Interview: National Bonds CCO Mohammad Bitar
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Interview: National Bonds CCO Mohammad Bitar

Interview: National Bonds CCO Mohammad Bitar

National Bonds’ chief commercial officer, Mohammad Bitar, explains how the company has grown in recent years and why the UAE’s savings environment is changing

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How would you assess the past year for National Bonds? What have been the major successes and and challenges?

“This year has been a strong year for National Bonds with significant growth witnessed in our core business. In 2016, the company recorded a 75 per cent increase in its regular savers in the UAE compared to previous years, clearly reflecting the growing confidence in our popular Shariah-compliant savings and investment scheme. Since January 2017, we have witnessed a 27 per cent increase in the number of applications for monthly saving plans compared to the same time period last year. In 2016, we registered a total of 17,474 applicants and in 2017 this figure increased by 4,718, totalling 22,192 applications to date.

“Our strong performance so far in 2017 highlights that there is a strong appetite for savings. However, our biggest challenge remains to be that most people cast aside their original savings plans – with the best intentions – once they settle into life in the UAE. It is for this reason we are working hard to raise awareness of the importance of financial planning and savings for all sections of society. From our market research, we know people want to save but struggle to put a plan in place.

“We are passionate about helping people meet their financial goals and we believe in raising awareness of the importance of savings today, for a better tomorrow.”

The Middle Eastern region has endured some difficult economic headwinds in recent years – how has that affected the company, and savings in general?

“While I cannot say for certain whether or not there is a direct correlation between UAE saving habits and the economic environment, our research has found that saving is increasingly becoming a key concern for UAE residents, with many finding it harder to save than ever before.

“Over the years, we have witnessed an increase in the number of savings – highlighted in our 2016 savings index. The National Bonds Index found 91 per cent of regular savers saved monthly in 2016, marking a 4 per cent increase from 2015. Furthermore, 86 per cent of UAE residents do not believe they are saving enough, while 64 per cent of respondents planned to save more in 2017. In terms of the saving environment, however, fewer participants felt that 2016 was a good year to save, in comparison to 2015.

“So what does this data tell us? The UAE has historically lacked a savings culture among its residents – particularly among millennials – but since the financial crisis we have seen an increase in an awareness of the importance of saving and money management.”

How has the savings culture in the UAE changed since National Bonds was launched in 2006?

“The savings culture in the UAE has come a long way since we opened our doors in 2006. The concept of savings has been widely adopted through the years and we are continuously seeing positive changes throughout the region. We have seen a rise in savers since 2006 with the vast majority of people understanding the importance of saving money through a structured scheme, especially during economic downturns.

“Money management is fast becoming an integral part of the UAE educational system, particularly since the Government encouraged companies like ours to embark on a range of nationwide financial literacy campaigns to encourage more residents to save.

“At National Bonds we are passionate about educating the next generation on the importance of financial planning – it is our mission to help create a new generation of financially-savvy individuals.”

Islamic finance and Shariah compliant financial products have become much more sophisticated in recent years. What has driven this development, and why are increasing numbers of people drawn to it?

“Islamic finance has become popular in recent years and has become a rapidly expanding part of the global system. The reason for its success? Demand. Islam is one of the world’s fastest growing religions and, unsurprisingly, a large portion of Muslims want to invest in financial products that do not compromise their religious beliefs.

“Take for example Islamic takaful, a concept based on solidary cooperation and mutuality, created to compliment the teachings of Islam. This was the motivation behind ‘Sanadi’, a takaful-based savings programme that provides Shariah compliant insurance cover to customers. Sanadi, our integrated saving and insurance programme, is based on Shariah principles and is accessible to everyone, does not give priority to returns and helps us achieve a stable and secure society through investing the shareholders’ money in projects that enhance social development.

“It is my view, in order to ensure the continued success of Shariah products, we must engage economists, sociologists, scholars and development experts on takaful and the Islamic economy more generally to help raise awareness of the wider benefits to economic development.”

Your annual Savings Index is a barometer of the savings landscape in the UAE. What have been the main changes to the industry in recent years, and do you expect the 2017 Index to produce any shock findings?

“Our UAE savings index for 2016 covers a variety of saving habits in the UAE. The results are based on a number of UAE residents, who made up for 35 per cent of surveyed participants across the GCC.

When it came to savings, 64 per cent of regular savers planned to increase their savings in the near future, while a slightly higher number – 68 per cent – are thinking about saving. Some 49 per cent of the group could foresee stability in their financial future and only 45 per cent of the participants felt positive when it came to expecting an increased income. The results also show that saving is becoming a topic that people are thinking about and a secured financial future is a priority for the majority of people.

“We fully expect to see these findings in our 2017 survey, with a higher percentage of participants showing interest in financial planning, with financial security becoming a key area of concern for UAE residents. As I have mentioned, the turbulent global economy and political events including Brexit, are likely to play a key role in savings habits of many UAE residents.”

How much of an impact is new technology having on the company? Are fintech and other smart technologies making a difference to you and the wider industry?

“Financial technology is revolutionising the financial services industry. Technology is helping financial institutions provide services that are easy, quick and tailored to personal needs to make decision making easier than before.
“As a business, we understand the need to adopt technology to not only benefit our business, but also our customers. We launched our new website in early 2017 which allows our customers access to various products and we are getting ready to launch a mobile application.

“Recently, we also signed a partnership deal with MySky Telecom Group, the premier digital enabler of communication service providers and the consumer technologies sector in the UAE. The three-year partnership offers National Bonds customers the option of making online payments and purchasing sukuk (bond certificates) through MySky’s portal, point-of-sale machines, and mobile application.”

What can we expect from National Bonds in the coming months and years? What growth and development plans does the company have on the horizon?

“National Bonds will continue to raise awareness on the importance of savings. Through our various products, we will continue to tailor our services to society’s need and continue to push financial literacy both online and offline.

“It is our job to address the fact that we live in a country where savings is still a relatively new concept. This is primarily because it has never been a top priority for families here. Aspirational lifestyles are often promoted as highly desirable, which often puts all thoughts of savings to the back burner.

“National Bonds’ goal is to continue to change this mind-set and prepare all families and individuals for unexpected expenses or life events.”

What are the company’s most popular products and services?

“We cater to all aspects of savings and have designed services to suit individual needs and goals.

“MyPlan is a highly customised savings plan offered by National Bonds to all customers through a regular saving mandate either through direct debit instructions, payroll deduction or standing instructions to the bank where customers can allocate/save a predetermined amount into their National Bonds account.

“The programme recorded a strong uptake among UAE nationals in 2016. The number of Emirati minors enrolled in the programme surged by an astounding 99 per cent in comparison with 2015, while the number of Emirati women grew by 80 per cent and the number of their male compatriots rose by 78 per cent. The numbers of expat regular savers also witnessed a significant increase compared to 2015 – minors by 95 per cent, men by 88 per cent and women by 74 per cent.

“We have recently launched ‘Sukuk Express’ which enables customers to deposit up to Dhs20,000 daily in their National Bonds accounts through self-service machines. This has proved hugely popular as the deposits can be made using quick payment machines that have been installed across the country. Some 1,000 self-service machines have been installed throughout the UAE and have been designed and installed by MBME (The Cube).

“Our monthly savings plan is a strong hit as customers are entitled to entry in all the draws, with one chance per bond.”


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