UAE bank set for fresh frontiers

Faster actions and responses will be part of the future of enhanced cash management in the UAE, and Abu Dhabi Commercial Bank

will be in the forefront when it comes to introducing new capabilities, as it makes clear in this exclusive Q&A interview

Question Please provide an overall perspective on ADCB’s cash management products and solutions – and future offering?

Answer ADCB is a full service bank providing wholesale and retail banking and treasury services to clients in the UAE and GCC. Our cash management product suite caters to our wholesale banking clients’ needs in domestic and international payments, collections, notional and physical liquidity management and consolidated corporate treasury account management.

The following capabilities in this regard will complete the overall theme of ADCB’s market leadership in cash management:

• ADCB is a bank of choice for international and regional banks for AED clearing, and offers value-added services that are not available elsewhere
• with a state-of-the-art client platform enabling single sign on for cash and trade, and interface capabilities to all ERPs used by clients, ADCB provides clients with a very flexible choice of delivery of instructions, payments and other services
• host-to-host integration of client payments and collections is a focus for ADCB, especially with large corporate, government and public sector clients, many of whom use ADCB as their main cash management bank
• with its strategic relationships with BofAML, Banco Santander, Kookmin and others, ADCB is able to offer clients a seamless global cash management solution as well as deliver a UAE/GCC solution in global and regional cash management mandates.

Investment in product, platform and people is a must to stay in the reckoning in cash management (and transaction banking overall), and the threshold for entry into the business keeps getting raised with every passing year as more banks find this an attractive service to offer their clients. ADCB has been investing consistently in the 3Ps of the business for several years and there is more to come. It expects to bring global best practice to its clients consistently.

Question What trends are emerging from the UAE corporate treasury. For example, outsourcing, centralisation, payment factories, etc and how do you see ADCB meeting these trends and challenges?

Answer There has been a consistency of strategy in the UAE/GCC on the part of corporates in managing their treasury. Several broad trends in the UAE can be mentioned:

• bank consolidation amongst corporates, and a treasury account consolidation with government and the public sector
• automation of bank interfaces and demand for bespoke service as a differentiator
• payments and billing outsourcing, mainly amongst MNCs
• reciprocal supplier and provider relationships between banks and leading industry providers – eg, insurance, hospitality, healthcare
• cashless transacting, especially for taxes, tolls, duties, especially with government and the public sector. This, of course, has been the case for several years and products such as e-dirham are now industry standard for payments to government as well as with the issuance of labour guarantees
• the emergence of corporate payroll and T&E cards amongst corporates, and a growing interest in eBAM.
• there has also been a strategy for many years to standardise treasury architecture within government and the public sector and the beginnings of a shared service centre strategy
• finally, there has been considerable infrastructure evolution driven by the Central Bank of the UAE, the IBAN and direct debits are now reality.

On top of this, discussion has been taking place about the possibility of clearing services in USD and EUR.

ADCB is closely involved with each of these strategic areas and has invested in product capability as well as service infrastructure. Challenges are several, not least with the adoption life-cycles of new products and services amongst corporate treasuries, and the information overload that exists by way of consultancy inputs and market development feeds that are commonly available.

Question What are the changes in regulations and technologies on treasuries? And how does ADCB help corporates meet these challenges?

Answer As described earlier, the Central Bank of the UAE has been instrumental in providing leading infrastructure capabilities on par with those in developed markets. That has led to several new opportunities, such as direct debits for billing and card payment services, significant streamlining of value transfer in the UAE allowing for considerable variety and speed in executing payments, and, of course, parity with global standards.

Regulations from the US and other significant treasury jurisdictions have played a major role in banks reviewing their offering. Dodd Frank, FATCA and a strengthening of sanctions would come to mind as recent landscape changers.

The most significant technology development has been the increased need for security and authentication to avoid exposure to threats that are growing in sophistication. ADCB has invested considerably over several years and will continue to do so, in ensuring that the standard of encryption and authentication are the strongest in the industry and proactively managed.

Question Would you elaborate on the increase of the government’s requirements for their payments, reconciliation and are they employing technologies to support these requirements? What are the solutions from ADCB for this?

Answer Indeed, and this is a consistent strategy adopted by government and the public sector for many years now, especially in Abu Dhabi and Dubai. Building blocks relate to the various trends referred to above. Government and the public sector in the UAE have led change at an impressive pace and raised the level at which the industry delivers its solutions overall.

Workstation and ERP technology policy and deployment has been refined and standardised over time and interfaces to banks now take place at standards that are world class. With global presence increasing, the usage of standard platforms and technologies has become very important and consolidation of treasury management is a priority.

ADCB has been a thought leader in this space for several years with its unique position as a UAE bank with local and global cash management capabilities and strategic relationships with global banks.

Question Where do you see the future of the cash management business in the UAE? Where is growth going to come from? Are there any new ADCB products or markets to exploit?

Answer It will be one of technology deployment to speed up value transfer, improve information availability, and execute actions with much shorter lead times. The effect this will have is, of course, to lead the way to better working capital management.

ADCB has been bringing new capabilities and thoughts to the market consistently and will continue to do so for the benefit of our clients, strategic relationships and correspondents.