Full disclosure: Emirates NBD adopts a financial disclosure tool
Emirates NBD implements a software-based tool to help slash the time it takes to disclose quarterly financial reports
Emirates NBD is one of the largest banking groups in the Middle East. It is a major player in the UAE corporate and retail banking arena, and on top of that, it has strong performance in the worlds of Islamic banking, global markets and treasury, and asset management and brokerage operations, to name a few. Headquartered in the UAE, the bank also has operations in Egypt, Saudi Arabia, Singapore, the United Kingdom, as well as representative offices in India, China and Indonesia.
As at 31 December 2014, the bank’s total assets included AED 363 billion, over 11,000 employees and over AED 14 billion of total operating income. The group has a leading retail banking franchise in the UAE, with more than 215 branches and over 889 ATMs and CDMs in the UAE and overseas. And, going by its financial results — released quarterly — Emirates NBD is the most profitable bank in the UAE.
Indeed, financial reporting is something that Emirates NBD takes extremely seriously. According to Surya Subramanian, group CFO, the bank aims to be at the forefront of transparency. He points to new regulations that make it compulsory for organisations to release and disclose unaudited full financials at the year-end within 45 days . However, he also says that Emirates NBD has been disclosing audited full financial results long before that law was put in place. He says that the bank sees it as something as a responsibility to be transparent.
“We have always been at the forefront of transparency in this market. If you talk to analysts, if you talk to others, they will tell you that, in terms of our press releases, in terms of the quality of the information, in terms of our investor relations engagement, we are ahead of the street,” Subramanian explains.
“Of course, in recent years, everybody else has been catching up. Now, it’s mandatory for companies to release release the full financials at year-end within a limited timeframe. Before, you could opt to release full financials, or you could just give a summary and press release for the year. But we were one of the few companies that would always release audited full financials, even for the quarterly results.”
One of the most important things to consider when disclosing financial results, however, is how long they’ll take to be released. And recently, Emirates NBD adopted a technology that would help the company slash the time and effort it required to disclose quarterly results.
According to Subramanian, disclosing financial results is an arduous task, which takes up plenty of the finance team’s time. This is down to a simple reason — the results have to be error-free. Numbers need to be counted, re-counted, and drawn up into reports, which then have to be audited. However, actually writing the report, according to Subramanian, is “the last mile” — there is much work that goes on before the report is drafted that leads up to the eventual financial disclosure.
Unfortunately, for Emirates NBD, releasing financial reports, in detail, every quarter was becoming too fraught with problems. He puts this down to a few things. First, the company did not have any technology solutions specifically designed for reporting that it could use to make the process easier. And more importantly, the bank’s internal processes were not best suited to the job. However, the two go hand-in-hand. Realising that IT could help with financial disclosure, Subramanian also contended that it would not be right to systemise a flawed process — so before evaluating any technology solutions, he went about “cleaning up” the in-house process.
“In most organisations, if you go, most staff would say that we lack systems. But the reality is that you will always lack systems, because systems are ever-changing. What was a good system five years back is no longer a good system today. If your premise is that I’m going to have good systems, it will solve my problem, you’re bound to fail. Systems are an integral part of the solution, but it’s not the only part,” he explains.
“What we found more important was people and process. You have to get your process right, otherwise you’re systemising a complicated process. The problem with systems is, because they are so fast, you don’t realise that the process is complicated. If a human being had to do it, it would take you 100 years, but the system does it straight away. But you don’t realise, then, what the control challenges are.”