g
the shareholding of around 40% that had been in the hands of Société Générale.
Business shake-up
There was a decision to upgrade and enhance the bank’s corporate banking, trade finance and treasury services. It also sought to add new services in retail banking, which is split into a premium service for wealthy customers and a retail banking line with a branch network.
Islamic banking window
The bank also turned its attention to Islamic banking operations in 2010, but not as its main focus. Ghazouani believed opening an Islamic window is a profitable and positive decision, ‘because this sector is increasing its activity and gaining customers across the world’.
It was felt something that was becoming a prerequisite in UAE. ‘Taking into account that UAB is based in an Islamic emirate, customers are most likely to demand Islamic banking services,’ Ghazouani explained, ‘and we thought it was essential to opt for this if we wanted to be competitive and get our share in this market.’ He said that UAB immediately started to gain clients for this form of banking.
UAB’s Islamic window is retail in focus and offers Shari’ah- compliant retail deposit products, current and saving accounts, and investment products.
The launch of its ‘Sadara’ wealth management services (which opened up a fee-based income for the bank) and Islamic banking services had a positive impact on UAB’s customer base, according to the bank.
However, ahead of all of this, the bank needed the systems to support the move, so there were decisions to be made about the business technology infrastructure and strategy.
System selection
From the technology angle, UAB considered that a flexible core banking system was needed. The bank felt that its MIE legacy solution (a Cobol-based system that originated from Société Générale), couldn’t meet the market requirements at that point. And so, Misys came into play.
Ghazouani said that when it comes to Islamic banking, a
solution built for conventional banking operations needed to be adapted to the regulations and requirements of both the country and market, and that is where one can see the flexibility of a product’s architecture.
The accounting side of the business, he said, is where more relevant differences can be found, but from a technical perspective, both forms of banking are similar.
The bank looked at other products including Finacle from Infosys, T24 from Temenos and Flexcube from Oracle FSS.
UAB’s shareholder, Commercial Bank of Qatar, was used as the main reference for the Misys system, having been a user of Equation for about ten years.
Flexibility was the main requirement at the selection process, given that the system needed to be interfaced with the UAE’s clearing system, the Tradix treasury system from Sungard and an e-banking application from 3i Infotech, which was being implemented at the same time.
There have not been many new sales of Equation in the last few years but it was one of the first to be adapted for Shari’ah banking and this has served it well in the Middle East. Indeed, most brand new licenses have been here.
Implementation
Not everything went smoothly at UAB in terms of the implementation.
According to Ghazouani, the entire roll-out was difficult to cope with, ‘but solutions were always found’. In his estimation, both teams’ understanding of Islamic banking was of great assistance through the process.
A high level of collaboration and comprehension of what was required in a project of these characteristics was always needed. ‘One needs to choose the right people to do the right job,’ he added.
From the strategic angle, a year after Commercial Bank of Qatar acquired its UAB stake, both banks created a strategic alliance.
This was a cross-border agreement between the two (Commercial Bank of Qatar had previous experience in this kind of agreement, through an alliance with National Bank of Oman in 2006). The positive effect of different initiatives
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