Fragmented payment systems and a lack of standardization have hampered the cash management efforts of businesses in the Middle East, but that should change.
Although Covid-19 has boosted the adoption of digital payments in the region, new government initiatives and regulatory measures in the Middle East are also fostering a cross-border payments ecosystem that will bring greater visibility and control to Treasury departments. .
Ahmad Alyousef, senior vice president and head of cash management product solutions at the Saudi National Bank (SNB), which won the award for best bank for payments and collections, says several initiatives have already resulted in faster and more efficient payment transactions. while reducing transaction costs and ushering in real-time payments.
One such initiative, developed by the six member states of the Gulf Cooperation Council (GCC), is GCCNet, which connects all GCC national switches in real time to establish a single network.
“This enabled the use of debit cards issued in one GCC country in another, thereby reducing the cost of cross-border transactions,” says Alyousef. “In addition, some GCC countries have also created real-time payment systems for low-value local and cross-border transfers. In Saudi Arabia, for example, the instant payment system facilitates day-to-day payments with instant credit. Fintechs have played an important role in increasing the demand for cross-border payment using digital wallets.
Following the completion in April 2021 of the merger of two Saudi banks – National Commercial Bank and Samba, to form SNB – the new bank took nine months to provide a seamless service migration to its customers. SNB also became the first bank in Saudi Arabia to establish a sustainable financing framework and is well placed to help businesses recover from the pandemic.
With a network deeply rooted in the Middle East and North Africa region and extensive local expertise, winner of Best Bank for Cash Management, Arab Bank, is well placed to price transactions based on local market requirements, credit risk and historical data.
Arab Bank’s enterprise digital platform, ArabiConnect, offers a range of global transaction banking services; while its ArabiSync host-to-host offering provides a superior customer experience. To stay ahead of the treasury management innovation curve, Arab Bank launched a fintech-focused business accelerator program, AB Accelerator, in Egypt in August 2021, following the success of a similar program it had previously set up in Jordan.
The National Bank of Egypt (NBE), which won the Best Bank for Cash Management award, has branches and affiliated banking units in the United Arab Emirates, Ethiopia, South Africa, Saudi Arabia, in Sudan, the United States, the United Kingdom and China; and it has a correspondent banking network that includes over 39 accounts in North America, Eurozone, UK, Middle East, Asia, Canada and Australia. NBE arranged and managed more syndicated loan deals than any financial institution in the Middle East and Africa last year, managing 51 financing deals worth more than 235 billion Egyptian pounds (about $15 billion) in 2021.
Banque Misr won the Best Short-Term Investment/Money Market Fund Provider award for its Banque Misr Money Market Fund, Youm B Youm, which provides low-barrier access to the Egyptian debt capital markets without require a significant minimum investment. In addition to the absence of subscription and redemption fees, investors can increase their investments or redeem their profits daily, providing liquidity when needed.
Liquidity and easy access to cash remain essential for businesses and banks to play a crucial role in providing real-time visibility tools and instant payments. Aided by new payment rails and national and regional regulations and standards set by organizations such as Swift, banks in the Middle East have a real opportunity to benefit Treasury Departments and promote growth for all.