GCC banks and money managers have a lot opportunity for growth, but inefficient and outdated practices slow down progress.
The future is bright for banks and money managers in the Gulf Cooperation Council countries, and Middle East-North Africa (MENA) region at large.
Stock markets in the Gulf region finished 2021 on a high note, with the Abu Dhabi index performing the best in the region.
And according to an S&P report, GCC banks will benefit from high oil prices that we currently see. A recovering economy and high prices, among other factors, will translate positively to equities markets and sovereign wealth funds in the region, a boon for investment managers.
Despite the overall positive outlook, there are headwinds. These headwinds, both internal and external, will surely impact operations.
As much as we'd like to believe otherwise, the COVID-19 pandemic is not over.
And as viruses mutate, there's always a chance for more contagious and threatening variants.
This would result in more lockdowns and travel restrictions, slowing down economic activity and hurting industries and sectors that have shined as of late.
Not to mention, if the workforce gets infected, it hurts productivity.
In such cases, bottom lines will be negatively affected.
Many banks and investment firms in the MENA/GCC regions rely on foreign talent, often hiring skilled professionals from South Asia to handle middle- and back-office operational procedures.
But as we mentioned before, the pandemic is not over. Potential future lockdowns and travel restrictions could limit the inflow of talent.
Limited flights and fewer work visas available would make it harder for banks and investment managers to bring in their (new) employees in a timely manner.
Similarly, travel restrictions would make it harder for foreign workers to return home in times of emergency. As a result, qualified job applicants may think twice about moving abroad for work if they can't return home to tend to family.
From our experience with Middle Eastern banks and large wealth and asset managers, we know the challenges they face in operations.
There is a lot of manual work, particularly around reporting and data entry/data aggregation. So, they often often "throw bodies" at a task or problem to be solved.
While it's nice to have the human capacity, these are highly error-prone processes, and it costs both time and money to go back and fix the errors.
Such workloads are not always an efficient use of employees' time and skill sets, nor are they efficient uses of company resources.
Leveraging staff and optimizing operational workflows are important, and Empaxis can help.
Outsourcing is a great way for banks and money managers in the GCC and MENA regions to avoid the hassle of dealing with turnover and training up new employees.
When working with a qualified outsourcing partner like Empaxis, for example, firms can easily and quickly access operational talent. These organizations no longer have to worry about future lockdowns, travel restrictions, and work visa complications for their middle- and back-office teams.
The outsourcing provider already has the trained operations personnel firms need, and the talent can easily plug in to a firm's setup, where the banks and investment managers set the security controls and workflow requirements.
In addition, outsourcing helps firms use time and monetary resources wisely, allowing themselves to focus on activities and workflows they're best at doing.
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When it comes to the finance and investments space, outsourcing in the Middle East is on a growth trajectory.
According to Data Bridge Market Research, the middle-office outsourcing market for the Middle East and Africa is projected to grow at a rate of 8.9% CAGR (Compound Annual Growth Rate) through 2028. By 2028, this market will spend an estimated USD $751.49 million on middle-office outsourcing alone.
As more banks and investment firms adopt outsourcing as part of their business model, outsourcing can no longer be thought of as a provider "simply doing the work." Rather, the services provider will be a strategic partner, helping the firm define operational objectives, lead in digital transformation, and improve the client experience.
Ammar Al Malik, Managing Director of Dubai Internet City and Dubai Outsource City, said it best:
"In the past decade, I have witnessed the evolving nature of outsourcing and shared services (OSS) first hand... Companies are rapidly shifting their focus away from merely contracting out tasks...
Instead, they are looking to work in partnership with specialist outsourcing providers to bridge the skills gap, streamline processes and maximize productivity.
More importantly, businesses actively look towards outsourcing providers and shared services centers for ideation and innovation...
I remain convinced that the outsourcing industry will drive competitive advantages for companies in this modern era, and revolutionize the way we all do business."
As mentioned before, manual work slows down progress. If the work is routine and labor-intensive, firms can automate it.
Report generation, data entry, data aggregation, and alternative investment statement processing are just a few areas where Middle East banks and investment organizations can leverage automation, specifically Robotic Process Automation (RPA).
With RPA, these firms benefit from faster processing times, fewer errors, and long-term increased ROI (return on investment).
If you're curious about what workflows you can automate and how to get started, check out our Automation Guide.
As banks in the GCC and the rest of the Middle East grow in prominence and servicing capabilities, they must improve their staffing and operational practices to maintain competitiveness.
By leveraging outsourcing and automation, firms can achieve those very goals.
Outsourcing providers give firms quicker and easier access to the trained talent they need, without worrying about COVID-19 and travel restrictions affecting recruiting and hiring internally.
And by implementing RPA, businesses can get the work done faster and with fewer errors.
Collectively, outsourcing and automation can help drive down costs while improving the quality of work.
There is a lot of opportunity for GCC banks and money managers to improve, and Empaxis is glad to help.