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Emerald Emerging Markets Case Studies (2011)



About the Authors:

Professor Janat Shah, Indian Institute of Management Bangalore, India
Professor Janat Shah is a professor of Production and Operations Management at Indian Institute of
Management Bangalore. His areas of research are supply chain contracts, risk management and
operations strategy. He has published extensively in national and international journals. He has helped
number of Indian companies design and develops decision-support systems for supply chain
management. He has been offering executive programs in several countries including China, Sri Lanka,
Dubai and Singapore. He is on the editorial board of International Journal of Procurement
Management, International Journal of Product Lifecycle Management and International Journal of
Logistics: Research and Applications. He is also currently President of Society of Operations
Management India. He can be contacted at

Dr. Thomas Joseph, Head-Operations Strategy, UAE Exchange, UAE

Dr. Thomas Joseph is Head of Operations Strategy at UAE Exchange. He is a Fellow of Indian Institute
of Management Bangalore in the area of Corporate Strategy and Policy. He has published in national
and international journals. He has worked in a number of private sector and public sector companies in
various capacities. He can be contacted at

This case was written by Professor Janat Shah and Dr. Thomas Joseph. It was prepared using company information and
interviews and its intension was to provide material for class discussion through publication. The authors do not intend to
illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and
other identifying information to protect confidentiality. Copyright Shah and Joseph 2010

Emerald Emerging Markets Case Studies (2011)


It was the last week of November 2009. Mr. Sudhir Kumar Shetty was addressing the staff get-together
as a part of 30 year celebrations of UAE Exchange Centre LLC. On his agenda, was a deep appreciation
for the history of continuous growth of the company for the past so many years but on the other side
loomed the challenges thrown by the Global meltdown in the past year and the immediate Dubai World
crisis which had rattled the markets. The financial crisis had already affected operations of several
financial institutions across the world. The Dubai World crisis had further dented the confidence in the
markets. Mr. Shetty knew that it was time to carefully handle the challenges that lay ahead.
As a fall out of the financial crisis, it was possible that half of all UAE's construction projects, totaling
$582bn, were likely to be adversely affected. This would drastically affect the remittance flow from
Dubai, which constituted a major portion of UAE Exchanges service offerings.
Further, the intensity of competition was building up. In UAE, more than 120 exchange companies vied
for better space in customer base, product offering, service quality and profitability. The sluggish market
would now intensify this competition further.
In order to tackle these challenges, the time had come for a two pronged approach. Mr. Shetty believed
that it was necessary for the firm to develop capabilities and increase its top line by expanding horizons.
Another consideration was a change in the business level strategy to be adopted in the non-growing
market of UAE. None of this seemed easy. He knew he had a tough task on hand but was prepared to
lead the company through these uncertain and turbulent times.

Company Background
UAE Exchange began its operations in 1980 with a small branch in Abu Dhabi. The leaders in the firm
had always felt the need of an established organized funds transfer facility in the country for expatriates
to remit their hard earned money to their home countries. UAE Exchange was established to cater to this
need. From its humble beginnings, UAE Exchange came a long way. An ISO 9001:2000 organization,
UAE Exchange today was a leading global remittance brand with operations spreading over 22 countries
across 5 continents of the world through a strong network of 481 direct offices.
With revenues in excess of AED 500mn in 2008, and a strong base of more than a million customers,
UAE Exchange developed as one of the biggest remittances firms in the Middle East. The vision set by
its founders, Chairman His Excellency Abdulla Humaid Ali Al Mazroei, and Managing Director and
Chief Executive Officer Dr. B. R. Shetty, guided UAE Exchange in its pursuit of excellence in all areas
of operation. Its Chief Operating Officer, Mr. Y. Sudhir Kumar Shetty had successful guided the
company further, in all its endeavors.
Over the years, UAE Exchange had specialized as a distributed retailer of transaction oriented financial
services. The core offerings made by UAE Exchange were worldwide remittance of funds, demand
drafts in various currencies, and retail and bulk trade in a host of currencies. UAE Exchange was the
first partner for the instant cash transfer service provider Western Union and became principal agent for
the country later.

