It is more than a year since Standard life opened in Dubai. How has the brand been received in what is a new market for the company?
The move into the UAE is part of Standard Life’s strategic growth plan. As with any new market, it takes time to become fully established, but once the company enters a new market we are committed for the long term.
The Middle East is part of the long-term growth strategy of Standard Life and is integrated within the company’s Asia and emerging markets business.
In 2012 around a third of new business sales came from outside the UK, with 62% of Standard Life Investment’s new flows also coming from outside the UK.
We consider the UAE to be a high growth, high value market which fits with our international expansion strategy. Our operations in Dubai are similar to those in Hong Kong and Singapore launched in Q4 2012, each offering a consistency of products and services, and a common infrastructure. Since our launch we have been very well received by customers and our intermediary partners, who know and trust the brand and our unique investment solutions.
You decided to open the office in the Dubai International Finance Centre. Why did you choose this route into the UAE market?
Standard Life chose to leverage its expertise out of the DIFC and Dubai as a financial services hub, to effectively distribute its products and services into the wider region. The DIFC offers us an internationally regarded centre of expertise, is geographically well placed for growth and expansion, and offers us a well-established governance and regulatory framework through the DFSA.
We chose the DIFC largely because of the international aspect of it and opening here is part of a “hub” approach we have got, so taking a license outside of the DIFC would not have given us the international aspect, so would have fit only a part of the strategy.
What we have to do as a priority is to establish the business here, lay firm foundations and then look where the other opportunities lie beyond the DIFC as we progress.
During the third quarter of 2013, Standard Life’s Singapore and Dubai offices generated £52m of sales. How much of this was generated in the UAE and what was the biggest driver?
The UAE and Singapore businesses are of similar size. The success of our business to date has been a competitive product from a well-established and trusted brand, that many IFAs in the market recognise and have worked with as a provider in the past. Another key success for us has been the wide fund offering within our savings and investment propositions, in particular the fund propositions from our asset management partners.
Standard Life has a joint venture in India called HDFC Life. What impact has having an established brand in India had on your launch in the UAE if any?
Our joint venture with HDFC puts us in a particularly good position to focus and capitalise on the growing market of NRIs in the Middle East region as the Standard Life brand is already familiar with them from their home market.
With Standard Life being a well-known brand in the UK, especially among financial advisers, I expected a great deal of name awareness and knowledge of what we stand for from the Western expatriate intermediaries. A really pleasant surprise for me was the relatively high name awareness from the NRI distributors that we deal with. This was directly down to the HDFC deal because, until very recently, HDFC was branded HDFC Standard Life and of course the HDFC brand itself is of really high standing in India so that has been a real boon to us.
What has been the biggest challenge for Standard Life in the UAE so far?
It is always challenging entering new markets and it’s the same in the UAE. There are any number of variables such as competitor activity, etc but we know what we have to do to make our business a success and will focus all our efforts on developing our plan.
I don’t think we have encountered anything that we wouldn’t have anticipated. One think to identify is that we are coming into a market as the “new guys in town” and of course the competitors that are here are strong competitors, they are big, well known brands that have been here for quite some time and have got a great deal of name awareness. That is a real challenge for us but we know that if we continue to plug away and do the good stuff that we’ve been doing, that ultimately we’re going to have success.
As a DIFC-based business you are not allowed to sell insurance products. Can you please explain what products you do sell in the UAE?
We believe our products are suited to the current needs of the local market. With our heritage as a leading long-term savings and investment business, we offer capital redemption savings and investment products, where customers are required to take independent financial advice.
Has Standard Life got any plans to introduce any new products to the UAE?
We feel our strong product offering, combined with a wide fund proposition within our products, is unique in the market and we will continue to build propositions that meet the specific needs of our customer groups, but I am unable to share our current plans with you.
Now the company is established in the UAE, do you think there is scope to open further branches across the Middle East?
For the immediate future Standard Life will be focused on ensuring successful integration in those markets that it has recently launched.
Similar to our entry strategy in our new markets, we will consider further expansion based on those markets that provide us with the right regulatory framework to launch a business with a compliant and sustainable business model.
However, where our plans expand beyond that is to take a look at different territories at the immediate GCC neighbours and to see what opportunities there are there to intermediate business through the DIFC from farther flung areas.
I wouldn’t say that we are focused only on Middle East expansion as we have opportunities with the DIFC residency to allow us to intermediate business back to our Irish business from much further afield than just the immediate neighbours.
What other plans have you got for the UAE business?
The UAE and the wider Middle East region is a long-term commitment for us and we have allocated resources accordingly.
It comes back to building on our brand strength, and being known for what we do well, both in the products we offer but also in the investment solutions which we can provide, which will be a key focus of our strategy in 2014 and beyond.
Chris, on a personal level, how have you found your first year working and living in Dubai?
Dubai is a great place to live and my family are really enjoying the experience. Working here is very different from the UK market but there’s a real energy about the place and we know we’ve made the right decision to set up shop here.