In 2017, Emirates NBD Group, a leading banking group in the Middle East, North Africa, and Turkey (MENAT), was confronted with an ever-increasing demand from customers to provide innovative digital products and services in a highly competitive market. At that time, the banking group had strong business ideas for thriving even as its competition increased, but its IT delivery had reached capacity, so it couldn’t put all its ideas into practice. So the company decided to execute a complete overhaul of its IT infrastructure and parallel functions.
In this interview with McKinsey’s Henning Soller and Timo Mauerhoefer, Emirates NBD’s Neeraj Makin, group head of international and group strategy, and Saud Al Dhawyani, chief technology officer, explain how the bank designed, fast-tracked, and implemented its IT transformation by using application programming interfaces (APIs) to simultaneously accelerate technical modernization and enable new business ideas over time.
McKinsey: Tell us what inspired Emirates NBD Group to undertake its IT transformation in 2017.
Neeraj Makin: We operate in very competitive markets and were faced with an increasing demand for digital solutions for our customers. Although, at the time, we were regarded in the region as a leader in digital solutions and technology, our technology was complex.
We had multiple different technology stacks, and the integration among our IT platforms was complicated, which slowed us down and made any changes to our technology very expensive. Our core IT platforms were not aligned across our different locations, causing redundant work. Top management was unsure whether these locations would stay profitable.
Moreover, we had outsourced a lot of key IT capabilities, such as our IT engineers. In this setup, we couldn’t react to the increasing demand for digital solutions, such as end-to-end digital customer journeys, let alone leverage innovative banking technology, such as advanced-analytics-based product offerings. We concluded that we needed to transform our technology to outperform our competition and stay a leader in digital and technology.
McKinsey: How is your transformation different from other companies’ technology transformations?
Saud Al Dhawyani: One key difference was that we changed everything within IT in parallel. While many organizations focus on, for instance, a core-banking-system migration or push cloud adoption or experiment with agile teams, we decided that to conduct a true quantum leap, we needed to pull every lever within IT and fully transform our core technology.
We upgraded our IT architecture by modernizing key IT platforms and simplifying their integration. We optimized our IT infrastructure by building the first private-cloud platform in the region, and we modernized our organizational structure, which enabled an agile operating model. But we didn’t stop there. Building on the revamp of our core technology, we developed new digital capabilities, such as robotics, smart automation, and advanced analytics, to generate the full business value of our transformation.
Changing basically all elements of IT in parallel is a complex effort, which is the reason why many other organizations sequence the initiatives over a longer period. However, in light of increasing competition, we needed to be fast and complete our transformation within four years. To change our IT estate in parallel, we had to carefully design a modular architecture with separate layers and decouple our core platforms in the initial stages via APIs.
Given the complexity of this transformation, we knew that we would need to significantly upgrade and exchange our existing talent—this is another key difference from other transformations. We didn’t start any technical initiative until we had a critical mass of new and upskilled talent in place.
McKinsey: What role do APIs play at Emirates NBD?
Saud Al Dhawyani: In 2017, before we launched our technology transformation, we had few unstandardized APIs. Today, APIs are at the core of our IT architecture and play a significant role in our digital strategy. Our strategy is built around three key elements that are central to our API-centric architecture (exhibit).
The first element is called Sahab, meaning “cloud.” It is a fully automated private-cloud platform that is the foundational platform on which all our applications operate. The second we call Bawaba, meaning “gate.” This is our groupwide API platform, which manages more than 800 microservices and connects our channels, applications, and data platform. It also includes our developer portal. Third is our enterprise-data platform, which we call Manara, meaning “lighthouse.” Manara enables real-time data exchange among applications, a key feature that we didn’t have in the past.
With this drastic shift to APIs, we have significantly increased our delivery effectiveness and efficiency. For instance, the productivity of our agile squads rose dramatically after we launched our internal developer portal, which allows users to easily search for and manage all our APIs. This significantly reduces the integration efforts among different teams and applications and decreases the duplication of functionalities by enabling reuse at scale.
APIs were crucial for our transformation because they allowed us to modularize our IT estate and modernize some of our core IT platforms, such as our payments hub and trade-finance IT platform. We now have almost the same “code base” for all entities and locations and can add new functionalities efficiently. This also makes us more flexible in our international markets, where our growth was historically limited by our technology capabilities.
A specific example of how our API-based architecture directly creates business value is through our retail assets. Using APIs, we will be able to access and integrate different back-end capabilities and information to provide an easy way for our customers to use our key retail products and services, such as loans, cards, and mortgages, in a self-service way online. APIs now allow us to instantly offer credit cards to our customers, whereas, before, that process required lots of manual checks and reviews. Through our modular architecture, our retail assets will also be available for all our legal entities and locations.
From a business perspective, APIs enabled several strategic business initiatives. In 2019, we launched WhatsApp Banking for our customers in a matter of weeks. Today, we have 100,000 subscribed users for Emirates NBD and 50,000 for Emirates Islamic, and we have seen around a million interactions in the past 12 months. We now also have a dedicated ecosystem and API team that identifies new business opportunities enabled by making our data, products, and services available via APIs.
What’s new in banking API programs
McKinsey: Can you give us an example?
Neeraj Makin: Sure. We are collaborating with the Department of Economy and Tourism (DET) on a blockchain project to source licensing information. While blockchain is the underlying platform that provides a single source of truth of verified companies as well as of individual data and documents, we can interact with it through the APIs we build on Bawaba. These APIs allow our small and medium-size enterprises and corporate clients to consume this capability as a service. This aligns with our philosophy of building once, while the APIs enable reusability.
