UAE National Day: In banking relationships matter even with digital, says Habib Bank AG Zurich's Arif Lakhani
UAE consumers, businesses waste no time adapting to change in banking - digital is up next
Dubai: A UAE success story would go somewhat like this – set up a business, work at making it known, and hit the entrepreneurial jackpot. But the UAE also has plenty of room for another sort of success story – work the corporate ladder and get to the top.
The second option is what Arif Lakhani chose, starting as a manager at Habib Bank AG Zurich’s Dubai operations in 1974 and then becoming the CEO in 2008. He stepped down as CEO in 2015, at which point he took on the role of Associate Director.
“Habib Bank AG Zurich was a small bank compared to its multinational rivals,” said Lakhani. “And it was only because of the graciousness of the late Ruler of Dubai, Sheikh Rashid Bin Saeed Al Maktoum, who granted us a license in one day stating that “Dubai needs people like you” that allowed us to commence operations.
“The city’s ambitions were always gigantic and allowed us to grow with it, primarily as a trade finance bank and then later on shift towards more asset-backed services after the property freehold legislation in 2002.”
Branch strength
Those were the days when the number of branches operated by a bank was a matter of pride by itself. It was, or so it seemed, taking banking services all the way down to individual neighbourhoods.
“Historically, it was always the branch indicator that indicated the strength and depth of a bank’s operations (foreign banks were limited to eight branches in the country),” said Lakhani. “Despite that, trade and banking operations flourished with the government’s pro-business stance since inception.
“This has continued throughout my journey in the UAE with recent reforms including the granting of golden visas to expatriates such as myself.”
But gone too is the emphasis on banks and them having an optimum number of branches. The movement to all things online has ensured that – these are the times of ‘open banking’ and ‘green deposits’ after all. Right through the decades what has been remarkable is how fast the UAE’s residents have taken to each advance that the banking industry periodically throws up.
Quick on the uptake
Compared to many countries in the wider Middle East and North Africa, banking’s reach in the UAE is quite pronounced. Even those within the blue-collar workforce have been brought under banking’s ambit in some form or the other. Banking and remittance linked fintechs have eased the process further.
The UAE’s positioning as a global trade and business hub had much to do with the extensive banking coverage, and from there to getting individuals sign up was just a small step. And it continued to grow even when the wider Middle East tried to intervene with periodic bursts of uncertainty.
“Despite the numerous challenges that included the first Gulf War and the Iran-Iraq war, UAE banking strengthened and is very healthy on its fundamentals, especially as it has become a global hub,” Lakhani said. “I have been blessed to be part of this growth - having been here since 1974, I can only say that the best days are still ahead of it.”
I moved to Dubai in 1974 when the city was really just a small town and soon after the country’s independence. That was the time that the UAE dirham became the official tender currency of the country (the Indian rupee was used until then)
Such a long journey
Lakhani’s arrival in the UAE in the summer of 1974 spans quite a bit of Subcontinental history. He was born in Bhavnagar in Gujarat in 1945 and the family migrated to Pakistan following the Partition. “I studied in Karachi at the government commerce college and started my banking career in 1966, before moving to Dubai in 1974,” he said. “It has been an absolute privilege to contribute to the UAe and Dubai story.
“As for banking itself, today, with the rapidly evolving landscape of tech, digital banking is now the next frontier and brick-and-mortar branches do not have the relevance that they once did. However, I do think brick-and-mortar will always have some say in banking, especially as relationships are to be built.”
As this banker will tell you, relationships are what the UAE’s banking will continue to be built on - even when digital banking goes mainstream.