As Spaniards endured one of Europe’s most stringent pandemic lockdowns, business for Banco Santander’s digital-only Openbank flourished. Its brokerage client base expanded 58 per cent in the first four months of the year and trading in shares, exchange traded funds and warrants on its platform more than doubled.
The confinement has made people digital beings “by decree”, says Ezequiel Szafir, Openbank’s chief executive. With that trend expected to continue, he believes banks of the future will look increasingly like Amazon.com – online shop fronts for financial products in much the same way as the retailer is for consumer goods.
Amazon took something that's real, which is retail, and simply made it digital. We're trying to do the same transformation in banking.
“Amazon took something that’s real, which is retail, and simply made it digital,” says Mr Szafir, a former Amazon executive hired in 2015 to oversee Openbank’s new platform. “We’re trying to do the same transformation in banking.”
Businesses reviewing post-coronavirus strategies are finding that online activity – from shopping and gaming to banking and social networking – that was shaking up their worlds even before the pandemic, has increased. For retail banking, a survey by McKinsey & Co from mid-April found a jump of as much as 20 per cent in digital channel use across Europe. More than one in five customers in Spain and Britain tried online banking for the first time.
That is giving a new impetus to banks’ online push. They are looking to speed up plans to move creaking legacy platforms on to the cloud, a slow and often costly process. Some are also building standalone online platforms from scratch or using off-the-shelf solutions designed by FinTech companies, which may be faster and cheaper.
“Many banking groups are taking a hybrid strategy, combining the effort of transforming the original bank and also developing a neobank or, at least, some speed boats, sometimes in alliance with FinTech,” says Francisco Uria, head of financial services, banking and capital markets in Europe, the Middle East and Africa at KPMG.
Banks globally will spend about $1 trillion (Dh3.67tn) over three years to take more of their operations online, according to an Accenture report. Spending on digital transformation has been led by US banks, with JP Morgan Chase earmarking $11.4 billion a year.
“It’s the only way they’ll remain competitive,” says Antony Jenkins, chief executive of Barclays Bank between 2012 and 2015 and now chairman and founder of 10x Future Technologies.
“They’re already under pressure because return on equity is poor. They have to compete with FinTech and big tech. They need to get more agile, get these functionalities on to the market quicker.”
Europe’s banks can expect revenue to fall by more than 40 per cent, which means it will take them four years to return to pre-coronavirus levels, the McKinsey report found. With an increase in interest rates from historic lows delayed by the crisis, survival will require cutting costs. That will mean shutting down many more branches, slashing jobs and taking the show online.
The cost-to-income ratio for traditional banks is 55 per cent to 60 per cent compared with half that for online challenger lenders. Santander chairwoman Ana Botin told investors Openbank’s expansion would allow it to reach a ratio of 25 per cent to 35 per cent, a level the entire group could attain in the long term. Santander’s 2018 cost-to-income ratio was 47 per cent, according to S&P Global.
Santander is ploughing €5bn (Dh20.63bn) a year to put its legacy system data in the cloud, even as Openbank expands from Spain into 10 other markets. Ms Botin calls it combining “supertankers” with “speedboats” and suggested in a speech last year that Openbank could eventually become the platform for “a significant part of our business”.
The Spanish bank’s peers are adopting similar strategies. In the UK, Royal Bank of Scotland Group is working on digital business platform Mettle. Nationwide Building Society is working with 10x Futures technology while Lloyds Banking Group is doing something similar with cloud-native digital platform provider Thought Machine. Goldman Sachs Group started Marcus by Goldman Sachs in Britain after launching it in the US.
Digital metamorphoses may be easier said than done. Years of mergers have left banks with core platforms patched together from disparate systems – “a spaghetti party”, as Mr Szafir puts it. For many, it may be simpler to start from scratch. Unlike a legacy platform, native cloud platforms are like newly built homes where the wiring is exactly where it needs to be.
“I sometimes refer to banks as museums of technology because they have got every generation of hardware and software within them,” says 10x’s Mr Jenkins.
The native cloud platform developed by Mr Jenkins’s company is being tried out by banks such as Australia’s Westpac Banking and Nationwide Building Society in the UK. Part of the efficiency of the new platforms is their business model is built around customers rather than products. That cuts out data overlap such as names and addresses that on legacy platforms appear several times for each product.
The open architecture also paves the way for collaboration between financial institutions – something that is being encouraged by regulatory authorities, with the open banking initiative in the UK and the PSD2 directive in the European Union.
“We are moving towards where the bank is becoming a platform with an e-commerce marketplace,” says Oliver Bussmann, a former chief information officer at the UBS Group and now chief executive of Swiss consultancy Bussmann Advisory.
“You sell not only your own products but also get commissions for selling services and products from third parties.”