Emerald Emerging Markets Case Studies (2011)

Emerald Emerging Markets Case Studies (2011)

The company had grown positively over the years. Beginning of 2008 saw 50% rise in remittance
counts, 68% rise in Forex margins, 41% raise in business volume, and overall doubling of revenues. The
company had fixed its Return on Capital Employed target at 50% and had consistently achieved above
it. In UAE alone the company had established its vast presence with a total of 54 branches. It further
added another 25 branches in the year 2008. It also reached a million customers serviced per month in
the year 2008. This was possible through several initiatives taken by the company and process
improvements made at branch level operations.
The company had also established its global presence over the years in continents across the world
namely North America, Europe, Africa, Asia and Australia. By beginning of the year 2009, the company
had established direct banking relations with 150 banks across 37 countries worldwide.
Market Share
From the information available in the public domain, such as the World Bank reports, and Central Bank
of UAE Reports, the UAE Exchanges Management Information Systems team deduced the market
share of the company as a percentage of the Global Remittance Market (worked out as a percentage of
money remitted by UAE Exchange to the total money remitted globally through the organized modes).
Figure 1 shows an increasing market share in recent years.

Figure 1

However, since early 2009, business environment became challenging on the face of the Global
Financial Crisis, characterized by a combination of volume declines in almost all the verticals of
business and market situation.
Company Values
One of the reasons for the fast paced growth of the company had been its strong roots in values. UAE
Exchange over the years evolved as Worlds Trusted Money Transferrer. This was the result of the
values imbibed by the leaders from the very beginning. They identified that for any business to operate

Emerald Emerging Markets Case Studies (2011)

in an efficient and effective manner, it would require three components to perform in tandem namely,
Product, Process and People (3Ps). However, in order to meet the companys objective of providing
organized money transfer facility with a personal touch, it was important to have strong values and
ethics. UAE Exchanges 3P foundation was built on three Core Values which are Knowledge, Integrity
and Commitment.

Knowledge The management within the organisation believed that what differentiated excellent
organisations from others was the knowledge level of its people. In order to serve the customers in
a better manner, the firm ensured that their staff was competent and trained in a highly
professional environment.

Integrity For the leaders, trust and integrity were the foremost values in order to succeed in the
industry as it dealt in public money. Hence, the role of Audits and Compliance played an
important role. UAE Exchange as a financial institution became fully committed to remain
constantly vigilant to money laundering prevention and combating the financing of terrorism. It
committed to complying in letter and spirit of the Anti-Money Laundering and Counter Terrorism
Financing legislation laid down by the Central Bank of UAE.

Commitment The Company believed that no business would succeed without commitment and
active involvement of the entire organization. Hence, the founders instilled a sense of passion
among its employees and served its customers with warmth; undertook activities which were
committed to the society and fostered business relations committed to partners.

Product Portfolio and Services

By early 2009, UAE Exchange offered a wide range of products and services. It pioneered new
standards in fund transfer services since their establishment in 1980, ever staying ahead of competition
with advanced and slick enhancements in the technology, operations and customer service spheres.
The Company's portfolio of services included Draft cheques, Swift transfers, Express transfers, Xpress
Money transfers, Western Union money transfers, Travelex money transfers, Credit card settlement
services and cash advances, Inter-Emirates money transfers, purchase and sale of foreign currency bank
notes, and Traveller's Cheques in retail and wholesale (Table 1).
The company built up a firm commitment to quality products and an unblemished image, which
empowered it to become an acknowledged force in the world remittance market. The company offered a
variety of products and services catering to different customer needs. However, the remittance services
offering remained the largest contributor to their revenues.
The remittance services of the company consisted of Bank Transfer, Instant Money Transfer, Associate
Branch Transfer, Visa Money Transfer, Money Sent and Remittance through Credit Card. The other
services offered were Forex Services, Bill Payment, Travel Services, Wealth Management Services,
Payroll Services, and Allied Services. Under these service categories UAE Exchange had further
designed and developed various product offerings.

