National Bank of Oman: Redefining Private Banking in the Middle East

National Bank of Oman (NBO), founded in 1973, is the first local commercial bank in the Sultanate of Oman. Today, it is one of the leading banks in Oman. The Bank’s wealth management and private banking proposition, known as ‘Sadara’, is designed to meet the banking and investment needs of its high net worth clients by offering customised solutions and personalised services.

Responding to the increasing demand for exclusive banking services across the Sultanate, NBO has continued to expand and enhance its product offerings, especially its digital capabilities. Recently, NBO became the first local bank to launch Yield Enhancement Structured Products and Systematic Investment Plan (SIP) focused on the global financial markets to help customers streamline their investments and create wealth to meet their long-term financial goals.

For these notable achievements, it is only fitting that National Bank of Oman was declared Highly Acclaimed for the Best Private Bank – Middle East Award at the Global Private Banking Innovation Awards 2020 (GPB 2020), organised by The Digital Banker.

When it comes to areas such as Family Office Services, Discretionary Services, Fixed Income, ESG, Structured Investments, Islamic Finance and more, the Global Private Banking Innovation Awards 2020 (GPB 2020) organised by The Digital Banker sets the standard. Known as the world’s most prestigious and transparently judged private wealth awards, GPB Awards always distinguishes the world’s best of the best.

This year’s select panel of judges include industry experts from companies such as Forrester, Protiviti and EY. Previous year’s judges include PwC, KPMG, and Fuji Xerox.

“NBO offers a wide range of products and solutions to help them meet their client’s life goals. It has core products portfolio, focused primarily on long-term strategic asset allocation, for its clients consisting of Mutual Funds and Fixed Income Securities. It also offers market first “Yield Enhancement Structured Products” and “Systematic Investment Plan”, a goal-based savings plan with avenues to invest systematically into the global financial markets. Surely, saying that NBO is redefining private banking in the Middle East is an understatement,” said Nirav Patel, Managing Director at The Digital Banker, the organiser of the Global Private Banking Innovation Awards during the awards presentation.

Sadara Wealth Management

NBO’s Sadara Wealth Management offers a higher level of service in every aspect of banking. Its personalised products provide customers with better ways to build and manage their wealth by providing dedicated relationship managers that save clients’ time by servicing all their financial needs under one roof. This is evidenced by the strong growth of this segment in terms of deposits, investment revenues and new-to-bank customers in the last 4 years.

Sadara Wealth Management maintains a distinctive approach to customer relationship management, where it is not limited to financial products and services. Rather, understanding its clients’ personal preferences, maintaining a strong bond and delivering exceptional level of hospitality and care that reflects the warmth of the Omani values.

The Sadara Wealth Management and Private Banking Division uses a dedicated system called Wealth Management System, which has gone through a significant upgrade. The state-of-the-art Wealth Management System now has the capability to offer diversified products across various client segments, an end-to-end automation from client on-boarding to fulfilment, including full integration with its core banking solution.

In addition, it has also enabled its wealth management customers to be serviced through a dedicated mobile banking app for investment solutions, brokerage, local market investment, one touch register to purchase and more.

Sadara is a critical part of NBO’s retail banking business and constitutes a sizable portion of its income. It helped bring in the following impressive results:

• Investment revenue increased by 16% year-on-year
• Investment client universe increased by 65% year-on-year
• NBO’s AUM increased by 35% year-on-year
• NBO now holds 15% market share in AUM in the affluent segment within a span of 4 years of offering WM capabilities

Private Banking Landscape in Middle East

 In these trying times, NBO is very strategic in its approach to wealth management in the Middle East. In an interview with Avinash Menon, Head Investment Products and Governance, he described NBO’s push towards digitisation:

“Even during these difficult times, our strategy is simple. We had to use available technology to remain connected to our clients. We stayed in touch over phone calls, video calls and emails to ensure they were fully aware of what was happening in the market and in particular, the health of their portfolios. Indeed, we see a spike in the number of new clients to on-board in the first half of this year, which is always welcoming. This is attributed to both the reputation we built in the market over the last few years, as well as the distressed, fire-sale prices securities were trading at.”

The exponential digital financial services demand growth needs to be looked at in the context of the exponential increase in the total addressable market for wealth management globally. In the case of NBO, it has an equation that self-balances building digital capabilities for an addressable market. This reference is made directly to the Sultanate of Oman as it is growing with a non-linear slope.

Mr. Menon further explains: “We commenced our digital readiness journey early last year. Some of the signals we picked up from the Sultanate of Oman and the region indicated that Wealth Management may no longer be a ‘push’ business; but may gradually transform into a ‘customer pull’ segment.

“Some of the factors that accelerate digital readiness demand are lower-for-much-longer interest rates, improved financial literacy, rapid rise of web content, democratisation of knowledge, access to DIY (Do It Yourself) platforms and lastly, a growing pool of highly talented Private Bankers and Financial Advisors who understand that ‘digitisation’ does not diminish their roles, but will instead aid them to move higher up in the value chain to handle more complexity for their clients.”

He further added that “while the pandemic may have accelerated the Wealth Management businesses into ‘knee-jerk reaction’, we stayed ahead of the curve on digital transformation.”

While the pandemic may have accelerated the Wealth Management businesses into ‘knee-jerk reaction’, we stayed ahead of the curve on digital transformation.

For Mr. Menon, the outlook for Middle East’s private banking landscape is positive. “We believe, in the next 12 to 24 months, we will start seeing local banks in the region go from being under-dogs to dominant players in the Private Banking space mirroring the trend in the UAE.

“Another trend, which is growing globally, is the focus on creating sustainable growth in the Private Banking business by adopting best governance practices. After all, the client needs to always be at the center of the business,” he stressed.

 

An Exceptional Year

By all indications, NBO is headed for another great year as it builds upon the gains achieved in previous year. Wessam Abdul Monem Al Asfoor, Head of Sadara Wealth Management & Private Banking further elaborated on this.

“In general, 2019 was a particularly good year for the industry. The market sentiment was bullish throughout. The market returns of 2019 were also aided by the troughs formed in Q4 2018. For a relatively nascent business, most of our clients were witnessing their first major market correction in Q4 2018.

“We focused on what we do best, which is staying close to our clients and understanding their needs. For example, we reinforced their long-term portfolio goals. This kind of discussions helped us understand how we can better benefit our clients. We were also able to reassure and get them through a hostile spell of market turbulence.”

“Furthermore, in 2019, we developed our first-ever market outlook report. The in-house written guide helped our team of Wealth Advisors and Relationship Managers navigate the market. It was truly an exceptional year for us.”

Having been recognised as Highly Acclaimed for the Best Private Bank Middle East accolade at the Global Private Banking Innovation Awards 2020, Mr. Wesam Al Asfoor expressed delight as he shares what private wealth customers can expect from NBO in the coming months.

“Sadara Wealth Managementand Private Banking offers a customised experience for our exclusive banking customers with an expanded range of investment, insurance products and brokerage services that makes financial management more personal and comfortable.”

“Our approach to customer relationship management is distinct, where it is not limited to financial products and services but also a good understanding of our clients’ personal preferences, maintaining a strong bond and delivering exceptional level of hospitality and care that reflects the warmth of our Omani values.”

“We offer our wealth proposition through a range of simple to complex investment solutions based on the client’s needs, risk appetite, time horizon and investment sophistication requirements. Our clients can continue to expect NBO to maintain its role as a thought-leader in this space in Oman, along with further expansion in our range of products and capabilities; and a relentless focus on continually improving the client’s experience. Our strategic priority is to remain close to our customers to preserve and grow their wealth,” he concludes.

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