Habib Bank’s New CEO M. Aurangzeb Is Focused On FinTech And Branchless Banking

Habib Bank introduced FinTech and Branchless Banking
Courtesy: The Express Tribune

Habib Bank is Pakistan’s largest bank and it is now moving towards branchless banking and investing in the development of technology-based infrastructure. In 2017, Habib Bank hit a snag when the New York State Department of Financial Services (NYSDFS) accused it of not being able to prevent money laundering due to a shortage of resources. This accusation led to a state regulator who was determined to put an end to financial malfeasance, ensuring that Habib Bank was forced out of the United States of America. This in turn, negatively affected the bank’s earnings as it had to pay two hundred and twenty-five million dollars as the fine settlement. As a ripple effect and to prevent further damage, the CEO at that point, Nauman Dar, was removed. The new CEO of Habib Bank Muhammad Aurangzeb is more focused on IT to protect the privacy of the customer and promote the concept of branchless banking by improving the concept of FinTech!

Habib Bank introduced FinTech and Branchless Banking
Courtesy: Bahrain Association of Banks

With the position of the CEO of Pakistan’s largest bank vacant, all eyes were on the person who would take charge. Nauman Dar was succeeded by Muhammad Aurangzeb on the 30th of April 2018. Aurangzeb, a veteran global corporate banker has tried to spruce things up since he came. Many say that this is because of his tremendous experience of the banking sector in East Asia.

Who Is Muhammad Aurangzeb?

Muhammad Aurangzeb did his Bachelors and MBA from Wharton School at the University of Pennsylvania. His career kicked off with a job at Citibank in Pakistan. He then moved to Citi in the USA, only to return to Pakistan and join the then famous bank ABN Amro. ABM Amro gave his career a great boost, and he became the Country Manager. Having no further growth opportunities at ABN Amro since he had hit the ceiling, Aurangzeb joined a Dutch Bank that was headquartered in Amsterdam.

Habib Bank introduced FinTech and Branchless Banking
Courtesy: Geo TV

In 2007, the Royal Bank of Scotland acquired ABN Amro and Aurangzeb was hired to lead the Royal Bank of Scotland’s Southeast Asia team. His next big break came when he joined JPMorgan, an American banking giant. He worked for JPMorgan in Singapore in the corporate banking division and headed the Asia Pacific corporate banking business of JPMorgan. His next career jump made him the CEO of Habib Bank in Pakistan.

How Is His Ideology Different?

Aurangzeb is working very differently from his predecessors. His approach and tone is very unique as he is abandoning the traditional banking methods and gearing up to move to tech-savvy techniques also known as the FinTech approach. He has definitely realized the importance of a well-integrated IT and ICT system in making work easier, efficient and faster. In October 2018, he gave an interview to Bloomberg that garnered a lot of attention and anticipation in Pakistan. He said,

“From my perspective, we have to start thinking that we’re an IT company with a banking license.”

This unexpected statement made him stand out of the crowd as for the CEO’s of most Pakistan Banks, technology, IT and ICT are not very important but Aurangzeb was planning to invest in technology that will improve the consumer financial market.

Aurangzeb didn’t just put a unique and much need plan forward, his claims were backed by hardcore statistics, which made it hard to disagree with his style of leadership and revolution. Muhammad Aurangzeb explained that HBL has 1 million new customers a month considering it has 1700 branches and 2000 ATM’s spread all across Pakistan. He added that with making biometric devices available and accessible the numbers will definitely double or better yet may even triple. Aurangzeb made it very clear that for a bank to survive and flourish in this fast-paced 21st century, FinTech sector needs to be aided by technology that will drive consumer behavior and augment conversion of customers and thus profits.

How Will The Conversion From Traditional Banking To Tech-Savvy Banking Work?

When traditional banking is moved towards a modern, technology integrated banking, branchless banking is one of the key areas of focus. Branchless banking when simply defined is “converging operational activities with mobile technology and user-friendly interfaces that will fulfill customer needs in the most efficient manner”. Most customers prefer to deal in cash since it is an easy medium, but from a banks perspective, setting up ATM machines is more costly as compared to establishing strong connections with stores and shops in different neighborhoods throughout Pakistan.

Konnect – A New FinTech Approach Of Habib Bank

Konnect is the platform HBL’s branchless banking will be established on. There are approximately 32,000 agents across Pakistan who serve over 900,000 customers and so HBL is estimating that this number will multiply manifolds in the short span of a year as over 3 million new customers will come on board as the conversion to branchless banking materializes.

Habib Bank introduced FinTech and Branchless Banking
Courtesy: Google Play

Previously Habib Bank’s mobile app and the bank’s website were extremely different and both required different usernames and passwords to log in. It was annoying for clients as they have to remember the separate usernames and passwords for one account.  In October 2018, under the leadership of Muhammad Aurangzeb, this practice was changed and now have a well synced and integrated web and mobile browser-based system. With improving its services and getting technologically advanced, Habib Bank may soon replace Standard Chartered as the leading online Bank in Pakistan.

The Journey Of Change!

To start off on this journey of branchless banking, HBL hired Abrar Ahmed Mir as the first Chief Innovation & Financial Inclusion Officer. This was the first hire of its kind for any bank in Pakistan. Many such hiring will follow. The finance and consumer markets are displaying a favorable response to this change in Habib Bank’s approach, however, this transition will not be easy.

Since Habib Bank has Pakistan’s largest banking network, materializing this ideological revolution will prove to be a mammoth task.