Times of Malta speaks to Arnaud Denis, CEO of MeDirect Group, about last year’s performance and the banking group’s plans for 2021 to grow its business and continue to innovate.
Since you joined in September 2019, how has MeDirect Group navigated through 2020 and the start of 2021, in what has been a very challenging period for everyone, including banks?
This last year has been an exceptionally challenging period for the banking sector, including our group, due to the ongoing pandemic. Despite these challenges, MeDirect Group accelerated the implementation of its business strategy of diversifying its balance sheet and delivering long-term profitable growth as a pan-European retail digital bank, focusing on delivering a disruptive wealth value proposition to its retail customers.
We continued to transform ourselves rapidly, by investing in technology and people, so as to grow our WealthTech platform.
Our profitability last year was adversely affected by significant COVID-related impairments in the group’s legacy international corporate lending portfolio. However, as a systemically important bank supervised by the European Central Bank, we continued to demonstrate resilience and the group remains well capitalised, with a strong funding and liquidity base, with ratios well in excess of regulatory requirements.
We are extremely proud of the way we responded to the pandemic, prioritising support to our clients, protecting our people, preserving capital and ensuring the ongoing future value of the business by continuing to invest in the bank’s platform with a clear strategic intent. Thanks to our team spread across four countries, we have demonstrated that MeDirect is a strong, resilient and agile organisation.
Could you tell us more about your group and what is it that clients should expect in 2021?
As part of a growing pan-European banking group, MeDirect is the third largest banking group in Malta, focusing on servicing the needs of our clients through the provision of advanced digital banking solutions. Our group, MeDirect Group, operates also in Belgium, The Netherlands and the UK.
We are a client-centric challenger bank that runs a thriving retail and wealth business, as well as a stable local corporate banking business, while the International Corporate Lending book is being reduced. As stated earlier, we are diversifying our business model and have launched our mortgage businesses in The Netherlands as well as Malta, while managing to grow our retail client base by 20 per cent per annum over the past two years.
Our objective is to make digital investing simple and convenient for everyone. In order to achieve this, innovation is key, especially in the WealthTech side of our business. In the last year alone, we deployed technological deliverables such as the new mobile app, the new on-boarding processes as well as a new e-banking platform.
We think we can deliver value to our clients because we can operate as a safe, regulated bank, while being in essence a FinTech, with higher level of customer centricity. We are resilient, nimble and we will continue to innovate in 2021.
Talking about your Malta business, you already mentioned that MeDirect Bank has entered the local home loans market? Why did you opt for that business?
Earlier this year, we launched our new home loans product in Malta. Our goal is to provide a new type of mortgage product in the local market, using a more digitised approach, faster turnaround of mortgage applications and a competitive pricing strategy. This is part of a wider commitment to the Maltese economy.
Last year, MeDirect continued to support the Maltese real economy through lending to Maltese corporates and small- and medium-sized enterprises. In response to the COVID-19 pandemic, our Maltese bank launched the MeAssist lending product, an assistance package issued in collaboration with the Malta Development Bank, aimed at supporting and enhancing access to bank financing for corporate customers.
You are a well-diversified group, employing people from various nationalities. How important is diversity as well as the fact that, in Malta, you run the group’s operational backbone?
Human resources and diversity are key components of our success. In fact, we bring together people from around 25 nationalities and this diversity extends also in the area of gender. Earlier this year, our efforts in this area were recognised with the awarding of the NCPE Equality Mark Certification.
Our team brings years of experience in the retail and wealth digital banking sector, and we continue to invest in our people, while attracting high-calibre talent and digital experts. In total, 70 new positions were created across the group during 2020, of which, almost two-thirds of new recruitment was in technology, digital channels, CRM, product and marketing and compliance areas, in order to accelerate the delivery of the WealthTech roadmap.
One of our competitive advantages is the efficient and high-quality service centre we operate in Malta and that supports our Maltese and international retail activities. Historically, the group has invested significantly in its technology platform with approximately €40 million of capital expenditure since 2015, in particular to develop digital capabilities and the WealthTech platform.
How has MeDirect adapted its operations during the pandemic?
Our group was one of the first banks to implement full remote working capabilities in March 2020 to address the operational challenges posed by COVID-19. MeDirect rapidly deployed measures to ensure that its premises remain as safe as possible, while supporting the well-being of all employees and clients.
Investing in the physical and mental well-being of our employees is of paramount importance. We held mental-resilience training and coaching sessions which were welcomed by our colleagues as they helped them adapt better to remote working.
Being a digital bank helped us respond rapidly to the ‘new normal’ and I would like to thank all our employees as well as clients for their continued support throughout this period.