mashreq continues to invest in their transaction banking offering. Rahul Jayakar Head mashreq’s Global Transaction Services, products and Trade, shares the bank’s philosophy and ideology to Cash & Trade.
1.What are the main challenges facing the UAE corporate CFOs when it comes to their cash and trade requirements, and where do you see Mashreq tackling these challenges from both product and service offerings?
Rahul: Mashreq’s products and services continue to revolve around our clients who are indeed central to our long term goals, and we are always striving to fulfill their needs on an end-to-end basis. Analyzing the challenges of our clients and key decision makers is of paramount importance for us. The key objectives for the corporate CFO is to align financial strategies in line with business goals and at the same time be nimble to take advantage of opportunities. With the market situation being very dynamic, key challenges revolve around risk, controls, Information, Access, Liquidity and efficiency. Based on understanding the clients objectives behind overcoming the identified challenges makes it easier to provide the right solution and address the challenges, that’s been Mashreq’s Mantra.
We are also witnessing a transformation, identifying the processes that could be automated; most of the large corporates are investing in technology and at the same time looking at their banking partners to provide them with appropriate integration with their own ERP. The advantages are quite evident, quicker information to take important decisions, stronger controls and faster reconciliation for both receivables and payables. All this helps in overcoming any challenges that may surface. CFO’s are seeking value added services, which can make a difference to the finance function, this could be process driven or new product feature / functionality driven; the end result is largely to give an edge against competition or a tangible benefit. This year we have presented a number of industry first solutions, which have also won accolades; the awards and the recognition itself is a testimonial to the quality of solution, its acceptability by clients and the positive impact to clients business.
2.How much impact smart devices made with the UAE corporates and if it’s fully embraced when it comes to transaction approval?
Rahul: Innovation is core to our philosophy and the Mashreq ideology of ‘we make possible’. Mashreq’s focus on innovation is as significant as offering unique financial solutions coupled with the most advanced safety measures.
The users at the client’s offices are also individuals like us who hate clutter, I mean multiple token’s etc; hence we came up with a Mobile pass, which eliminates the need to carry another device on them. Moreover, everybody likes to have access to information; hence we developed a mobility solution covering the enquiry and transaction authorization functions for corporate users.
The developments have been done with a lot of thought going into it i.e. the transaction mobile app (mashreqMATRIX Edge) is complemented by a soft token app (Mobile PASS) which enables the corporate user to securely generate the token which can then be seamlessly used while authorizing the transaction on mashreqMATRIX Edge. This unique dual mobility solution has converted the corporate customer’s smart devices into a truly mobile corporate transaction bank. The solutions are supported across both Android and Apple platforms. Multiple profiles can be configured under a single soft token app. Customers are no longer required to carry bulky multiple physical hard tokens when away from the desk.
The mobility apps have enticed a good response from corporate users especially the Senior Management (Authorizers) who are finding it very convenient for approving the transactions via the mobile app. The app also complements the UAE government vision of doing all transactions through SMART devices and making Dubai a Smart City.
3.Where do you see the pan regional trade business moving and the role mashreq playing to facilitate trade among customers within the bank’s network?
Rahul: As per WTO report published this in April 2016, trade growth globally has been subdued and uncertainties weigh demand in 2016. Middle East as a region has seen as decline in exports largely due to the fall in oil prices. The slowdown has its impact on larger economy and briskness in trade giving rise to the challenges that we discussed earlier. Mashreq is present in 12 countries, out of which 8 locations are branches of the head office (UAE). Our presence locations include financial hubs like New York, London and Hong Kong. The focus on capturing trade corridors that exists across presence countries has been a successful strategy.
Mashreq has over three decades of experience in providing trade and supply chain finance and offers an extensive range of trade related services to customers in different sectors including manufacturing, services, construction, retail and transport. Mashreq has a range of working capital solutions in open account factoring and buyer/vendor finance services that ensure adequate funds to deal with expenses, cost-effective sales & receivables ledger management and collections, and assured supply channels.
Mashreq was recently empaneled with one of world’s specialist insurance market which enables it to offer guarantees, making it one of the only two banks in the region to do so. Our solution to unlock value of receivables for trading companies i.e. leveraging on sales contracts, to complete their procurement requirement has helped clients expand business. Our industry specific solutions were chosen by judges as some of the most innovative in the field of trade finance, more importantly fulfilling our client’s needs.
4.Do you see growth continuing with open account offering given the recent downgrade to some of the GCC countries by credit agencies?