Emerald Emerging Markets Case Studies (2011)

Figure 2 shows the shift of preference from Demand Draft (DD) and Electronic Transfer (ET) to
Telegraphic Transfer (TT) and Instant Money (IM) cash products.

Figure 2

% Contribution





Target TT

Customer Service
The key to the continuous growth of UAE Exchange was attributed to the trust of its customers in the
reliability and service levels offered. The company logo said Service is our Currency and the
employees at UAE Exchange truly believed in it. In line with its Quality Policy to be an organization
that strategizes to listen to the customers, and identifies their needs, delivers solutions, UAE Exchange
ensured that timely and quality service was provided to the customer, feedbacks were collected and
corrective actions initiated.
Customer perception was measured and managed through effective usage of interactive customer touch
points. Customers provide their opinions, suggestions and thoughts through touch points which formed
the material for UAE Exchange to review and improve its delivery of products.
The top management at UAE Exchange made sure that any feedback from the customer was
immediately acted upon. The company had a feedback system in each branch and a customer service
department which acted on customer complaints. This led to reduced customer complaints.
The department also conducted frequent customer satisfaction surveys and designed various customer
satisfaction indexes which were often the main agenda for top management discussions. The focus on
improving service quality led to improved operations in all the branches. The company had also
increased the number of staff members in all its branches so that more number of counters were manned
every time to reduce the queue length of customers. All these efforts towards ensuring customer care
reflected in high levels of satisfaction among UAE Exchange customers.

Emerald Emerging Markets Case Studies (2011)

Table 1


Nature of
Demand Draft

Mail Transfers



taken for
5-7 days


Transfer of money was initially being done through

issuance of DD instruments to the remitters and was being
physically carried/ posted by the remitters to the respective
beneficiaries by themselves.

3-5 days


Demand drafts issued by UAE Exchange where being lost

in transit often entailing long drawn correspondences with
banks. UAE Exchange innovated and took responsibility
for delivery of issued drafts by employing postal/courier

2-3 days


Introduction of MT did not entirely remedy the problems

associated with delivery of drafts. In order to reduce (A)
problems associated with non-delivery (B) reduce cycle
time for credit of funds Express Transfer, a product
wherein the data is transmitted from UAE and is printed at
the destination was introduced. This reduced the cycle
time substantially from 10 days to 3 days.
Telegraphic transfer further reduced the cycle time by 1
day by facilitating the credit of funds to the account of the
beneficiary within 48 hours from the time of remittance,
using SWIFT messaging platform.

1-2 days

Transfer (ET)

Transfer (TT)


Xpress Money


The instant pay out product offered by Western Union was

seldom used by masses due to high cost of transfer. The
leadership came out with Xpress money which was cost
effective and met the instant pay out needs of the masses.


Direct Credits


24 hours



Reduction of throughput time for credit of funds remitted

from UAE to any country leveraging the technology.

Direct Credit
with SMS


Considering the anxiety of the remitters and to be proactive

SMS notification is sent for success and reject transactions

24 hours



To facilitate large value cash transfers among the various

branches of UAE Exchange Globally





To address the online transaction need of the customer.

24 Hours

Emerald Emerging Markets Case Studies (2011)

Policy and Strategy Building Process

Stakeholder Management
UAE Exchange had always been at the forefront of timely policy changes and strategic adaptability
which helped it garner rapid market share since the 1980s. The company, since its inception decided to
understand the needs of its stakeholders before any product or service offering. It defined market
segments based on three aspects namely:
a. customer
b. product, and
c. geographical area
Information on these three aspects was gathered through both formal and informal mechanisms. (See
Table 2 for details of the mechanisms employed.)

