Andrew Duff

These are clearly interesting times for UAE chief executive officer Andrew Duff, an engaging Australian who joined Standard Chartered from Citibank in 1999. He admits to enjoying life in a dynamic economy at a time when many bankers around the world have hit a wall.

'Standard Chartered has been in the UAE since 1958, but this is a great time to be here,' he says. 'The breathtaking vision of Sheikh Mohammed is taking this country down the road of economic diversification, and the target of increasing the share of GDP from financial services from 10 to 20% in ten years is fantastic.

'For us it is a matter of targeting the growth sectors and moving with them. Obviously we are a major mortgage bank in many other parts of the world, so developments in the Dubai real estate market interest us very much. We are looking at this market now, and very much believe in property ownership as a bedrock of the economy.

'This is the right way to stop the outflow of funds from expatriates and increase savings and investment in the UAE. That in itself will create a more dynamic financial services sector, and encourage the development of asset management funds and the stock market. It all links together'.

A committee member of the Australian Business Group in the Gulf, Mr. Duff is also greatly impressed by the opportunities presented by the new Dubai International Financial Centre.

'The authorities want to bring in 50,000 people for the DIFC, and it's very well conceived with international best practice for each activity. There will be a new stock exchange, asset management and capital markets are an area that will attract us. The DIFC will be making the bond issues, and we would be likely to shift these operations there. It would make sense to be where the action is'.

For Standard Chartered the DIFC offers an added international dimension to its existing strong range of local banking services. With its acquisition of Grindlays now behind it, the bank has a dominant position in such profitable areas as credit cards, auto loans, cash management, and trade services. The bank is also investing heavily in its IT infrastructure.

'Our corporate customers here want all five channels, that is proprietary, host-to-host, paper, fax and phone and the Internet,' notes Mr. Duff. 'We will have the corporate Internet service fully rolled out by the end of Q1 2003, and the Internet Protocol is already built into all our systems. But we have found reluctance by corporate customers to make transactions online.

'It's just a question of time. When we introduced proprietary channels in the mid-1980s it was the same. People did not want to use them. Now they trust the proprietary channels and do not want the Internet. It will change. The Internet is by far the most cost-effective channel of delivery for the bank, and ultimately the customer'.

Mr. Duff denies that the bank has scaled back its IT investment program since the collapse of the technology investment bubble. Rather, he says, 'customers themselves are perhaps slower to adopt new technology than they used to be. The bank's plans have not changed. We can see that this is the future of banking'.

Another revolutionary Internet service, a horizontal business exchange called B2BX, will also be launched in the UAE early next year. This is an end-to-end trade facilitation service that is already live in Hong Kong.

'Trade deals can be completed through the messaging system on the B2BX which ultimately will replace all the paper documents required to facilitate trade. The paper system is several hundred years' old and the B2BX will replace it entirely.

'Say a US firm buys widgets from China, and both firms are hooked into the B2BX system. They can meet each other with a web camera and place an order with an order form that can be instantly confirmed. Then an invoice is raised, a container shipment booked, insurance arranged, and banking lines opened. This will eventually replace documentary trade. It is a true revolution'.

This is a pretty impressive demonstration of the kind of international innovation that a foreign bank like Standard Chartered can bring to the UAE, although Mr. Duff likes to style his operation as 'a local bank with international connections'.

In the future, he predicts a further consolidation in the UAE banking market with a big role for Standard Chartered's 11 branches in the country. It is not hard to see that the arrival of mortgages, new capital markets and the Internet offer some definite opportunities to take advantage of 'international connections' and that Mr. Duff intends to keep his bank at the front of developments.