corporate transformation. We're shifting our focus towards digital frameworks that empower customers to manage their trades, cash, and FX (forex) positions independently. This means, we are significantly reducing the need for corporate branches and enhancing mobile capabilities to world-class standards. Imagine CFOs (chief financial officers) handling most of their tasks on the move, from approvals to generating reports, without being tied to their office laptops. These goals challenge us to deliver cutting-edge solutions, alongside our efforts in AI integration. 

Speaking of AI, consider the latest advancements, today's iPhones already feature conversational AI, enabling more intuitive interactions with your device. It's not just futuristic talk; now you can simulate conversations or even delegate banking tasks while enjoying your coffee. Imagine effortlessly asking your app to handle transactions, check balances, or execute tasks in the background. It's an exciting future where banking becomes as simple as having a conversation. 
 
How do you envision the future of banking in a fully digitised world?

Mass banking in the digital age requires infrastructure that's universally accessible. Not everyone owns an iOS device or has access to the Play Store with credit for data plans. The reality spans from top-tier devices with excellent connectivity to basic phones that rely on SMSs like decades ago. 

Considering this disparity in infrastructure and levels of digitisation, we were limited to fiber optics until GSM (Global System for Mobile Communications) networks brought data into the air. It was a game changer that allowed data access anywhere, even in remote areas with satellite coverage. This advancement is pivotal for digital banking services. 

Looking ahead, traditional banks will likely endure as trusted institutions, but how we interact with them will change drastically. Banking used to be paper-based or conducted over the counter, then ATMs brought withdrawals closer. Next came phone and web banking, and now we're moving towards conversational banking and wearables. Imagine managing finances directly from your watch, a technology available to someone today but not yet universally accessible. 

Banking services will continue to manage treasuries, lending, and economic systems, but the methods of interaction are evolving with concepts like open banking and open finance gaining traction globally. In places like the UAE, regulators are pushing for open finance, expanding beyond payments to include loans and other financial services traditionally handled by banks. This shift allows fintech companies to play a larger role, democratising financial services and increasing competition. 

Licensed financial institutions will remain central, but expect a proliferation of third-party providers offering specialised services, similar to how delivery services have diversified. Financial institutions will continue to play critical roles in the government expenditures, corporate lending, and global trade, balancing both retail banking volume and substantial economic value. 

In essence, while the core functions of banking remain, the ways we access and utilise financial services are rapidly evolving to be more inclusive and technologically advanced.  

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