Table 2




Internal MIS reports on Customer Database,

Customer intimating through suggestion and
Through customer interactions with
Product Performance Reports, Market
Development Executives
Interactions by leaders in conferences,
forums, seminars
Market Research

The information collected through the aforementioned means was analyzed through different set
procedures in defining the market and market segment. Through this the present and the future needs
and expectations of various customers were derived.
At UAE Exchange, stakeholders included customers, partners, employees, process owners, society and
shareholders. Different mechanisms were adopted and practiced to identify their needs and expectations.
Figure 3 explains one such mechanism in practice. The information collected through these mechanisms
were collated and submitted to the core team by the process owners. Appropriate actions were initiated
based on this information.
UAE Exchange addressed the needs of environmental and social actors through active memberships in
several committees started by the Government and other statutory bodies. An example was NAMLU
which had the Director of the Company as an active member. The committee was formed for monitoring
and recommendations for development of Anti Money Laundering Initiatives in the country. Data on
environmental issues were analysed by UAE Exchange as part of the ISO 14001 exercise. Resources
consumed on each activity were studied and those having an impact on the environment were classified
according to their significance.

Emerald Emerging Markets Case Studies (2011)

Figure 3


Speak UP,
PMS, Training
Owners: Audits

Bank Survey

and Need
Touch points,
Market Survey

Board Meetings

Interaction by

Policy and Strategy Making

Policy and strategy building at UAE Exchange were based on information from performance
measurement, learning, research and external related activities. Performance indicators included
information on quantitative and qualitative performance at different levels including Corporate, Branch,
Back End Support Functions and Employees. Various means of information collection for this were
Management Reports compiled by MIS, Monthly Performance Reports, Daily Monitoring Reports,
Human Resource Management Systems, and Process Review Mechanisms. Learning was carried out
through Quality Management Services, Internal Audits, Anti-Money Laundering Audit, Annual
Corporate Audit, Business Impact analysis, BHPs European Foundation for Quality Management, ISO
9001:2000 participation in Business Excellence Programs and Quarterly Audits/Assessments.
Research was carried out through customer surveys and benchmarking against the best performers in the
market. Brand Awareness and External Image of UAE Exchange was also identified through
mechanisms like Market Surveys, Mystery Shopping and Customer Surveys. External activities
consisted of partnerships with organizations of complementary skills and resources. For convenience
and better identification, partners were grouped under two main categories: operational, and functional.
These categories were further subdivided based on key focus areas of the business. There was a
considerable increase in the number of partnerships that company forged with numerous banks. The
partnerships helped UAE Exchange attain improved service levels for its customers. It was the only
exchange house to have a SWIFT payment partnership. Apart from this, another strategy adopted was to
improve existing partnerships by getting into newer arrangements with the partner. These arrangements
helped provide value additions to customers as they were able to avail multiple services of the same
bank at any UAE Exchange branch of their convenience.

Emerald Emerging Markets Case Studies (2011)

Geographical Expansion
UAE Exchange was a retailer of financial services which were transactional in nature making
geographic expansion important in various product and service lines. UAE Exchange put in place a clear
cut market entry process to fuel its expansion plan. The starting point for any country expansion was to
come out with a Country Study Report (CSR). CSR provided information related to UAE Exchange vis-vis the proposed country of operation. The CSR also ranked the country on a scale of 10 which was
called the Country Assessment Rating (CAR). The reports were then put forward to the senior
management for review and approval.
Strategic Adaptability
For the successful implementation of policies and strategies, changes were made to align the structure of
UAE Exchange, whenever required. The following can be traced as the important changes brought
1. Establishment of Key personnel assuming functional roles
2. Branches were grouped under 3 regions with an Executive Manager (EM) for each Region.
This was done to provide better quality service to customers and also to run and manage the global
business operations of UAE Exchange effectively from a strategic perspective.
1. The top management formed Global Head Quarters (GHQ) based in Abu Dhabi
2. All country operations were given separate entity status
This was adopted to provide a global structure One UAE Exchange, to effectively utilize all resources
available without restrictions by country, region or location
Early 2009 1. UAE operations classified into 6 areas with an Area Manager for each region reporting to the
Operations Head
2. Lobby Management System introduced
This was done to have a focused review of the operational targets and achievements. Better customer
UAE Exchange adopted a 4 point approach to reiterate its presence in established markets.

