Interview of the Month

Dr B R Shetty Managing Director & CEO UAE Exchange

Dr B R Shetty founded the New Medical Centre (NMC)in 1973 and is instrumental in its growth into the health conglomerate it is today. He holds a degree in Clinical Pharmacy. His clinic provides cutting edge diagnostic facilities and is also ISO certified. The stateof- the-art NMC Specialty Hospital, Dubai is the latest addition to the NMC healthcare network.

With his legendary foresight and vision, Dr. Shetty saw an opportunity in financial remittances in UAE where majority of the expatriate population sent their hard earned money back home. UAE Exchange is one of the largest financial institutions in the Middle East, offering money exchange and remittance services across the globe. It has more than 250 offices and 115 correspondent bankers worldwide and outward remittances of nearly $8 million per day. UAE Exchange Wallet follows the latest technology of providing secure money transfers globally through mobile phones.

Dr Shetty is the founder and Patron of Indian Pharmaceutical Forum in the Emirates. Dr Shetty has also been successful in other businesses he ventured into, namely pharmaceuticals, FMCG, medical/scientific equipment, information technology, hospitality, real estate, etc. He is now focusing on introducing new technologies in the fields of Nanotechnology, Bio- Technology and Cell-Therapy and Tissue Culture.

Dr Shetty's clear vision and focus, indefatigable spirit and enthusiasm has fetched him many awards and won him accolades for his contributions to both business and charity. He is conferred the highest honour by the Govt. of Abu Dhabi - 'Order of Abu Dhabi', for his outstanding contribution in the development of the Emirates. He is also conferred with the highest NRI Award Pravasi Bharthiya Samman Award by the President of India, Dr APJ Abdul Kalam.

About UAE Exchange

UAE Exchange was established in 1980 in Abu Dhabi and has been a pioneer in setting new standards in the global remittance industry.

UAE Exchange is an ISO certified company and has won various global business excellence and quality awards. It has been awarded the prestigious Dubai Quality Appreciation Program of the Dubai Quality Group, based on the European Foundation for Quality Management model. It is also the recipient of the Mohammed bin Rashid Al Maktoum Business Award, based on Business High Performance model.

UAE Exchange aims at 100% customer satisfaction, and focuses on religiously follows its 3P approach - People, Product and Process. The vision set by its founders - His Excellency Abdulla Humaid Ali Al Mazroei, and Dr. B. R. Shetty - guides UAE Exchange in its pursuit of excellence in all areas of operation.

The seamless integration of operations using quality systems such as 5 S and Six Sigma, bring absolute control to endto- end processes. Various proactive processes such as SMS intimation and dynamic customer enquiry systems are the valueadded services provided by the company.

UAE Exchange is a prominent member of the NMC Group - one of the leading business conglomerates in Abu Dhabi, UAE, having diverse activities spread across the world. NMC Group's interests range from financial services to trading in pharmaceuticals, FMCG brands, scientific, laboratory, education and medical supplies, foodstuff, retail pharmacies, gold and diamond jewellery, advertising, hospitality, real estate, information technology, engineering and financial services.

Interview- UAE Exchange
Questionnaire

Q.1. Please share your experience in the money transfer industry, particularly in the growing Middle East and UAE markets?

Money transfer is an interesting area. While it has all the strategic approaches and uncertainties similar to banking or finance, it is much closer to the lives of the working population in the UAE and the Middle East. The reason is that a large chunk of the population comprises of the blue-collar migrant workers who send money regularly to their families back home. These workers cannot afford to have bank savings, and hence are not conversant with the banking systems. Over the years, I have witnessed the remittance industry transform into a highly organised sector with increasing scope of operations, improving technological innovations, and expanding customer base. UAE Exchange, as a key player, has always been at the forefront of this transformation.

Q.2.What kind of growth the company has achieved over the last few years? What strategies is it adopting to stimulate growth and increase its market share?

Over the years, UAE Exchange has registered double-digit growth in all facets of its business, including a 25% growth in profits in 2007. From being a regional player, the company has strategically expanded its operations across the world, and is currently present in 17 countries. In UAE, UAE Exchange is clearly the market leader that stays way ahead of competition, courtesy the largest network and superior product offerings. Success in a people's business such as ours largely depends on the goodwill of a brand. So, our strategies are developed around the objective of offering the best value to the customers. And we have built capable teams all over the world to achieve this simple objective. This approach has always helped us grow uninterrupted. In short, our key focus is on offering the best value to the people through the best teams.

Q.3. Whom do you consider your main competitors, existing and potential? Do you expect the money transfer/remi t tances market growth to outperform financial services/banks in the short to medium term?

