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Focus on integrated solutions and regional capabilities
Increased use of electronic cash management facilities to enhance cost and operational efficiency is the dominant theme in the transaction banking industry in the Middle East and Africa

February 04, 2016 | Mobasher Kazmi

The transaction banking business in the Middle East and Africa (MEA) region is being transformed by an increased focus by financial institutions to leverage the growing trade flows between West and East. They are looking to provide more value added services to their corporate and institutional clients as global banks de-risk their exposure to this market. A number of leading Gulf banks are taking advantage of this opportunity to provide more holistic services.

A key driver of growth has been the trade with China, which remains one of the main engines of growth in the global economy and is fuelling development in many of the world’s trade corridors. “Over the past 10 years, we have witnessed material shift in trade corridors with GCC countries increasingly relying on Asian partners as compared to West. For example, China has emerged as the largest trading partner for KSA (overtaking USA). Not only China, other Asian countries such as India, Korea, Japan, etc, have also made it to the list of top 10 trading partners for KSA. This together with growing intra-regional trade are making Gulf banks focus on enhancing their capabilities to capture the growing level of trade flows between GCC and the East,” commented Arup Roy, head of global transaction banking at the Saudi British Bank (SABB).

And there is an obvious role for banks in the region to play financial intermediary between transacting parties from the two the regions.

“Tremendous growth is taking place in the West to East trade and FIs are the natural catalyst to connect that flow,” says Mark Yassin, senior managing director—head of global banking at the National Bank of Abu Dhabi (NBAD).

And there has been a wave of activities as banks compete to build up their cash management and client advisory capabilities to serve multinational corporations and financial institutions looking to tap into growth opportunities in MEA.

“Clients are increasingly looking for...

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Categories: Cash Management Cycle, Payments, Risk & Compliance, Risk and Regulation, Risk Management, Technology & Operations, Transaction Banking
Keywords: MEA, Gulf Banks, Saudi British Bank, NBAD, Cash Management, STP, IT, Regulation, Compliance, APAC, Payment Channels, KYC, AML, Risk Management, Transaction Banking, Payments, Citibank, QNB