To cater to a young population that prefers to bank online, the lender, like others in the Middle East, is pivoting to a digital banking
As Mashreqbank, one of the oldest banks in Dubai, United Arab Emirates (UAE), fends off competition from non-traditional financial services start-ups, the bank prepares for a digital only future.
Down from 34 branches two years ago, the Dubai-based bank now operates just 10 branches in the UAE. That’s set to fall further, with Ahmed Abdelaal, the Chief Executive Officer predicting traditional branches will “cease to exist very soon”.
“There’s a complete shift in our strategy to focus on digital channels”, which now account for the majority of new business at the lender, Abdelaal said in an interview. “We still have some clients who rely on brick and mortar but our numbers show these are diminishing by the minute”.
The bank traces its origins back to 1967, four years before the UAE was founded as an independent country. To cater to a young population that prefers to bank online, the lender, like others in the Middle East, is pivoting to a digital banking.
Digital is the way forward
While lenders including Emirates NBD have set up digital offshoots, independent entities are also entering the market. The founder of Dubai-based Emaar Properties PJSC has set up a platform called Zand, while Abu Dhabi sovereign fund ADQ last year announced plans for a $545 million digital bank. Meanwhile, local payment apps have attracted funding and companies like Stripe Inc. have entered the market.
Abdelaal said Mashreq isn’t competing with traditional banks anymore. “Our real competitors are the providers of client experience, the owners of data, and the owners of information”, he said.