Competition is rife, and the struggle is getting intense by the day. With more and more people moving across the globe in search of commerce and career, the prospects for this industry are only looking brighter. Our competition is only regional, as no other exchange house has a global network as extensive as ours. In certain segments such as Instant Money Transfers, we are competing against the global brands. I think, the money transfer industry cannot be compared with banking per se, as they cater to different income segments and are almost exclusive in their areas of operations. Though the banks deal with money transfer, for them it is a value-added service offered to their banking customers, and not a mainstream activity.

Q.4. How does the company expect the global money transfer industry to grow and evolve over the next five years? What is the current pricing environment and what are the trends in the market?

Going ahead, the global money transfer industry would continue to grow and evolve. There would also be continuous upgrading in technology. There would be growth in all the segments, including instant money transfers, with focus on flexible payout solutions. Another area of interest would be the online money transfer. The current pricing environment levies legitimate charges on the customer while offering adequate margins for business. A healthy environment is maintained across the industry, sans a few instances of price under-cutting.

Q.5. Which are the markets driving industry growth? How do you plan to capture these markets? Which segments is the company planning to focus on in future?

The major markets are those which have a sizeable presence of expatriate population. Asian expats contribute a significant share of the global remittance, as they form one of the major glob-trotting communities. UAE Exchange has forayed into various markets based on the detailed analysis of the potential and trends. Among the various product categories, fast-paced money transfers are gaining ground. We plan to focus on card-based remittance products which is another area holding good demand potential.

Q.6. How is the advent of e-transfer and mobile money transfer going to change the shape of the industry, in terms of margins, services and competition? What is your view on the strong growth in the Asian region?

As I look at it, e-transfers and mobile money transfers would elevate the remittance industry to a higher platform, bringing about greater convenience and higher margins. Though a brick and mortar model cannot be replaced, e-transfers and mobile transfers would help cut down conventional overheads, thus improving margins and competition. This growth should be mostly discernible in Asia.

Q.7. How soon do you expect global card/electronic solutions to replace conventional money transfers (cash transfers)?

Though card/electronic solutions would gain ground, and become popular over the years, it may not be able to replace conventional money transfers altogether. This is so because a major chunk of expats, mostly engaged in blue-collar jobs, would continue with cash transfers. In another five years, electronic solutions are expected to consolidate the market.

Q.8. Which are the areas that require more attention from the authorities – central banks and governments – in order to make transfer and delivery of remittances across borders more efficient and secure?

Various authorities and governments have already embarked on system and procedural controls to ensure the security and efficiency of money transfers. Such initiatives are leading the industry in the right direction. Today, the industry is well supported by agencies and governments, and the confidence that they have on the industry players helps the industry adopt the best practices to ensure a secure and efficient environment.

Q.9. What will be the impact of the stringent laws being introduced in the Middle East to stop illegal money transfer? How will it help to formalize all channels of money transfer?

There is a noticeable shift from unorganised money transfer practices to organi sed methods fol lowing new legislations that have been enacted in the Middle East and elsewhere. This generally helps curb misuse and misrepresentation, and fosters a secure environment for remittances. The accountability of the customer who sends money has been ensured through various practices, which have been prescribed by the government, and developed by the companies themselves. Unorganised money transfer practices would continue, but on a much lower scale.

Q.10. How are customer requirements changing? In your view, which factors will prove crucial for attracting and retaining clients?

There is a palpable shift in customer demands. The customers today want fast crediting and minimised cycle time of money transfers. Instant money transfers have therefore registered good growth as people preferred this service to send money faster. There is a good potential for electronic money transfers and card-based products. The customer demands pace, convenience and economy with regard to money transfers. These indeed are the factors that would be crucial for growth and success in attracting and retaining customers.

Q.11. With regard to increasing concerns over personal data security and consumer rights issues, how is the industry coping wi th such chal lenges? What measures is the company taking to ensure protection of personal data and consumer rights?

Personal data is collected from customers only as per the stipulations put in place by various watch-dog agencies and governments, and these are not used for any business purposes what so ever. Communications are sent to customers to educate them about the methodology and need for data collection in a way that does not affect their rights as customers. UAE Exchange has employed home-grown software systems, which ensure total security of customer information.

Q.12. What measures can be adopted by the industry to mitigate the impact of the current adverse development s in the global economy, eg global economic slowdown, rising cost of living and currency movements?

The best way to help the industry remain on course even during economic adversities is to refrain from bad practices and unhealthy competition among the industry players. This will ensure that the customer gets the legitimate freedom to choose the best method of sending money without uncertainties or extra cost burden.