Rohit Garg, Executive Vice-President and Head of NeoBiz, Mashreq Bank, speaks to GN Focus about the various measures the bank has taken to help SMEs during the outbreak of Covid-19.
What is the outlook for SMEs and what should they expect from their bank amid Covid-19?
During times of crisis, SMEs are often one of the hardest-hit segments owing to their smaller workforce and lean operations, which increases their vulnerability to systemic shocks. The massive upheaval to the economy caused by Covid-19 has no doubt negatively impacted SMEs, disrupting business continuity and causing financial instability.
Fortunately, some of the impact was cushioned by the support measures offered in the UAE, including stimulus packages from the UAE Central Bank and relief measures from financial institutions including Mashreq. While the overall outlook remains uncertain, we see positive signs as the world reopens and business activity begins to improve.
A trend that has accelerated significantly in the banking landscape for SMEs has been through financial innovation and growth in fintechs. The industry has recently witnessed several neo-digital banks being launched worldwide, which now provide businesses with access to digital solutions that are simple to use and competitively priced.
We are pleased to say that Mashreq was the first bank in the region to launch a digital banking proposition for SMEs, NEOBiz. Now operational for a year, it continues to receive extremely positive feedback from our clients.
In the current situation, customers expect support from their bank. In addition, they expect a full-scale digital service with a reduction in fees and charges, and access to value-added products and services. NEOBiz checks all these boxes - perhaps that’s the reason that it is winning the trust of so many customers.
What measures has Mashreq taken to help businesses during this time?
Mashreq adopted a range of different measures to help businesses. Our objectives were two-fold: to provide our customers with financial relief and flexibility, and to ensure they are able to go through the lockdown period with minimum financial stress.
A sizeable number of our business banking loan customers received help in the form of payment holidays with no extra fees and charges, while those holding a basic account benefited from a reduction of the minimum balance requirement and a removal of the levy for the fall-below fee. Our relationship managers reached out to business banking working capital customers and those directly affected by Covid-19 to work on individual solutions. We also extended support to our NEOBiz customers by waiving the monthly fee for account holders.
We have continued to deliver the same level of service and convenience they have come to expect from us, ensuring that our customers are able to access the banking information they need anytime and anywhere.
What are the main opportunities for digital-only banks?
Digital banks offer seamless, convenient, secure and cost-effective banking services, especially when compared to traditional branch banking. Unlike traditional banks, the ability to collect customer data is often integrated into the operations and processes of digital banks right from the beginning. This data is used to engage with the customer post acquisition and also help them as they transact thereby making the customer experience seamless and personalised.
This data offers unique insights into customers’ behaviour and empowers digital banks to provide them with valuable and relevant offers in real time. For example, digital banks can offer customers personalised products and services based on their behaviour, or suggesting options used by customers in a similar line of business.
At Mashreq, we have successfully leveraged AI technology and big data to offer customers a level of personalisation that provided a seamless customer experience, while achieving new levels of operational efficiency for the bank.
The other big opportunity for digital only banks is the ability to build upon the community of users. In a connected world, cooperation and partnerships are key as they foster a symbiotic ecosystem. This is of immense value to young businesses and SMEs.
Mashreq NEOBiz builds upon external partnerships, which are relevant and brings them as optional value-adds for our customers in an efficient manner with cost and time savings.
What are the key pain points that NEOBiz has solved over the last year?
Prior to the launch of NEOBiz, startups and SMEs reported difficultly in opening a bank account in the UAE and accessing financial services. Despite making up the majority of businesses across the country, most SME owners, as well as startup founders, will tell you that the process can be immensely challenging and time-consuming.
In some cases, they avoid opening a local bank account and conduct their transactions via non-UAE based foreign banks that subject them to high international fees. NEOBiz has been able to address this with a 20-minute digital account opening application, email-based queries and tablet fulfilment. This is a drastic simplification of a process that previously took up to three months in extreme cases.
Being a digital-only proposition, NEOBiz is also a lot more economical and gives the customer choices with complete transparency and flat fees. It offers 24X 7 access through online and mobile banking in addition to call centres, interactive teller machines and even a virtual relationship manager.
The best part about this offering is that it brings third-party products such as accounting software, mobile point of sale and payment gateways as optional add-ons, at special preferential prices for our customers. For the SMEs, it acts as a one-stop shop and again delivers superior value proposition.
In addition, through the adoption of technology such as blockchain, artificial intelligence, data analytics and machine learning, Mashreq has been able to streamline lengthy documentation practices and cumbersome paper-based KYC procedures, ensuring a faster, reliable and more secure onboarding and digital data exchange process.
Our long-term vision for NEOBiz is that it enables customers to focus on and expand their business. We have major enhancements in the pipeline to expand these services to achieve our ambitions.