The Anglo-Gulf Trade Bank (AGTB) is set to launch its operations next year, aiming to become the world’s first digitally-enabled, data-driven trade bank, with a focus on SMEs.
The bank has officially opened its headquarters in the Abu Dhabi Global Market (ADGM) and is currently working towards receiving final regulatory approval by early 2019. It also plans to open additional offices in the UK, Saudi Arabia, India and Asia.
Explaining the idea behind starting up a new bank in what is today a heavily over-banked region, its deputy CEO Daniel Gould tells GTR that AGTB is “not like any other trade bank in the Middle East or the world”.
“The whole point of building a trade bank from scratch has been to avoid all those legacies of the incumbent banks – not just IT legacies, but also operational legacies and the mindset legacy that often prevent a bank from offering the trade finance services that can be offered today,” he says.
His words closely resemble the ambitions of the many challenger banks that have emerged in the retail banking space around the word in recent years, particularly in the UK. According to Gould, the offerings that have emerged on the back of this movement have not always been to the benefit of corporate clients.
“We are taking a lot of the lessons learned and tools developed in the retail banking space and intelligently and selectively applying them and moving them into the corporate banking space,” he explains.
AGTB, he says, will be 100% cloud-based, and its technology enables tightly integrated front, middle and back-office systems – which will help drive efficiencies. The bank also deploys new technologies like big data analytics to better monitor and assess risk and more precisely tailor prices to its customers.
It is also exploring blockchain technology to give clients better access to trade finance, with the bank announcing at its office launch that it has joined the Marco Polo blockchain project. Built by TradeIX, R3 and a group of banks on the Corda blockchain framework, the multibank platform for open account trade has recently been released and is due to enter a pilot phase next month. AGTB itself will start testing the platform with clients in Q1 next year, according to Gould.
With the help of new technology, AGTB hopes it can appeal to firms that have otherwise struggled to get the attention of incumbent banks. With an aim to help bridge the trade finance gap for SMEs, AGTB’s initial focus is on companies conducting trade between the UK and UAE, but the bank plans to expand over time.
“Our goal from the get-go was to think of a way that we can bring trade finance to those underserved segments of international trade,” Gould says. “Today trade finance seems to only really work for the multinational companies and large clients that can command the attention of the large incumbents. As soon as you move into the middle market and below, the level of services and the product availability is very limited, particularly in international trade.”
To begin with, the bank will offer supply chain finance, but – again – it plans to expand over time to include other open account working capital solutions such as pre-shipment finance.
AGTB is a joint venture between AGTB Holdings, a Rowland family-controlled company, and Mubadala Investment. Edmund Rowland has taken on the role of CEO of AGTB, and the bank will soon announce the appointment of its new head of banking.
Gould himself has been part of the AGTB project since March. Before that, he was CEO of the Moscow subsidiary of Banque Havilland, owned by the Rowland family. He previously worked for Goldman Sachs and Morgan Stanley in London.