- Greater financial inclusion and newer opportunities need of the moment
- Meezan Bank taking lead in e-commerce development in the country
Interview with Mr. Irfan Siddiqui — President and CEO, Meezan Bank Limited
PAGE: Tell me something Meezan Bank, please:
Irfan Siddiqui: Meezan Bank is the first and largest Islamic bank of Pakistan and Alhamdulillah has witnessed an average of 40-50% growth in the size of its branch network each year ever since its inception; beginning with four branches in 2002 to reaching a nationwide network of 835 full-fledged commercial banking branches today. Out of the 36 commercial banks in the country today, Meezan Bank is now ranked amongst the “Big Five” banks of Pakistan in terms of size, the first new entrant in this category since the 1960’s. The Bank’s entity ratings have recently been upgraded to the highest possible level of AAA, by VIS Credit Rating Company Limited. The medium to long-term rating of AAA rating denotes the highest possible credit quality, with negligible risk factors, being only slightly more than for risk-free debt of the Government of Pakistan. The short term rating of A-1+ denotes highest certainty of timely payment, liquidity factors are outstanding and safety is just below risk-free short-term obligations of GoP. VIS has also upgraded ratings of the outstanding Basel 3 Compliant Tier 1 and Tier 2 Sukuk of MEBL at AA (Double A) and AA+ (Double A Plus) respectively. Outlook on the assigned ratings is stable. The previous rating action on the entity was announced on June 30, 2020.
Meezan Bank has always worked with the Vision of establishing ‘Islamic banking as banking of first choice…’. Keeping true to this Vision, we have never consciously tried to differentiate ourselves from the Islamic banking industry. We believe that Islamic banking offers a distinct customer centric value proposition and underlying these operations are the attributes of complete transparency. When it comes to competition, we believe in giving our best to the utmost extent regardless of how others are performing. We tend to focus on bringing the best out of ourselves and put our own standards in the view as our competition. Our aim and wish is that the Islamic finance market in the country should grow.
PAGE: How has the digitalization helped the banking services?
Irfan Siddiqui: Digitalization is a continuous process that is leading to a paradigm shift on the financial services. At the customer level, digitalization has also changed demands as our customers become increasingly used to digital processes. So what we are looking at now, is the importance of data. Having said that, at the banking level, digitalization aims to make banking more convenient for the masses. We are trying to bring customers to adapt to digital transactions. At Meezan Bank, our focus has been to identify opportunities to make Islamic banking more accessible, optimize products and services and to automate solutions in order to offer Shariah-compliant and competitive products to our customers. One of the most significant impacts of digitalization was seen during COVID-19 in Pakistan. The user base on digital channels has grown significantly since the lockdown. Mobile Banking usage for financial transactions including funds transfer and bill payments has increased significantly on week to week basis. This is an unprecedented growth level, never seen before. As per a recent study published by 1Link, the country witnessed 4.5 times increase in digital transfers. Alhamdulillah, Meezan Bank, witnessed an increase in digital transfers by 6 times – outpacing the industry’s growth, which indicates the trust our customers have shown in our digital capabilities. Not only in terms of digital transfers, but the impact has also been profound on bill payments. We are seeing more and more customers switch to online modes of bill payments. Compared to just a few months back, we are growing our billers portfolio by leaps and bounds to meet the surge in demand from our customers. From school fee payments, to mobile top-ups to club memberships, the ease and convenience offered is like none offered before. Currently, Meezan Bank offers over 1000 billing options to its customers over its Mobile App and Internet Banking Channels and the numbers will only keep increasing with time. Lastly, we are seeing a tremendous impact on e-commerce. From card payments to wallet payments and now account based payments, digitalization in Pakistan has brought a massive boom to the e-commerce sector. Taking our efforts to bring greater convenience to our customers a step forward, there is now also a growing demand for digital only account opening. Presently, this is a service offered only in a few countries due to various regulatory limitations. However, with its introduction in Pakistan, this service promises to be a game changer and has the potential to aid financial inclusion in Pakistan and bring a greater number of individuals into the banking net.
PAGE: Is our banking sector keeping pace with the banking sector of the developed world?
Irfan Siddiqui:Â Yes. The Banking sector in Pakistan is keeping pace and offering services and products at par with those offered in any other part of the world. We do face challenges pertaining to adoption and infrastructure development, however, these are bigger issues that need to be handled at State level. Banks are no longer soiled in how they operate. With growing demand for flexibility, convenience and security, banks in Pakistan are investing in data driven services, enhanced security infrastructures as well as integration with more than one channel for a seamless experience. Consumer demand and adoption of technology is making the banking industry strengthen its technological backbone, streamline its processes and more importantly pay more attention to consumer trends and preferences.
PAGE: Kindly compare the banking services of the past with the services being offered in 2021?
Irfan Siddiqui: Banking services of the year 2021 are data driven. It is customers’ demands that drive these services. This is coupled with the way technology is changing the way businesses operate and the way products and services are delivered to various markets. For the financial sector, this change has been rapid and profound, forcing banks to keep up with advancements for a more improved user experience. In fact, user experience now forms the driving force in banking. We are now looking at providing our customers with seamless and intuitive experiences and services wherever, whenever and however they want. Personalized financing, more convenient access to banking platforms, instant online transfers, bill transfers, are innovative solutions that have created a win-win for both the customer and the Bank. Now banking services are not only reliable and safe but also agile and faster. With internet and smartphone penetration reaching even more far flung areas of the country, we are aiming for greater financial inclusion and newer opportunities. Now, banks are even changing the way they on-boarding customers to meet individual requirements, offering them greater convenience and ease. With time, banking products and services shall be designed to be embedded seamlessly into customers’ daily life.