We also supported noqodi, a leading provider of online technology solutions in the Arab world, with real-time transaction-processing capabilities to enable operational efficiency when paying its merchants and clients. We implemented three key services leveraging our APIs on Bawaba. First, fund transfer, which allows customers to transfer money between Emirates NBD accounts locally and internationally. Second, transaction history, which gives customers access to a list of recent transactions. And third, transaction-status inquiry, through which customers can obtain recent details of a single transaction.
McKinsey: How did you approach your API transformation?
Saud Al Dhawyani: We started by designing our target architecture blueprint based on the three core platforms. We aimed for an approach to integrate these platforms through APIs and to standardize our management of APIs for two main reasons: first, to avoid creating a complex integration, or “spaghetti architecture,” as we had in the past, and second, to be more flexible and able to extend our technology by providing certain platforms a faster, more efficient way to exchange information and data, or by integrating new solutions from third parties, such as fintechs.
To prioritize our APIs, we structured the existing services we had on our enterprise service bus (ESB) in standard banking domains, such as customer and product. We also prioritized certain nonbanking APIs as “common” or “channel engagement,” such as campaigns, offers, and optical character recognition (OCR) functionalities.
We then prioritized the services based on relevance for our transformation—that is, when we would need to decouple each IT platform to drive the modernization—as well as on their level of complexity. Based on these criteria, we could better understand what the overall effort of “API-zing” our IT architecture would be. Then we started to outline the operating model and governance, in addition to detailing the API taxonomy, standards, and guidelines. Last, we decided on the technology solution for the API management platform and other relevant components and started the first proof of concept.
McKinsey: How did you build momentum at that stage?
Saud Al Dhawyani: We outlined the importance and potential of APIs for both technology and business to our management and dedicated a significant part of the budget to it. We had initial funding that was sufficient to lay the technological foundation, define the required standards and policies, and migrate all our services from the legacy ESB to microservices accessible via our standard APIs. We now have roughly 800 microservices available.
This foundation allowed us to establish three agile squads that worked only on building APIs in the different domains. We kick-started our API effort by running several API awareness sessions in IT, and we also spread awareness among our business colleagues to help our employees understand the opportunities.
To drive API adoption, it was crucial to implement a user-friendly developer portal with good documentation and sufficient search functionalities. We looked for best practices across the globe. Moreover, we invested in training our developers to familiarize them with the developer portal and with the API guidelines and standards right from the beginning. We wanted to lay the right foundations so we could easily scale when the time was right.
After initial small successes with the internal use cases and some external ones, the business demand grew significantly. They wanted additional APIs—and they wanted them quickly, so we created an agile budgeting and prioritization process to cater to the increased demand.
McKinsey: What were the biggest challenges?
Saud Al Dhawyani: One of our biggest challenges was to get the right talent to drive our API approach. Completely redesigning the integration architecture, setting up an API management platform and developer portal, and continuously prioritizing the initial API backlog are very complex tasks. On the one hand, we needed experienced engineers who knew the technological details, and on the other hand, we needed experienced product owners to ensure a laser focus on the right priorities.
In the beginning, there were several concerns about being able to build up the required talent in Dubai, since tech talent is not readily available. However, we managed to do it through a balanced combination of hiring and developing our existing talent. One key element to our success was establishing dedicated learning journeys for the different roles we needed with a combination of internal and external courses as well as certification programs.
Later on in our journey, we faced the challenge of increasing the productivity of our agile API squads. When we started, it was acceptable for our teams to deliver one API in two-to-three-week sprints. However, to follow our road map, we needed to increase our productivity dramatically. We leveraged DevOps automation tools to optimize the integration and maintain continuous deployment and delivery and doubled our API output.
McKinsey: Is there anything you would do differently if you were starting again?
Saud Al Dhawyani: Although our approach of clustering and prioritizing the existing ESB services was a good starting point to limit our initial scope, I would not follow this approach without restrictions. I would instead spend more time detailing the target design of the domains and evaluate in more detail which APIs enable the highest business value—though this certainly doesn’t mean a reduction in IT integration costs. I would also leverage existing frameworks, such as the Banking Industry Architecture Network (BIAN), as much as possible to better identify and prioritize the APIs that have higher business value.
McKinsey: What are the benefits of your API efforts? How do you quantify them?
Neeraj Makin: We have enabled several strategic business initiatives as a result. One example is our digital onboarding, which is available on mobile phones for self-service and via tablet for assistance in our branches. We have onboarded more than 100,000 customers with our new process, doing up to 85 percent with straight-through processing in less than ten minutes.
We have also implemented several successful data and analytics use cases that drive our business performance. For instance, through our API-based architecture, we were able to launch a new corporate and institutional banking portal—we call it Business Online—which is fueled by real-time data. With this tool, we can offer our corporate clients an instant overview of their payments, open letters of credits, and more—a service that is unparalleled in the region.
McKinsey: What key success factors should other organizations look for when embarking on their own API journeys?
Neeraj Makin: When reflecting on the API transformation of Emirates NBD, we can clearly see three success factors. The first is to define a clear API strategy, aiming to maximize the number of APIs as fast as possible and drive adoption with a user-friendly API developer portal. Second, be sure to build the right technology environments in order to effectively scale and maximize the team’s productivity—for example, through implementing cloud or DevOps. With traditional nonautomated infrastructure setups, it is difficult to realize the benefits of APIs. Finally, there’s talent. Having the right engineers and product owners is key to scaling an API-driven ecosystem. That requires a balanced combination of hiring new members and upskilling existing employees.