It is leading to a bifurcation in banking, says 10x’s Mr Jenkins. Larger lenders may choose to use their size and brand recognition to become the distributors of products on their platforms, a bit like an Amazon.
Smaller banks will become more like FinTechs, specialising in certain products that they will sell on the platforms of others. Some, like Santander, will try to do both, Openbank’s Mr Szafir, says.
New systems are already being tested on segments. Openbank’s platform is used for Santander Bank in Miami and could eventually be used by the US unit. In the UK, Lloyds is still testing start-up Thought Machine’s Vault platform, says Zaka Mian, group director of transformation at Lloyds.
“We continue to test and learn to develop the confidence and certainty in the use of public cloud,” Mr Mian says. “But if you look at the very long-term, do I think that [we] and many other banks will end up on technologies like this? More than likely, I would suspect.”
2020 Oscars winners: in numbers
- Parasite – 4
- 1917– 3
- Ford v Ferrari – 2
- Joker – 2
- Once Upon a Time ... in Hollywood – 2
- American Factory – 1
- Bombshell – 1
- Hair Love – 1
- Jojo Rabbit – 1
- Judy – 1
- Little Women – 1
- Learning to Skateboard in a Warzone (If You're a Girl) – 1
- Marriage Story – 1
- Rocketman – 1
- The Neighbors' Window – 1
- Toy Story 4 – 1
Singham Again
Director: Rohit Shetty
Stars: Ajay Devgn, Kareena Kapoor Khan, Ranveer Singh, Akshay Kumar, Tiger Shroff, Deepika Padukone
Rating: 3/5
The specs: 2018 Nissan 370Z Nismo
The specs: 2018 Nissan 370Z Nismo
Price, base / as tested: Dh182,178
Engine: 3.7-litre V6
Power: 350hp @ 7,400rpm
Torque: 374Nm @ 5,200rpm
Transmission: Seven-speed automatic
Fuel consumption, combined: 10.5L / 100km
Brief scores:
Toss: Northern Warriors, elected to field first
Bengal Tigers 130-1 (10 ov)
Roy 60 not out, Rutherford 47 not out
Northern Warriors 94-7 (10 ov)
Simmons 44; Yamin 4-4
COMPANY PROFILE
Name: Qyubic
Started: October 2023
Founder: Namrata Raina
Based: Dubai
Sector: E-commerce
Current number of staff: 10
Investment stage: Pre-seed
Initial investment: Undisclosed
TEAMS
EUROPE:
Justin Rose, Francesco Molinari, Tyrrell Hatton, Tommy Fleetwood, Jon Rahm, Rory McIlroy, Alex Noren, Thorbjorn Olesen, Paul Casey, Sergio Garcia, Ian Poulter, Henrik Stenson
USA:
Brooks Koepka, Justin Thomas, Dustin Johnson, Patrick Reed, Bubba Watson, Jordan Spieth, Rickie Fowler, Webb Simpson, Tiger Woods, Phil Mickelson, Bryson DeChambeau ( 1 TBC)
RACE CARD
5pm: Handicap (PA) Dh70,000 1,400m
5.30pm: Handicap (TB) Dh70,000 1,000m
6pm: Maiden (PA) Dh70,000 2,000m
6.30pm: Handicap (PA) Dh70,000 2,000m
7pm: Maiden (PA) Dh70,000 1,600m
7.30pm: Al Ain Mile Group 3 (PA) Dh350,000 1,600m
8pm: Handicap (PA) Dh70,000 1,600m
Amith's selections:
5pm: AF Sail
5.30pm: Dahawi
6pm: Taajer
6.30pm: Pharitz Oubai
7pm: Winked
7.30pm: Shahm
8pm: Raniah
If you go
The flights
Etihad and Emirates fly direct from the UAE to Chicago from Dh5,215 return including taxes.
The hotels
Recommended hotels include the Intercontinental Chicago Magnificent Mile, located in an iconic skyscraper complete with a 1929 Olympic-size swimming pool from US$299 (Dh1,100) per night including taxes, and the Omni Chicago Hotel, an excellent value downtown address with elegant art deco furnishings and an excellent in-house restaurant. Rooms from US$239 (Dh877) per night including taxes.
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Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
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Our legal consultant
Name: Dr Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
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RESULTS
6.30pm Al Maktoum Challenge Round-1 Group One (PA) US$65,000 (Dirt) 1,600m
Winner RB Money To Burn, Fabrice Veron (jockey), Eric Lemartinel (trainer).
7.05pm Handicap (TB) $175,000 (Turf) 1,200m
Winner Ekhtiyaar, Jim Crowley, Doug Watson.
7.40pm UAE 2000 Guineas Trial Conditions (TB) $100,000 (D) 1,600m
Winner Commanding, Richard Mullen, Satish Seemar.