Rahul: We do see the tepid growth in open account, which resonates with the sentiments around the trade in the region, largely driven by commodity and oil prices. There are multiple of reasons for the sustenance of the open account business within GCC in spite of the downgrades and they are;
- Clients are doing / have started to do, their own due diligence on their counter parties at the time of entering in to contracts.
- The cost of doing open account transactions is much cheaper than the traditional trade transactions and clients are looking in to unlocking their receivables through this means.
- Much of the medium to large corporates are run as family owned businesses, which are in existence for a long period with no or very low default history, hence established credibility.
- Long and established trade relationship between the parties.
- Increased availability of open account trade solutions from financial institutions combined with technology, which helps in speed of transaction processing and realization of funds (lesser documentation / involvement of banks / discrepancies etc).
5.With all regulatory challenges and requirements how do you see mashreq playing a role in making the corporate customers life easier, at the same time adhere to all the regulation and compliance measures ? And who usually pick up the cost?
Rahul: Being a regional bank with presence in some of the largest financial hubs globally is imperative for us to meet the requirements of our regulators in the respective country.
Meeting the requirements of regulators is extremely important to make the ecosystem in which we do business, a much more safe and financial crime free. To meet with regulatory requirements needs to be looked upon as an opportunity to promote a culture of operational excellence and significantly improve controls.
Mashreq is well aware of its role in terms of educating corporate customers to understand, why it is important to meet the regulatory and compliance requirements. In order to help and make it easier for customers, Mashreq is investing in developing solutions that will address this. Digitization has been taken up as a key theme within the bank where the customers can feel the differences it makes in terms of their transaction processing, speed, accuracy, finality. In addition, Mashreq is also investing time in educating customers on the demands and importance of meeting the regulatory and compliance requirements so that the actions taken by them safeguard their businesses.
6.Recently we have seen an increase of Fintech companies moving in the banks space and filling gaps between the banks and their customers, where do you see such transformation when it comes to the UAE market?
Rahul: Mashreq is committed to become the Corporate digital bank of the future and the state of the art integrated transaction banking online platform mashreqMATRIX continues to evolve as an online banking channel, in addition to mashreqMATRIX, the bank has a new mobile channel to get closer to its corporate clients through mobility app.
State of art integration of clients ERP with mashreqMATRIX through Host-to-Host services now provides further convenience to corporates for their payables, receipting and reconciliation. Supporting the digitization drive is innovative, proprietary collection service “Mashreq Monster”, which enables real time collection of cash at customer premises. In a nutshell, we have invested in technology which can bring convenience and ease of doing business right into forefront for the client.
As the world is getting more and more technologically savvy, with millennials playing an important role, we can see how fast customers are adapting to digital solutions. I think the time is right to re-look at the traditional infrastructure and bring in new innovative technology that improves efficiency and transparency. Information, liquidity and control are key for every corporate – and putting all these elements together can help to mitigate risk. Digitization is critical in terms of our offerings going forward. At Mashreq we keep reviewing our products and processes consistently in order to achieve higher degree of automation.
There are a number of Fintech companies offering solutions and we are closely monitoring this space. Banks have structural challenges which have been overcome by Fintech with their nimble infrastructure. At Mashreq, we continue to invest in technology across products and processes. We are sure that transformation will take place towards acceptance of solutions offered by Fintechs, however in this region; it is still some time before embracing solutions lead by non-banks.
Rahul Jayakar is an experienced banking professional having worked in large multinational and regional financial institutions in the UAE and India.
Rahul Jayakar was named by Global Finance in its list of Who’s Who in Treasury & Cash Management 2016. Global Finance states ‘The individuals that we honour in Global Finance’s Who’s Who in Treasury and Cash Management are those that have been recognized as best in their field by their peers and colleagues, and by our own Editorial Board. They are well equipped to successfully chart a course through these unknown waters.’
Currently, Rahul heads Mashreq’s Global Transaction Services, products and Trade; he has primary accountability for developing the Bank’s transaction banking business. Prior to the current role Rahul was responsible for the Mashreq’s transaction banking business outside the UAE, in 11 countries and Financial Institutions.
Prior to Mashreq, Rahul was with Standard Chartered Bank (SCB), since 2005; his last role was senior Transaction Banker in Strategic Client Coverage Group, Wholesale Banking; where he covered large corporate groups in India for this transaction banking requirements globally.
Prior to SCB, Rahul has worked with private banks in India in wholesale banking in variety of roles in coverage, sales and products, which included, Relationship Management, Asset Distribution, Trade Finance & Cash management.
Rahul graduated from Mumbai University, India [B.Sc (Physics)], completed MBA from Sydenham Institute of Management Studies (Mumbai University).