Big Bank Transformation: What Keeps You Up at Night?

very good morning ladies and gentlemen um thank you for the introduction but just as a reminder my name is Melanie narona I'm a principal at Economist impact the policy and insights division of the economist group and I'm pleased to be moderating this session uh with our distinguished panelists to get a glimpse into what keeps you up at night so we've got 18 minutes in counting so I want to jump right into it uh most of all I'll start with you um now modernization is such a big theme in banking can you tell us how you're approaching this really holistic transformation really what are the trade-offs there yeah first of all good morning and it's pleasure to be back here in Abu Dhabi um maybe just some context about sa Street we are unique Banks like different from the other bank you know we are globally systemic imported Bank we are the smallest globally systemic imported bank but we have a very narrow business model we do only inves in Investment Management we manage 4.5 trillion of assets and we do asset servicing where we save keep 45 trillion of assets our client are exclusively institutional investors we provide them with investment solution Operational Support banking services and technology and software why it's important to your question that educate a bit how we look at transformation we've been in business for 235 years so we've been through a lot of phases of transformation but the way we look at it is three folds number one is how we transform our operating model our client expect us to innovate on their behalf so in that respect how we expand our Solutions technology services and geography to be able to support them as they grow the second element is how we transform our operating modern technology as the backbone supporting our business strategy and last but not least how we transform the way we work and our culture and in that respect speaking about Talent culture Innovation agile it's a Paramount now for transformation to your question about tradeoff I would just summarize in a few points one is striking the right balance between Legacy and new bank has been sitting on Legacy platform for a while it's not a bad thing because it's working it's safe it's scalable it's proven the tping point to move and leave frog to new technology attract new risk and new challenges we need to understand the second trade-off what I call responsible Innovation as we enter the jni and new technologies as a bank we are the more predent part I always say we are not Google so we'll be less the first mover but we need again to adopt with acceleration this new technology in a responsible manner because we are sitting on 200 year of of trust relationship and last is how we allocate resources for all the above so that how we are how we look at transformation and challenges fantastic thank you for setting the scene there and I think the idea of responsible Innovation is so important uh now I want to delve into AI we I think we can't you know have a conversation today without talking about AI um and so I want to a little deeper into that part of the transformation now Advanced Technologies especially AI are seem to be very effective for um data management for fraud detection and prevention for U managing Regulatory Compliance but it's also significant investment how do you balance these first of all good morning everyone and thank you so much man for having me today um I think it's important that uh we we understand how the world is changing and the world has changed quite fast and um every in every decade there is always a keyword which as you said we cannot have a discussion without talking about it and in today's world I think AI is the word I was actually corrected in one of my recent trips it's now gen AI right so AI is even becoming slightly more outdated but um I think it all goes back to how you serve your client better right we particularly in the financial service industry we should not forget that everything at the end falls to the client how how do we become more approachable to the client and geni helps us um first of all to better understand what the client needs and accordingly we build our capabilities around how we are always almost two steps ahead of how we tell or inform the client or advise the client what is best in terms of the next steps so you asked the question how do we invest in gen I think it's important that most of our investment now we have built a strong platform from a digital transformation perspective we have the power of data and gen AI sits on top of it so you already have a lot of Basics fundamentals to build on how you can take it Forward we've in ADB recently announced what we call Vision 2035 and it's quite uncommon that the bank puts a vision 10 years out but we decided as a management team our vision for 2035 will be to ensure that ad deep moves towards a bank which is powered by geni by adep Ventures and Partnerships to ensure show that we always two steps ahead of the market and serve our clients better fantastic you said a really important term about Ventures and Partnerships um we heard earlier in a panel that before used to have only a limited number of Partners but today the pathway to Innovation is really driven by Partnerships with technology firms with fintech firms um and that's really my question to you Mustafa which is really about sure you have to work with a a host of Partners now but that also exposes you to data security risks right how are you navigating those first I would say we love partnership and we we love Innovation and we love fex I think there are a lot in the room I think we need to have this humidity is we we are not