by Murali Subramanian, Executive Vice President, Head of Transaction Banking Group, Abu Dhabi Commercial Bank
Transaction Banking is the largest segment in Abu Dhabi Commercial Bank’s (ADCB) Wholesale Banking group, covering cash management, trade finance and client services. Murali Subramanian, Head of Transaction Banking, and his team, support nearly 40,000 corporate customers, which amounts to one third of the UAE economy. ADCB offers these customers both comprehensive bank account services and a range of value-added offerings according to their specific needs, such as electronic payments, automated receivables processing and reconciliation, direct debits etc. as well as a comprehensive trade finance offering. In this article, Murali Subramanian describes some of the investments and innovations that have taken place in recent years, and the impact on ADCB’s customer base.
Supporting UAE as a financial centre
ADCB’s strength in transaction banking may come as a surprise to some organisations that see ADCB predominantly as a lending bank. However, over the past few years, we have invested heavily in our solutions and services to become a leading provider of cash management and increasingly trade finance solutions too across all ADCB’s customer segments, including corporations, financial institutions, non-bank financial institutions and public sector organisations through to small and medium-sized enterprises (SMEs). Although UAE is not a large area geographically or in population terms, it is a crucial financial centre for the region as a whole, leading to a concentration of corporate entities that require sophisticated cash management and trade finance solutions to support their business both regionally and globally.
An integrated approach
As a result of its pivotal financial role in the region, a number of global banks have established a business presence in UAE, with a particular emphasis on foreign multinationals doing business in the region. At ADCB, however, we pride ourselves on our ability to support both domestic and foreign institutions of all sizes and industries, whether state-owned, privately owned or publicly listed. In addition to our unrivalled depth of understanding and engagement in the business, regulatory and cultural environment in the region, we offer integrated solutions that enable our customers to achieve complete, accurate and timely visibility over information, whether for cash balances, liquidity and risk positions or the status of financial transactions and processes. For state-owned entities, this requirement is often more challenging given that in some cases, cash may be comingled across entities whereas in others, it may need to be kept separate.
Automation and control
As financial sophistication increases across the region, the demand for automated processes to support greater efficiency and control is increasing, such as electronic signatures on transactions and remote cheque printing to reduce processing and transportation costs. This does not apply only to larger corporate and financial institutions, or government entities: a growing number of mid-cap companies and SMEs are also looking to move away from predominantly manual and spreadsheet-based processes to more structured, automated solutions that allow better visibility and control over balances and transactions.
Taking a global view
The demand for greater automation is becoming more compelling for customers’ business within UAE: they also aim to achieve comparable levels of efficiency, control and transparency globally. In addition to providing integrated services within UAE, our unique partnerships with Bank of America Merrill Lynch and Santander, as Padmanabha Mishra describes in detail in this Guide, enables us to support our customers’ local, regional and global requirements in a cohesive way.[[[PAGE]]]
Customer centricity in action
While payments and collections are often seen as commoditised transactions, our customers operate in highly competitive markets, leading to stringent and often very specific demands that require highly bespoke solutions and services. Technology innovation and service quality are key to achieving the efficiency, security, automation and visibility of transactions to which our customers strive, and we continue to invest heavily in these areas. One such investment has been the development of a $50m new technology platform in partnership with a highly respected, specialist technology vendor with a local presence. Initially, we migrated transaction processing (e.g., payments and collections) together with balance and transaction reporting onto the platform. This was followed by more sophisticated capabilities such as host-to-host connectivity, XML-based integration, automated reconciliation and liquidity management.
Developing our client services offering is equally important, and we continue to invest in an efficient services organisation that offers a single point of contact to each customer to make it easier to do business with ADCB irrespective of the scale and complexity of the activities that they conduct with us. Our technology platform has been instrumental in enabling us to achieve ever higher levels of service. By streamlining daily processes, we can spend more time on understanding customer needs and offering advisory services and value-added solutions.
Demonstrating results
The value of these investments is demonstrated in the growing number of success stories with our customers, such as Emirates National Oil Company (ENOC), whose case study can be found here. Over recent years, we have seen a growing number of our customers win prestigious global awards for projects they have undertaken with ADCB. For example, Tourism Development & Investment Company (TDIC) won the 2013 TMI Award of Innovation and Excellence in Technology for their payments automation and ERP integration project. This year, Abu Dhabi Health Services Company (SEHA) was highly commended in Treasury Today’s Adam Smith Middle East Regional Award for Best Practice.
Despite the successes that ADCB, and our customers, have achieved so far, our transformation journey is by no means complete. We continue to build our transaction banking business as a value-added function for our customers, either alongside our lending activities or as a separate offering. In particular, we are focused on helping our customers to navigate the changing regulatory and market environment and take advantage of new opportunities for efficiency, control and visibility over cash and trade.
For example, we offer a growing range of capabilities to support emerging requirements such as direct debits and sophisticated payroll solutions that meet the needs of infrastructure and oil and gas companies with a widely dispersed workforce. We work closely with customers to pilot new solutions that offer benefit to the wider corporate, government and financial institution community, such as efficient bank account opening and management (BAM), automated USD clearing across our customer base and mobile banking. We are constantly looking at new opportunities for innovation with our customers, such as crypto-currencies which we see as a valuable enabler in the future.
A central strategic role
We believe that ongoing initiatives in this area will continue to result in growing demand for our services and stronger relationships. As many organisations have multiple lenders, they have a choice of banks to appoint for ancillary services such as cash management and trade finance, and increasingly, we see a wide spectrum of organisations appointing ADCB for these services. Transaction banking is positioned at the heart of ADCB’s value proposition, and we are committed to close collaboration across the bank to offer integrated services to support strategic activities such as M&A and project finance. With a lean, efficient organisational structure, we can facilitate rapid decision-making and engage the right business functions and individuals to ensure that our customers receive the very best of solutions and services available in UAE.
