The impact of recent crises has been felt across every business, regardless of size and sector. Whether it’s supply chain disruption brought on by COVID-19 or a surge in prices in the wake of the conflict in Ukraine, the stresses and strains have been significant.
For the leadership team at Abu Dhabi Commercial Bank (ADCB) the impacts have been all too real. “Those past few years were pretty stressful, but I think the UAE has done well,” says Bhupesh Sharma, ADCB’s head of transaction banking. “Having said that, I don’t think we are out of the tunnel yet, because just when we were thinking that we were clear and the world was coming back to normal, we then had the war and inflation and interest rates going up.”
However, it’s equally true that the UAE’s smaller companies are finding ways to adapt and benefit from the country’s dynamic economy. “From an SME point of view, the market is doing well,” says Gopal Iyer, ADCB’s head of SME.
“We see a lot of new businesses getting set up, and benefits for SMEs are trickling down as there is enough for all of these businesses to do – when there’s government spending on large projects, that cascades to large corporates who get the big project, and then the subcontractors or the smaller players get parts of that business.”
Iyer also points out that because the level of liquidity in the market remains high, SMEs are able to get paid on time – a refreshing development given how smaller firms are often the last ones to see cash in the bank. “It’s a good thing they get paid faster – and that is helping them sustain their business and grow,” says Iyer.
That virtuous circle of growth was, Iyer admits, put under pressure by the strains of the pandemic. It was a time, he says, when the bank needed to stand strong beside its customers. “Even during COVID we remained open and exposed to the market, so there was government support to SMEs,” he recalls.
“We as a bank were one of the key players in those initiatives, where we supported a lot of those government programmes and came up with some programmes of our own to support SMEs, which has given us a good standing in this market.”
That collaboration between bank and customer has continued as they emerge from the pandemic. And now, as speed and transparency of operations become even more of a competitive advantage, the bank’s new digital tools are coming into their own.
“Even before COVID we had been working hard to improve the customer experience on our digital channels and had encouraged many SMEs to migrate,” Iyer says. “But then some habits are difficult to break and I think COVID in some ways helped us break those habits and migrate customers faster.”
Since then, ADCB has met the challenge of developing greater digital capacity for its customers. “We want to offer an omnichannel experience where customers use some digital where appropriate, and then for something else they go to staff at a bank branch or to a relationship manager.”
Operating in an economy where the high level of foreign ownership and the preponderance of foreign capital inflows had created an onerous know your customer regime to emerge, Sharma says addressing the time-consuming onboarding process for local customers became a priority.
Central to ADCB’s development as a truly digital bank has been its embrace of new customer onboarding techniques that have helped the UAE move on from its previously inefficient regime into a genuinely progressive place for banking services.
“I think we were the first and only bank to offer a dirham-only account that addresses the needs of SMEs, because our analysis showed a significant number of SME and micro-SME customers actually traded locally: they would buy and sell locally and provide services to local customers, getting paid and running payroll in local currency,” Sharma says.
Now, subject to the bank being satisfied with the customer’s business model, SME customers – including new start-ups – will be able to open accounts with the right checks in place, making the process smoother, faster and more user-friendly.
“This is something that we said we can also roll out digitally and somebody could come online to upload their application, trade licence copy and all other necessary documents and get the account opened faster,” Sharma says.
“Ultimately, our customers’ expectations have changed in the past few years, and we have to respond. So in essence, we said the client need not come to the bank; the bank goes to them, and effectively you’ve got a bank at your desktop or your mobile phone.
“Our purpose is if we can do the entire onboarding and servicing of customers entirely digital, that’s the key word.”
Of course, while payments sit at the core of the ADCB value proposition, online payments through the bank’s cash management and trade finance portals also help meet clients’ processing requirements across the board.
“On the cash management front – whether it is a sole proprietorship SME business that needs easy-to-use mobile applications to conduct single payments, salary and cross-border – our award-winning ProCash mobile app has everything needed to meet all types of day-to-day business requirements,” Sharma explains.
“Meanwhile, on the mid-corporate and large corporate front, we’re continuing to invest in API technologies to bring our clients even closer to our products and services, enabling our clients to conduct high-volume, high-value transactions with seamless integrations and open banking solutions.
“In addition to the above, our trade finance working capital solutions have allowed our clients to bridge the gap between their receivables and payables with the likes of invoice financing, bill discounting, letters of credit and bank guarantees, and also through our online trade solution – ProTrade.”
And it’s not just SMEs that are benefitting from greater integration of digital. “At ADCB we understand the importance of a complete working capital solution for all clients, at all levels, be it SME or large corporate,” says Iyer. “For this, we have developed payments and collection products and services that ensure a healthy balance sheet for our clients, which is key for their growth.”
On the collection side, which is significant for any business, ADCB is now offering products that ease the receivables for clients through its cheque-scanning solution, direct debit system and virtual accounts.
“And then for virtual accounts, we are close to finalising a product enhancement that will offer payments from the virtual accounts (payment on behalf of, or POBO) on top of the already available collection and reconciliation feature of our virtual account solution,” Iyer says.
This all adds up to a bank that is working hand in hand with its customers – big and small, domestic and foreign – to truly deliver on its promises, in good times and bad.
Christian Doherty is a freelance business and finance journalist, and former editor of The Treasurer