8.15pm Singspiel Stakes Group Two (TB) $250,000 (T) 1,800m
Winner Benbatl, Christophe Soumillon, Saeed bin Suroor.
8.50pm Handicap (TB) $135,000 (T) 1,600m
Winner Zakouski, William Buick, Charlie Appleby.
9.25pm Al Maktoum Challenge Round-1 Group Two (TB) $350,000 (D) 1,600m
Winner Kimbear, Pat Dobbs, Doug Watson.
10pm Dubai Trophy Conditions (TB) $100,000 (T) 1,200m
Winner Platinum Star, Christophe Soumillon, Saeed bin Suroor.
10.35pm Handicap (TB) $135,000 (T) 1,600m
Winner Key Victory, James Doyle, Charlie Appleby.
COMPANY%20PROFILE
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Tamkeen's offering
- Option 1: 70% in year 1, 50% in year 2, 30% in year 3
- Option 2: 50% across three years
- Option 3: 30% across five years
MATHC INFO
England 19 (Try: Tuilagi; Cons: Farrell; Pens: Ford (4)
New Zealand 7 (Try: Savea; Con: Mo'unga)
Coal Black Mornings
Brett Anderson
Little Brown Book Group
'Avengers: Infinity War'
Dir: The Russo Brothers
Starring: Chris Evans, Chris Pratt, Tom Holland, Robert Downey Junior, Scarlett Johansson, Elizabeth Olsen
Four stars
Company%20profile
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Winners
Ballon d’Or (Men’s)
Ousmane Dembélé (Paris Saint-Germain / France)
Ballon d’Or Féminin (Women’s)
Aitana Bonmatí (Barcelona / Spain)
Kopa Trophy (Best player under 21 – Men’s)
Lamine Yamal (Barcelona / Spain)
Best Young Women’s Player
Vicky López (Barcelona / Spain)
Yashin Trophy (Best Goalkeeper – Men’s)
Gianluigi Donnarumma (Paris Saint-Germain and Manchester City / Italy)
Best Women’s Goalkeeper
Hannah Hampton (England / Aston Villa and Chelsea)
Men’s Coach of the Year
Luis Enrique (Paris Saint-Germain)
Women’s Coach of the Year
Sarina Wiegman (England)
MATCH INFO
Tottenham Hotspur 0 Everton 1 (Calvert-Lewin 55')
Man of the Match Allan (Everton)
Ziina users can donate to relief efforts in Beirut
Ziina users will be able to use the app to help relief efforts in Beirut, which has been left reeling after an August blast caused an estimated $15 billion in damage and left thousands homeless. Ziina has partnered with the United Nations High Commissioner for Refugees to raise money for the Lebanese capital, co-founder Faisal Toukan says. “As of October 1, the UNHCR has the first certified badge on Ziina and is automatically part of user's top friends' list during this campaign. Users can now donate any amount to the Beirut relief with two clicks. The money raised will go towards rebuilding houses for the families that were impacted by the explosion.”
The specs
Engine: 1.6-litre 4-cyl turbo
Power: 217hp at 5,750rpm
Torque: 300Nm at 1,900rpm
Transmission: eight-speed auto
Price: from Dh130,000
On sale: now
A list of the animal rescue organisations in the UAE
Director: Jon Favreau
Starring: Donald Glover, Seth Rogen, John Oliver
Rating: 2 out of 5 stars
UAE currency: the story behind the money in your pockets
PROFILE
Name: Enhance Fitness
Year started: 2018
Based: UAE
Employees: 200
Amount raised: $3m
Investors: Global Ventures and angel investors
Islamophobia definition
A widely accepted definition was made by the All Party Parliamentary Group on British Muslims in 2019: “Islamophobia is rooted in racism and is a type of racism that targets expressions of Muslimness or perceived Muslimness.” It further defines it as “inciting hatred or violence against Muslims”.
Brief scoreline:
Manchester United 1
Mata 11'
Chelsea 1
Alonso 43'
PAKISTAN SQUAD
Abid Ali, Fakhar Zaman, Imam-ul-Haq, Shan Masood, Azhar Ali (test captain), Babar Azam (T20 captain), Asad Shafiq, Fawad Alam, Haider Ali, Iftikhar Ahmad, Khushdil Shah, Mohammad Hafeez, Shoaib Malik, Mohammad Rizwan (wicketkeeper), Sarfaraz Ahmed (wicketkeeper), Faheem Ashraf, Haris Rauf, Imran Khan, Mohammad Abbas, Mohammad Hasnain, Naseem Shah, Shaheen Afridi, Sohail Khan, Usman Shinwari, Wahab Riaz, Imad Wasim, Kashif Bhatti, Shadab Khan and Yasir Shah.
Two-step truce
The UN-brokered ceasefire deal for Hodeidah will be implemented in two stages, with the first to be completed before the New Year begins, according to the Arab Coalition supporting the Yemeni government.
