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The priority for virtually every bank in the region — and globally — is digital transformation, especially as central banks make it a point to implement incentives and requirements for digital banking, with some even working on introducing digital currencies.
But corporate banking has seen a slower shift in the digital transition. The complexities of business banking and trade finance — along with the urgency of cybersecurity, the bureaucratic nature of some documentation processes, and a lot of other hurdles — have meant that corporate banking has been on a less radical path towards digitization and innovation.
But that’s quickly changing. Our friends at Mashreq are among several banks introducing digital corporate banking and trade financing solutions — and they’ve managed to create one of the most comprehensive and advanced platforms — with open banking capabilities — that we’ve heard of in the region to date, with a very ambitious rollout plan. The full Neo Corp proposition — which includes cash management and the trade finance module — was first rolled out in Bahrain in September, then to Kuwait and Qatar in the past couple of months. Next up: The bank wants to make the platform global, and to make it smarter with AI.
Talking to us about Mashreq’s answer to the digitization of corporate banking, open banking, and the wider vision for the platform over the coming years is Victor Penna (LinkedIn), global head of transactional banking at Mashreq.
E: First thing’s first, explain how the Neo Corp platform works. What can businesses use the platform for?
VP: On the payments side, the platform supports all the common payments businesses do, whether it be salaries, domestic electronic payments, cross-border electronic payments, etc. Most people have digital platforms that can do that.
Where this platform’s a little bit different is the ease of use. Something as simple as typing a SWIFT code for a bank and having the rest of the information populate for you — you see that on retail platforms, but you don’t often see it on corporate platforms. We’ve tried to bring a lot of those retail concepts to this platform. You could save favorites just like you can on a retail platform. You can build templates and reuse them.
From an informational point of view too, we’ve built a nice dashboard so that you can see what balances you hold with the bank. It gives you a breakdown of your top five accounts, all on the same page, and gives you different action buttons, so if you need to approve some payments, it’s right there. It also has work queues at the bottom. All of that is available on one page. The concept is that you should be able to do more than 80% of the things that you would want to do with just one click.
People have this traditional internet design philosophy of a maximum of three clicks for functionality, but our philosophy is let’s try and do it in one click to make it really easy.
E: And on the trade side?
VP: This is where we’ve really revolutionized the process, because most banks are still largely manual when it comes to trade. What we’ve done is we’ve digitized almost everything and automated a lot of the drudgery associated with those processes.
When applying for a letter of credit, for example, we’ve built a library of standard clauses and terms that typically go into a letter of credit to allow clients to access those most common terms and conditions that would go into the L/C. Even when you need to attach additional documents, like ins. coverage, if you have a policy with us at the bank, we have that in our systems, and you can just cut and paste that from the system. There’s also built-in calculations to see how much things will cost you before you send it.
If you need to send a draft copy to your supplier, what typically happens with most banks is you send them the information, they’ll then prepare a draft in SWIFT format, and then you send it to your supplier. This process can take up to two days. What we do is allow the individual to generate the draft copy in that format so they can send it to the supplier instantly.
Even when settling an L/C, we’ve digitized the process so you can then roll it automatically into a trust receipt loan, or an import loan. We allow you to also settle the loan from your different accounts through a split settlement option, so we’ve automated and digitized every single step of the process. Bank documents can also be scanned, uploaded and sent via the platform.
If the bank has a question or something’s missing, all the interaction happens on the platform, and it’s directly between our operations team and the client, so that really is quite a radical shift from the way most banks operate.
E: You rolled out the full Neo Corp suite in Bahrain three months ago now. How has it been received?
VP: Because the platform is very user friendly, the reception has been really good. A lot of clients immediately following our launch came up to us and asked for meetings, demos, and wanted to discuss more things we can do together.
The web channel is only one way of accessing this digital infrastructure we’ve built for trade finance and cash management for businesses — we’re also launching a mobile app shortly. It’s also available via host-to-host, which involves direct connectivity between the systems, as well as APIs — application programming interfaces — that support real-time information and transaction execution.
A lot of clients came up to us after we discussed the APIs with them, and they were very interested to talk about it. Bahrain is quite an advanced market, so people were not just interested in the platform and the fact that you get lots of great information, but they’re also interested in that direct connectivity.
