DUBAI: Mashreqbank has applied for a banking license in Saudi Arabia and is seeking to enter the Omani market, Ahmed Abdelaal, CEO of Mashreqbank, told Bloomberg News.
The Dubai-based lender no longer sees its main competitors as other bricks-and-mortar lenders and sees the future of retail banking as digital only, he said in an interview.
Traditional bank branches will no longer exist “very soon,” Abdelaal told Bloomberg. The Dubai-based lender currently operates just 10 branches in the UAE, having closed 24 in the past two years, he said.
“There’s a complete shift in our strategy to focus on digital channels,” which now account for the majority of new business at the lender, Abdelaal said. “We still have some clients who rely on brick and mortar but our numbers show these are diminishing by the minute.”
“Our real competitors are the providers of client experience…the owners of data, the owners of information,” he said.
The Saudi Cabinet gave its nod to the Kingdom’s finance minister to issue licenses for the country’s first digital banks, STC Bank and Saudi Digital Bank, the Saudi Press Agency (SPA) reported in June.
Digital banks licensed in Saudi Arabia will help improve the quality and user experience for customers in the Kingdom, supporting innovation and reducing costs, Yazeed Alsheikh, director for general of banking control at Saudi Central Bank (SAMA), said at the time.
This will directly contribute to stimulating competition with local banks and financial technology companies, he said.
Mashreq Bank set to move half of its jobs to cheaper locationsMashreq to cut branches as it shifts toward digital bankingDigital banks in Saudi Arabia to reduce costs and stimulate competition — SAMA