By midnight on December 31, the Houthi rebels will have to withdraw from the ports of Hodeidah, Ras Issa and Al Saqef, coalition officials told The National.
The second stage will be the complete withdrawal of all pro-government forces and rebels from Hodeidah city, to be completed by midnight on January 7.
The process is to be overseen by a Redeployment Co-ordination Committee (RCC) comprising UN monitors and representatives of the government and the rebels.
The agreement also calls the deployment of UN-supervised neutral forces in the city and the establishment of humanitarian corridors to ensure distribution of aid across the country.
The language of diplomacy in 1853
Treaty of Peace in Perpetuity Agreed Upon by the Chiefs of the Arabian Coast on Behalf of Themselves, Their Heirs and Successors Under the Mediation of the Resident of the Persian Gulf, 1853
(This treaty gave the region the name “Trucial States”.)
We, whose seals are hereunto affixed, Sheikh Sultan bin Suggar, Chief of Rassool-Kheimah, Sheikh Saeed bin Tahnoon, Chief of Aboo Dhebbee, Sheikh Saeed bin Buyte, Chief of Debay, Sheikh Hamid bin Rashed, Chief of Ejman, Sheikh Abdoola bin Rashed, Chief of Umm-ool-Keiweyn, having experienced for a series of years the benefits and advantages resulting from a maritime truce contracted amongst ourselves under the mediation of the Resident in the Persian Gulf and renewed from time to time up to the present period, and being fully impressed, therefore, with a sense of evil consequence formerly arising, from the prosecution of our feuds at sea, whereby our subjects and dependants were prevented from carrying on the pearl fishery in security, and were exposed to interruption and molestation when passing on their lawful occasions, accordingly, we, as aforesaid have determined, for ourselves, our heirs and successors, to conclude together a lasting and inviolable peace from this time forth in perpetuity.
Taken from Britain and Saudi Arabia, 1925-1939: the Imperial Oasis, by Clive Leatherdale
If you go
Flight connections to Ulaanbaatar are available through a variety of hubs, including Seoul and Beijing, with airlines including Mongolian Airlines and Korean Air. While some nationalities, such as Americans, don’t need a tourist visa for Mongolia, others, including UAE citizens, can obtain a visa on arrival, while others including UK citizens, need to obtain a visa in advance. Contact the Mongolian Embassy in the UAE for more information.
Nomadic Road offers expedition-style trips to Mongolia in January and August, and other destinations during most other months. Its nine-day August 2020 Mongolia trip will cost from $5,250 per person based on two sharing, including airport transfers, two nights’ hotel accommodation in Ulaanbaatar, vehicle rental, fuel, third party vehicle liability insurance, the services of a guide and support team, accommodation, food and entrance fees; nomadicroad.com
A fully guided three-day, two-night itinerary at Three Camel Lodge costs from $2,420 per person based on two sharing, including airport transfers, accommodation, meals and excursions including the Yol Valley and Flaming Cliffs. A return internal flight from Ulaanbaatar to Dalanzadgad costs $300 per person and the flight takes 90 minutes each way; threecamellodge.com
RESULT
Bayer Leverkusen 2 Bayern Munich 4
Leverkusen: Alario (9'), Wirtz (89')
Bayern: Coman (27'), Goretzka (42'), Gnabry (45'), Lewandowski (66')
Results
6.30pm: The Madjani Stakes (PA) Group 3 Dh175,000 (Dirt) 1,900m
Winner: Aatebat Al Khalediah, Fernando Jara (jockey), Ali Rashid Al Raihe (trainer).
7.05pm: Maiden (TB) Dh165,000 (D) 1,400m
Winner: Down On Da Bayou, Royston Ffrench, Salem bin Ghadayer.
7.40pm: Maiden (TB) Dh165,000 (D) 1,600m
Winner: Dubai Avenue, Fernando Jara, Ali Rashid Al Raihe.
8.15pm: Handicap (TB) Dh190,000 (D) 1,200m
Winner: My Catch, Pat Dobbs, Doug Watson.
8.50pm: Dubai Creek Mile (TB) Listed Dh265,000 (D) 1,600m
Winner: Secret Ambition, Tadhg O’Shea, Satish Seemar.
9.25pm: Handicap (TB) Dh190,000 (D) 1,600m
Winner: Golden Goal, Pat Dobbs, Doug Watson.
MATCH INFO
Uefa Champioons League semi-final:
First leg: Liverpool 5 Roma 2
Second leg: Wednesday, May 2, Stadio Olimpico, Rome
TV: BeIN Sports, 10.45pm (UAE)
Uefa Champions League play-off
First leg: Wednesday, 11pm (UAE)
Ajax v Dynamo Kiev
Second leg: Tuesday, August 28, 11pm (UAE)
Dynamo Kiev v Ajax
