Rakbank Group CEO Raheel Ahmed talks about his bank’s focus on service diversification and open banking.
Global Finance: What do you expect from 2024 in the UAE market?
Rahil Ahmed: At the end of last year, we had doubts about whether the UAE economy would continue to grow post-Covid, especially given regional tensions and fluctuations in US interest rates. But what’s nice is that the UAE’s growth has continued. There are several reasons for this. Firstly, since Covid they have done a brilliant job making it easier to do business and live there. This has made the UAE an attractive place to live and work, attracting people like a magnet. It is also considered a refuge for those affected by conflicts in nearby areas. Secondly, the tourism industry is booming, with record numbers of visitors expected in 2023. Finally, management’s smart financial strategies are paying off by reducing dependence on oil revenues while benefiting from high oil prices. All these factors together suggest that the UAE’s growth will continue in the short and long term.
GF: What sectors are you focusing on?
Ahmed: We are a mid-sized bank offering a variety of investment services, from microfinance to corporate banking. Our priority sectors include education, from early childhood to university level. We also give priority to the hotel business and support small and medium-sized businesses. [small and midsize enterprises] with special emphasis on empowering women entrepreneurs, participation in government projects and specialization in trade and manufacturing. Microfinance is important to us as it allows us to expand financial inclusion for the 4.5 million workers in the UAE. Thanks to our partnership with the French payment system Edenred, we ensure smooth processing of payments, money transfers and microcredit.
GF: Artificial intelligence [AI] Is it already a reality for you?
Ahmed: Machine learning and artificial intelligence were part of our toolkit. We use these technologies for a variety of purposes, such as propensity modeling, fraud detection, and identifying transaction patterns. In addition, we have taken the proactive step of establishing a Generative AI Lab, positioning ourselves as pioneers in this field. We prioritize solving easily achievable goals, using artificial intelligence to improve technology development processes, complementing our coding and testing capabilities, and improving our internal policies.
GF: How is the emergence of open banking in the GCC changing your work?
Ahmed: Open banking is close to launch in the UAE, with advanced stages of development expected to culminate over the next 12 to 18 months. We work closely with the central bank during the consultation phases, followed by implementation, which may take a year or two. Achieving scale is critical for these technologies, and I believe the UAE will serve as an excellent hub for wider adoption in the GCC and Indian subcontinent. With a customer-centric approach, open banking has promising use cases. As we travel around the UAE, we strive to be ready to use and offer our APIs. Above all, prioritizing data security, privacy and trust are paramount in open finance. It is critical to ensure that organizations with access to customer data adhere to the same high cybersecurity standards expected of a bank.
GF: How does your bank engage in climate finance?
Ahmed: Our approach spans multiple levels and is based on the belief that social impact affects everyone. Instead of simply making big statements, we prioritize action that starts from within. Our initial focus is on deep implementation of environmental, social and governance [ESG] goals within our corporate culture. This includes measurable reductions in water, energy and paper consumption, with the goal of making these initiatives meaningful to every employee.
Moving forward, we are expanding our efforts for our clients by offering green mortgages and green auto loans, as well as partnering with larger corporate clients in their transition to sustainable practices. This represents our second level of interaction. At the highest level, we are committed to important climate finance initiatives, as exemplified by our participation in the UN COP28 summit. UAE banks pledge to allocate Dh1 trillion [$270 billion] by 2030, and our contribution will be 8 billion dirhams [$2.1 billion]. However, our main goal remains to make these commitments tangible and effective for everyone involved in them every day.
For us, ESG includes not only environmental issues, but also social responsibility. To this end, we have developed the region’s first social finance system and intend to issue social finance bonds. This initiative is especially important as we are the largest provider of financing for micro-SMEs and new start-ups in the country.