LOOKING TO THE FUTURE
TBY talks to Peter England, CEO of RAKBANK, on helping clients understand the implications of financial decisions, makingprogress on personal financial management, and the uses of fintech in emerging markets.
BIOGRAPHY
Peter England was appointed as RAKBANK’s CEO in 2013. In the last few years, he has implemented a strategy to diversify the bank’s balance sheet and income base that included rebuilding wholesale banking, developing the business banking unit, and enhancing the personal banking product suite. This has broadened its fee income base in treasury, foreign exchange, insurance, and proprietary asset management. He also played a vital role in acquiring a major stake in RAK Insurance and in 2015 was elected as a member of the Board of RAK Insurance. With over 35 years of banking experience in Australia and Asia, he previously spent seven years as the Head of Retail Banking at CIMB Bank Berhad.How is SME lending being encouraged in the UAE?
There is a lot of talk about SME lending here at the moment. We ourselves have seen some results through the Mohammed bin Rashid Innovation Fund. We have dispersed one loan through the fund already and are working to increase our cooperation. There is also talk about some kind of SME guarantee scheme being developed. From my experience, these things can work; however, ultimately the most powerful partnership is where the client and bank work directly together on a risk participation basis: the client with their equity, the bank with its funding, and the ensuing interest. That is the most effective model going forward. The risk of any guarantee scheme is that people may not be as committed, since they feel that someone else is going to step in if something goes wrong. The best model is where both the business owner and the bank are committed to the relationship.
How do you qualify the level of financial education in the UAE?
Historically, this has been an area of weakness. The banks have overstretched borrowers and have not focused on consumer education. In the last three years, there has been a major push by the regulator to get more serious about proper financial education, disclosure, and helping clients understand the implications of the financial decisions they make. There has been an improvement there, but there is still room for growth. The Central Bank has done a tremendous job in terms of setting clear regulatory caps on consumer finance, loan-to-value ratios, and property settlement. In the next couple of years, there will be more progress on personal financial management, whether through digital offerings or some fintech scenarios being developed. People can now access independent reviews before making their own decisions as to which provider to choose. This means that banks have to be competitive, transparent, and disclose the right thing.
How are banks in the UAE adopting fintech in order to stay ahead of the curve?
Fintech is the buzzword at the moment, but financial technology has been around since the inception of the ATM. I am seeing more hype than reality in the UAE at this stage. At RAKBANK, we started to use blockchain technology through a company called Ripple to do our transfers and payments to India. For this, we have a strategic partnership with Axis Bank in India. We have an instant money transfer platform called Rakmoney Transfer, and we are planning to have more direct host-to-host links with banks in the Philippines, Pakistan, and Nepal. The problem is that the banks on the other side need to invest in having the same technology that we use, which takes time. Historically, this is an area where banks have not been interested. These particular clients typically earn a low salary and send a high percentage of their income back to their home country. We came up with a cost-effective solution for them that is largely digital.
To what extent is there going to be a level of consolidation in the UAE's banking sector?
There are too many banks in the UAE. On top of that, the so-called bankable population is 3-4 million people maximum. To have 50 banks serving that population is just not logical. It is just a case of whether at the end of the day the individual shareholders of these organizations feel it is in their interest to consolidate or not.
What will be the economic driver for Ras Al Khaimah in 2018?
Tourism and real estate will play the most important roles.
LOOKING TO THE FUTURE
TABLE OF CONTENTS
Interview
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TBY talks to Andrea Di Gregorio, Director of Energy Efficiency and Renewables of the RAK Municipality Department, on the Emirate's overall strategy, specific programs, and early supporters of energy efficiency and renewables.
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Abdulrhman Al Shayeb Al Naqbi, Director General, Ras Al Khaimah Department of Economic Development (RAK DED)
TBY talks to Abdulrhman Al Shayeb Al Naqbi, Director General of the Ras Al Khaimah Department of Economic Development (RAK DED), on improving the ease of doing business, key diversification pillars, and the impact of new VAT.
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Sheikh Ahmed bin Saqr Al Qasimi, Chairman, Ras Al Khaimah Economic Zone (RAKEZ)
TBY talks to Sheikh Ahmed bin Saqr Al Qasimi, Chairman of the Ras Al Khaimah Economic Zone (RAKEZ), on offering investors a global platform, creating a one-stop shop, and the strategic comparative advantages of access to the Indian Ocean.
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Manu Mehra, CFO, RAK Investment & Development Office (RAK IDO)
TBY talks to Manu Mehra, CFO of the RAK Investment & Development Office (RAK IDO), on the role of free zones in diversification, the benefits of smart state intervention, and the keys most needed for a strong manufacturing sector.
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Yousef Esmaeel, Chairman, Supreme Committee of Saud Bin Saqr Establishment for Youth Enterprises Development (RAK SME)
TBY talks to Yousef Esmaeel, Chairman of the Supreme Committee of Saud Bin Saqr Establishment for Youth Enterprises Development (RAK SME), on incentivizing young people, working with local government to encourage entrepreneurialism, and the role of SMEs in the UAE marketplace.
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Abdullah Al Abdooli, Managing Director, Al Marjan Island
TBY talks to Abdullah Al Abdooli, Managing Director of Al Marjan Island, on the continuous growth of the real estate market in RAK, its robust investment landscape, and the Emirate's ambitious plans to develop its tourism sector.
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Hassan Hamdan Al Alkim, President , American University of Ras Al Khaimah (AURAK)
TBY talks to Hassan Hamdan Al Alkim, President of the American University of Ras Al Khaimah (AURAK), on the consequences of growing global demand for education and AURAK's efforts to attract students from beyond the Emirate.
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Gurumadhva Rao, Vice Chancellor, RAK Medical & Health Sciences University (RAKMHSU)
TBY talks to S. Gurumadhva Rao, Vice Chancellor of the RAK Medical & Health Sciences University (RAKMHSU), on the further development of higher education, its key differentiators, and the need for qualified doctors.
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Taner Topcu, Director, Ras Al Khaimah Economic Zone’s (RAKEZ) Academic Zone
Taner Topcu holds a bachelor's degree in Public Administration from Anadolu University in Turkey. He is an industry expert with more than 20 years of successful experience in education, hospitality, business development, and customer relations. Prior to joining RAKEZ in 2015, Taner worked at TECOM Investment's Education Cluster in Dubai Knowledge Village and Dubai International Academic City, where he worked in operations, business development, and account management. He also worked at Aabar Investments in Abu Dhabi as a Business Development Manager and at Dubai's Knowledge and Human Development Authority as a Director of Engagement Operations.
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