always the smartest people in the room and we cannot always build that Innovation so creating an ecosystem which is safe Innovative ready for Innovation and partnering with the right people to bring that to our client is important strategy for us the way we look at it historically is we build the backbone what we call our Alpha platform which is front to back State straight owned uh systems and platforms and the idea is sourcing the best Technologies and partner to come and complement this offering and accelerate the I would say Market time to Market to bring Innovation to clients to your point about risk yes it doesn't come without risk and without challenges and there is a higher uh scrutiny from Regulators by the way to this third party risk so and impacting all banks so number one is how you create this Model Management risk allow us to host those third party to oversee due diligence look through understanding what they do how they do it how they run their data privacy how they run their their cyber security how they're running change management their resiliency it's becoming more and more an element of selection in all Partners or providers you may use second is we are accountable for our client data as a bank so if we use other partners we are accountable for this data too so how we build these bridges in which we protect the data for our client while we have other players in the ecosystem and third again is alignment of management in a way when we work with organizations smaller or bigger how we bring experience helping them step up to the right level of security and knowledge we need them to be and last but not least as the regulation is getting more I would say stent and the world is getting more complex lot of threads having fewer deeper relationships is the is the answer to the question fewer deeper selecting few Partners in space and invest in that partnership long term address some of the challenges I just mentioned earlier fantastic I think there's a lot of lessons there for institutions like yours so thank you for sharing that in those insights um I I want to Circle back to something you said earlier about keeping the client at the center customer management is such a big facet of course of what you do um and again in an earlier panel there was a big discussion about hyper personalization which customers now expect right um but at the same time uh there's again that consideration of data privacy and security uh how are you balancing that very good and um I think um it's a very important part because um it goes hand in hand you cannot have one of the two you have to ensure that when you are building a customized personalized experience it can only happen if you have access to data but then there is a responsibility of how you ensure that the data is protected because success brings success once the client has the confidence that his data is protected and he gets the service more and more will be buying into it and if you do my man I just want to touch on one of the points Mustafa mentioned is that the the important part is that how you succeed in this world is that you almost have to imagine the picture or how the picture will look like in the next few years and the picture can then be split into a puzzle I would say call it a puzzle and everybody is actually a piece in that puzzle so banks are a piece in that puzzle fex are a piece the regulator the client the data privacy if any of these pieces do not add up to the bigger picture it will not work absolutely and I think that's where it's important that you need to know where is your part in that bigger picture and how you bring others together to because one piece missing the photo will not be complete or the picture will not be complete basically right right but how are you again how how is your bank thinking about hyper personalization very good so we are using um uh because we have the advantage of data uh and we've done a lot of work in the past few years to build the infrastructure and fundamentals behind it now we are uh laying it over with the power of creating or mind in the data to ensure that we create now what we call a behavioral theme for our clients and start to uh promote what is possible for the client so for for example our mobile apps when you look at it um when you open the app what I will see is not what you will see or will see and that's all gen AI right so it is why what is important for you I learned enough about your behaviors and what your needs are and I be able to push that even further yeah absolutely and I think putting in God rails around how it's you how that data is used for marketing how that data is used in other facets for other Solutions I think is really important um I just want to follow on as well just sorry did you have I just maybe one point to what Muhammad said about data it's important to parallel by the way what I think we need now to recognize the only part that doesn't change now is data so application technology change what's stay consistent is the data and the work the investment all of us made around I would say analyzing this data storing the data controlling the data having a governance around it will be used for years to come it's interesting because that's maybe the long-term investment we will all keep the application the functionalities technology will offer will come and consume this information so it's almost counterintuitive because people want to get to the end state right away in reality this Foundation Building is critical not only for the next few years but for likely the 10 15 years to come because having this data organized in a way allow you to use it forever wherever the new technologies offer