With the financial inclusion comes the responsibility of monitoring where the money is coming from and where it is going.
Ali Reza Iftekhar
Managing Director and CEO, Eastern Bank Limited
Ali Reza Iftekhar is the CEO and MD of Eastern Bank Limited (EBL) and is a game changer in the Bangladeshi financial sector. At the helm of affairs at EBL in the past eight years he has brought product and service innovations to rewrite how banking is done in the country and turned the bank from a good brand to one of the most valuable financial brands. Under his leadership, the bank has received many accolades including the “Best Retail Bank in Bangladesh” award from The Asian Banker for three consecutive years 2013, 2014 and 2015; the IFC Global Award for the Best Partner for Working Capital Systemic Solution; ICSB National Award 2014 for Corporate Governance Excellence; the Best Financial Institution 2010 at the DHL-Daily Star Bangladesh Business Award. He is also heading the Association of Bankers, Bangladesh (ABB), the apex body for banking professionals of the country, as its chairman for the term of 2014–15.
Having a banking career spanning over 30 years, his personal achievements include CEO of the Year 2012 by Asian HR Leadership Award held in Dubai, Credit Specialist Certificate by world renowned Omega in UK, Certificate of Recognition in International Trade Skill Assessment Program jointly conducted by Standard Chartered Group London and ICC.
A 1982 graduate from the University of Dhaka in Marketing, his specialization in risk management, corporate banking, operations and retail made him one of the leading bankers of the country. To keep him updated with the current management thoughts, he attended Harvard Business School Program on Leadership in Financial Organizations in 2012, participated in the Strategic Leadership Program at University of Oxford, UK in 2013, and took part in Executive Program in Corporate Governance and Strategic Management at Haas School of Business, University of California, Berkeley in 2014 in 2015, he has participated in the Value Creation in Banking and Strategic Management Program at INSEAD Business School, France.
You have been consistently innovating products and services from a long time now. Recently, you have launched Sky Pay. Would you please tell us about its features and how this is going to simplify banking for customers?
My objective is to modernize banking services, simplify its processes and make people’s lives easier. As the world is being digitized, we wanted to bring banking to customers’ handsets and make banking available on the go. This mobile app, easy to install in all devises, will provide banking services such as mobile banking, internet banking and various payment solutions. From checking balances, bank transfers, ATM and locating branch locations this app offers a plethora of services and options to customers. The software was developed locally and then sent to London for security checks. After getting their certification we launched it here. Considering Dhaka’s immovable traffic, we want our customers to do most of their banking on their mobile phone. This product is the first of its kind in Bangladesh and should not be confused with mobile banking. This is not just a payment gateway; it is a comprehensive banking tool for smart phone users. We will continuously test and upgrade the processes and hopefully we will come to a stage when the need for customers to visit banks will be eliminated.
We are living in a globalized world now where there is cross boarder flow of funds through wire transfer enabled by increasing ease of access to internet, smartcard and mobile phone based technology. This technology based money transfer has brought in new surveillance challenges for the financial institutions. In this changed situation and particularly after Paris tragedy, money laundering and terrorist financing have become major threats to the integrity of financial system, and they are not just issues of concern locally.What is your take on combating money laundering and terrorist financing?
No system is fully watertight to stop the entrance of black money into the system. Having said that, I would say that it is a continuous process and a matter of keeping up surveillances all the time. You can never eliminate crime, but you can minimize it to a negligible level. We are now extra vigilant and making all possible inspections regarding customers. While it is important to know who we are banking with, it is also important to know who my colleagues are. If an employee is seen expending beyond his/her means then it is matter of concern and this should be investigated.
Digital solutions are required to stop terrorist financing and there are many sanctions from the UN, USA Europe and Australia which need to be incorporated into our systems. Manually it is impossible to scan everything. We have already installed security software which will be active from January the 1st of 2016. It is costly but we have to consider the risk factor in terms of both financial and non-financial losses that can occur from forgery and other fraudulent activities.
With 39 commercial banks are we overbanked?
I am not concerned about the numbers. In fact, a healthy competition sharpens an institution. I welcome this competition as long as it isn’t unhealthy. Banks have to improve their marketing capabilities and product quality. They are evolving and in a few years’ time banks without IT driven product solutions will not be able to survive.
Financial inclusion is the buzzword in the sector now. What is your take on the current unbanked population?
Everyone talks about financial inclusion but we also have to look at the surge of terrorism financing issues. With the financial inclusion comes the responsibility of monitoring where the money is coming from and where it is going. Financial inclusion does not necessarily mean going to fur flung areas. Don’t get me wrong, I am not against bringing marginalized people under the banking network. Have we covered the large unbanked population of major cities of the country? As commercial banks we cannot really on moving into remote areas for that involves costs and, you know, at the end of the day we have to pay dividends to our stakeholders. Banks can practice CSR, not charity.
You are a market leader when it comes to providing loans for students going abroad to pursue higher studies. What are your future plans in student loan products?
EBL is a market leader in student banking. The student loans are created in favor of their parents. This is done for practical reasons. If we do it in favor of the students, once they leave the country it will be difficult for us to reach them and a lot of those loans may become bad loans. If Bangladeshi universities come forward and tie up with us we can give loans to students pursuing higher studies. Once they start their working life they can repay the loans.
