AGTB: New kid on the block. TFG heard from Daniel Gould, Deputy CEO of Anglo-Gulf Trade Bank, and its new digital offering for trade finance in the UAE and MENA region. Building a trade bank from scratch without relying on legacy technologies has enabled AGTB to reimagine trade finance, building a competitive product for the corporate banking space.
Featuring: Daniel Gould, Deputy CEO, Anglo-Gulf Trade Bank
Host: Deepesh Patel, Editor, Trade Finance Global
Daniel, welcome to Trade Finance Talks good to get on the show, (thank you for having me), so, tell us who you are, what you do, and also why we’re here at the Microsoft Stand at SIBOS?
So who we are – Anglo-Gulf Trade Bank is a relatively new kid on the block of corporate banking, we received our category one banking licence, which means that we have a full deposit-taking bank just a few months ago. But we’ve been in the process of building for the last two and a half years- wanting to build, ultimately a disruptor in the corporate banking space. And I can talk much more about exactly how we plan to do that, leveraging all the latest technologies, but really using a opportunity of no legacy building from scratch to really reimagine the way that we deliver the value proposition to our corporate clients.
Let’s take it to the very beginning. Where were the opportunities within the Anglo-Gulf or even the MENA region? And why did you choose this region?
MENA region and the UAE, in particular, was a no brainer for us. Why? Because historically, it has always been the trade hub. And we see that only growing in the near future as we go, as we see the further development and the crystallisation of the One Belt One Road. And obviously UAE has been and will continue to be the hub of Asia to Europe, and to an extent, vice versa. So multi-regional trade patterns all centring on the UAE, with traders, our core focus, is, as I said, there was a no brainer.
I guess, moving on to a digital bank and a new and full, full, full, (full on) to set up the banking licence. Tell us a bit more about the journey, and also why you went for the Tier One bank license to start off.
So why, a banking licence rather than the platform? As I said, at the beginning, we wanted to disrupt the corporate banking, beginning with trade finance. I’ve often said, trade finance is fundamentally broken, there is a massive trade finance gap $1.5 trillion often get cited. And we felt that in order to do that, we have to, we have to start from scratch. We saw the incumbents trying to transform themselves trying to do things better, but we also recognise the cost, the length, and the risks of doing that. Digital, because while the world is going digital with different speeds and different rates of adoption, but that is the future, obviously. And so we wanted to use the opportunity to take the best in class tools that we have. And this goes back to the question earlier, why the Microsoft stand?
I’ll talk more about that. But we wanted to use the best in class tools to enable us to deliver the best possible value proposition. So straight-through processing of trade finance transactions, and cash but this focusses on trade finance, in a way that was not possible a few years ago, but also in the way most importantly, that allows us to leverage data in a totally different way. As I mentioned to you earlier, ‘use data smarter’ is one of our internal mottos. We recognise that by gorging on data every minute, we’re able to manage risk better be it, counterparty risk, be it, market risk, and also make decisions faster, which is crucial to again do trade finance in a fundamentally different way.
So ABTG is using data to enable smarter decisions. What products are you offering, you cater yourselves more towards the corporates or the smaller businesses?
Absolutely, absolutely. Again, back to what I said about the $1.5 trillion trade finance gap, anecdotally is disproportionately affecting the smaller companies, the medium and the small-sized companies trying to participate in international trade. So we knew that that underserved sector was where we had to go. But we also recognise that there is a journey to get there effectively. So we wanted to begin with the logical presented of the supply chain. The thinking is by working with the supply chain, we get the data, we’re able to use data smarter, and we’re able to use data-driven decisions and actions to ultimately serve better the small guy.
So if I am a Dubai based supplier what exactly, can I get off AGTB right now?
So right now we are in the open account, so supply chain financing, payables and receivables, in particular, we started with payables as a buyer-centric programme. Why, because that was our MVP, and we wanted to get there as quickly as possible. So for a Dubai based supplier, if you come to us, we do the onboarding much faster. So digital onboarding. So lots of anecdotal stories about months, many, many months of opening accounts, getting becoming a client of a bank. So we wanted to scrub that clean, and really allow even the smaller companies to enjoy a more or less seamless onboarding process. And then a very seamless digital, straight-through process, the experience of applying for invoice discounting, and getting an answer and getting money in your bank account. So essentially, what you would expect from a challenger bank in the retail space, that kind of client experience, but in the corporate world.
Okay. And what’s the demand been like so far?
Yeah, a lot. So while supply chain financing has been around for, say 15-20 years, the region has seen less of it even less in the mid-market space, because this has been the privilege of the bigger firms. This as we know, for an incumbent to set up an SCF programme, particularly on board the smaller corporates, the suppliers, that has been probably the biggest pain points yet. And that is why we wanted to focus on that as a as a real differentiator. So the demand has been fantastic. And in fact, we have very healthy pipeline applicants. The waiting for us to get our licence and begin.
How do the next six months look like for AGTB?
So I’m glad you asked for six months as opposed to 18, because 18 I’m not sure I could tell you. But, 6 months are going to be very busy. We are we’ve launched our payables financing programme. Yeah, we will have launched our receivables financing programme. And I don’t normally talk about blockchain. I encourage my team not to talk about blockchain too often. But I will mention that our trade finance platform TradeIX also supports blockchain Corda, which means that for the larger programmes, we will have our clients to roll out a DLT enabled solution which has a number of advantages. But again, it’s not the end all and be all. Yeah, so that’s on trade. And then on the what I call digital transaction services, which is our term of essentially cash management for and treasury solutions for larger corporates. Yeah, as well as banking as a service. They have an overused term for the FinTech that are in the AGTM, as well as some of the smaller, smaller clients. So we have these two fundamental legs, again, BP ism, which AGTB is based trade, and digital transaction services.
Daniel, thank you very much for joining us on Trade Finance Talks and really looking forward to following your growth over the next six months.
Thank you very much pleasure to talk to you.