as a capability and functionality in the future yeah absolutely absolutely uh I want to Pivot just to a final point on competition I'm sure that keeps both of you up at night um and Muhammad I'll come to to you first with a question about how are you tackling competition from Neo Banks particularly as so many because they are digital natives they are potentially ahead of the curve in terms of providing datadriven solutions to customers how are you tackling that I think um uh this was a very debatable questions for many years of how you look at neobanks and and my personal view is that first of all you have to accept the reality that they exist right so they are there and they have a very strong Niche uh and a value proposition which traditional Banks cannot almost compete with so the solution for that is for us to understand understand where is our competitive Advantage how do we actually learn from Neo Banks and how we transform ourselves into to be able to create the bank of the future what we call it whereby we still have almost The Best of Both Worlds because we have an opportunity to become closer to the value proposition of Neo Banks but the opposite is not true Neo Banks cannot come back and play in the space which is still actually unoccupied and that's why we are embracing the would call it almost disruption to the market we are positioning us accordingly and we are using it as an opportunity not as a risk I'm very curious what is that space you define as the space that Neo Banks can't play in so I think Neo Banks because the regulatory framework the the protection the infrastructure even the basics of physical presence because we have to acknowledge the fact as we transform more and more into a Digital Universe there is still an element requirement as we move Generations into physical presence that is not available for NE Banks and then last but not least the brand because at the end of the day you you're dealing with human beings and human beings have a psychological element where they need to relate to an entity and that is not existing in neob Banks we have that Advantage we have Adib as a big brand for example and we're building on that value proposition that's very interesting I've heard that uh with other with other sort of established Banks as well that yes I think convenience is great especially for younger generation but there is a human element there's a trust element uh that maybe big banks have the the edge in so uh interesting on that front but Musta your your thoughts on competition as well how are you how are you tackling competition yeah so we run a global business um interestingly for us competition is other Banks software providers third party administrators and that changed dramatically in the last 10 15 years we compete more and more in software pure we compete in service we compete in investment in Insight in data which which create a good tension about us continuing innovating two point I think to what Muhammad said said and I share completely one is the trust element the brand and the brand is about trust so people will always trust a Legacy Bank who can innovate because they have a relationship they've been there before they know it's secure they know it's highly regulated but you need to earn that right from a trust perspective but as well not to be complant about it from an innovation perspective the other part which is very interesting when you look at uh how what is the asset is the client relationships our business is becoming more and more platform business the successful players in the future is owning the client relationship because if you are the platform owner you are the one integrating you are not a part of someone else platform you own the platform so again look at at competition as a a challenging healthy challenge about Innovation not being compant about your position being build through out trust but maybe looking at competition sometime as partnership coming back to what we spoke about earlier and integrating those solution into the offering to and client put you always in a relevant space to end clients fantastic we've just got a minute on the clock um and I just want both of you to look into your crystal ball look at look up to the year ahead uh and maybe just tell me the top issue um you know the issue that's top of mind for you going into 2020 2 um whoever wants to go first sure so maybe I can go first yeah so I think um um 2025 uh will be a very interesting year because we're coming from very strong momentum and I I'm cautiously optimistic that this momentum will hold um uh obviously some of the external environment changes or uncertainty will have to be looked at but uh the important thing is that uh change has become uh ba for us and you just have to be agile enough to deal with these changes as and when they happen fantastic change is business as usual mustfa I would say crossing the line in acceleration I think we need the AI is creating huge opportuni gen huge opportunity how as Banks we can move in a faster Pace but in a responsible manner so creating that engine of speed which allow us to transform our business in the future and that balance between responsible and Innovation would be likely the key key challenge we have to address for 202 that's a great thought as well I think we were in that experimental experimenting phase and now we want to accelerate so wonderful thoughts ladies and gentlemen you've gotten a glimpse into what's keeping these Executives up at night how you get any sleep is beyond me uh but thank you so much for your insights ladies and Gentlemen please thank me in uh thank our panelists for joining us here today thank you so much thank you oh