They want to know if they can use these APIs, not just to do business with Mashreq, but — because they love the dashboards we’ve created — to use it to aggregate information from other banks as well. So not only did they find the platform useful, they also want to use it for multi-banking.
E: Is that something you’re open to — providing APIs for multi-banking purposes? And what types of APIs do you currently have on deck?
VP: We’re about to launch an upgraded API gateway that will have a catalog of APIs for things like instant payments, retrieving real time account balances, and receiving notifications of debit credits hitting your account, plus other bespoke APIs that support specific functions. One of the APIs we’ve created allows corporate ERP systems to fetch virtual accounts and use those in the accounts receivables process to support reconciliation, system-to-system. We’ve launched that in the UAE, and we’re evaluating launching it in certain GCC countries as well.
Bahrain has an open banking framework that will go live for corporates in 1Q or 2Q 2025, and we’re keen to participate in that and use our API capabilities to enable clients to access information across multiple banking relationships and, potentially, to execute transactions on accounts held at multiple banks through Mashreq’s platform. In that way, Neo Corp evolves to become a sort of Treasury Management System (TMS) lite.
E: How many clients have you onboarded onto the system so far? And how many do you expect to onboard by the end of the year?
VP: What I can tell you is that across our footprint in the UAE and the Gulf, we will be onboarding thousands of clients. We will ramp that up progressively, and we should reach about a third of our client base by the end of the year, roughly. Our objective is to have everybody on the platform for both cash and trade by the middle of next year.
E: What’s the plan for the rollout across the GCC? Which countries are getting the platform next?
We’ve rolled out cash management in waves, in the UAE, Bahrain, Kuwait, Qatar and Egypt. We will then be rolling out trade, which we’ve rolled out in Bahrain, Qatar, and Kuwait, most recently. The plan is to launch it in Egypt early next year, and then in the UAE. We also hope to bring it to Oman next year.
We’re also extending this to our international network. We’ll be extending it to our international locations, including the UK, Hong Kong, and New York. It will ultimately become a global platform.
E: Are there any nuances across those markets that you have to keep in mind with those launches? Localization that needs to happen?
VP: With trade, a lot of the documentation and process is standard global practice so you don’t get much variation there.
On the payment side, however, there are different clearing systems and specialized local payment systems for things like local utility or tax and customs payment systems, so we have to connect to those as we go along. We already connected to some and we’ll connect to others as we complete the build over the next year.
Then there’s the difference in the level of connectivity to open banking. We’re trying to build a common foundation — think of it as plugs — that can easily be plugged into different open banking systems.
E: What are some additional features or functionalities you’re looking to introduce down the line?
VP: Neo Corp is set to become the wholesale banking platform for the bank. We’re currently evaluating a transactional FX service that we can add, and we will add a lot of self-servicing to the platform as well. A lot of the things that clients dread, like for example, enrolling a legal entity, completing their KYC, managing their users, and requesting documents from the bank — all of that should become migrated to the platform directly over the course of the coming year.
We are also experimenting with AI quite a bit, and we’re looking to introduce an AI assistant to Neo Corp sometime next year, which you can get to perform certain tasks for you.
The other thing we’re looking at, ultimately, is building a range of persona-based dashboards, and tailoring different dashboards to different types of users. If you’re a CFO, you’ll get a CFO’s view of the world, which focuses on your liquidity, your exposures, etc. If you’re a collection specialist, then you’ll get a collections view.
Over time, we will get more into the data analytics side of things. We are looking, for example, at providing data as part of the offering so that you can go in and see all of your transactional information and sort and report on that in a way which is relevant to you. Ultimately, there’s an opportunity to get AI to run some scenarios for you and look at trends and analytics. We’re not there yet with that, but we’re definitely thinking about it as the next phase of our evolution.
Another area where we will do a lot of work going forward is using our API stack to build industry-specific solutions. We’re seeing demand among certain industries that have their own unique workflow, and require their own set of regulatory approvals, and that is currently a very paper-based process. We want to connect directly into some of those systems that can allow the API to fetch those regulatory approvals, match them in the payment queue, and release the payment accordingly. This will allow us to integrate with regulators, as well as with the banks and even their third-party system providers.