Product Addition: UAE Exchange constantly added several products and services in its
customer offering which resulted in attracting more customers to its counters.

Innovation: UAE Exchange constantly adopted new technologies in the market and review ed
the needs and customer behaviors to adapt its business strategy. One such innovation was the
introduction of online remittance facility wherein customers can log in to the
website and remit money. Another major innovative product offering was Smart Pay, a payroll solution

Emerald Emerging Markets Case Studies (2011)

offered by UAE Exchange beneficial to both the employer and the employee. The introduction of self
serving multilingual kiosks at the branches and the SMS alerts to remitter on account credit or collection
of money by beneficiary had also been introduced with the objective of reassuring the market presence.

Network Expansion: Another strategy of UAE Exchange was of reaching out to the customers
by constantly expanding its network presence within UAE. This resulted in UAE Exchange being the
first exchange house to have branches in all the Emirates of UAE.

Customer Acquisition: Above all, acquiring new customers while retaining the existing
customers had been one of the main strategies adopted by UAE Exchange over the years, which was
evident from the ever growing customer base it owned.
Technology Adoption
Across the years, UAE Exchange scaled up its Technology and infrastructure rapidly to meet the
increasing demands. The operations of UAE Exchange were based on in-house developed software Net
Term, which worked on a client server platform. The changing face of technology all over the world
required a shift to the web based system in the year 2004. With this aim, the IT team of UAE Exchange
worked to develop the present platform XCQ. This was a web based system and provided access
through internet from any location. It was more user-friendly than the erstwhile Net Term and was
flexible due to its compatibility to other softwares. Further, XCQ was taken up for revamp to bring up a
newer version by end of 2009.
In order to constantly review emerging technologies, the company constituted a cross functional team
comprising Operations, Business Development, Finance and Information Technology to evaluate and
implement new technologies. Emerging technologies were classified as in the Figure 4 below.
Figure 4







Emerald Emerging Markets Case Studies (2011)

Integrating emerging technologies into the current line of business was the main focus of the cross
functional team. Through their evaluation the company tried to identify whether new technology
integration will help the company provide consumer friendly and better products to its customers.

The Future Ahead

Over the last two decades of its operations, UAE Exchange had emerged as a leading global remittance
brand with visionary Leadership, large market share, streamlined processes, positive financial
performance, varied product portfolio and outstanding customer service.
However, new challenges lay ahead. Pricing of services was an area of concern as intense competition
was lowering prices of the products offered to customers. The Management Information System ( MIS)
needed to be strengthened further as large volumes of data called for effective analysis and
communication throughout the organisation. Although, UAE Exchange had been active in shifting
through technologies, the advent of emerging technologies posed an ever growing challenge for the
company. For faster completion of transactions from anywhere, handheld devices were increasingly
being used. Further, Mobile Banking was fast revolutionizing the industry. Emergence of these
technologies meant many of the products and services needed to be revamped and organizational
processes changed. Further, the twin impact of Global Financial crisis and Dubai World crisis meant
increasing environmental uncertainty in financial markets. It also meant severe loss of volumes for the
Remittance Industry.
Mr. Shettys Dilemma
Mr. Shetty knew that an uncertain future lay ahead. On one hand he intended to specify strategies for
UAE Exchanges different businesses through geographical and product expansion. On the other hand
were plans to adopt newer technologies. Further, increasing the volumes in a slow-growth market was
no simple task. Also to keep a healthy bottom line he needed to set functional strategies in alignment
with business level strategies.
As he began addressing the gathering, he realised he had a difficult task at hand.