Emirates NBD launches digital-only bank for millennials



Emirates NBD has launched a digital-only bank aimed at millennial customers.

The bank, known as Liv., will target younger customers through an app on their smartphone that will provide a series of services including personalised deal offers through partners, more user-friendly statements offering details on how much is being spent on things like groceries, food and clothes, and the ability to instantly send money (or even pay utility bills) to friends who also use the service.

Other functions included in the app include a fitness tracker that will be linked to offers, a geolocation service that will provide exclusive offers to customers based on their location, and an ability to transfer funds through social media accounts such as Facebook and WhatsApp.

“We are very proud to launch the first digital lifestyle bank in the UAE. We have been working on this project for more than a year – almost a year and a half,” said Ali Sajwani, the chief information officer of Emirates NBD.

Research presented at the launch stated that the number of millennials in the UAE is set to rise to 3 million by 2020 – up from 2 million in 2014. It added that millennial spending in the UAE is estimated to be worth Dh73.5 billion to Dh88.2bn. A beta version of Liv. for “sel­ected customers” will be available from Sunday. It will initially only be available in the Google Play store, but Jayash Patel, the head of Liv., said that a launch across all platforms will be rolled out within “a matter of weeks”.

It said the sign-up process has been created to be as easy as possible, merely through a Facebook sign-in and a scan of a customer’s Emirates ID card. A debit card will then be dispatched by courier, with verification being carried out at handover through both a swipe of the Emirates ID card and a bio­metric fingerprint reading.

Emirates NBD also plans to develop the Liv. brand internationally, with Saudi Arabia and Egypt two obvious targets given the fact that it has existing operations in both countries.

However, Mr Patel said that it was too early to say when operations could be extended to other markets, as this would be subject to securing agreements with local regulators.

“If you look at the region, the population is perfect for such a solution. So we’re going to experiment, learn and grow the business here and then go to other markets,” he said.

The bank commissioned New York-based advertising agency R/GA to work on the launch of the new bank’s brand.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”