The Insider CEO with a Midas Touch

Abu Dhabi: After launching its retail business in India way back in 1999, UAE Exchange has been aggressively expanding its network across the country. As part of this, in October 2003, the company organised its first-ever global conference in India. Dr. B R Shetty, Founder and Chairman of UAE Exchange and NMC Healthcare, was leading the event in which the who’s who of the business from all over the world participated. One among Shetty’s employees, a Manager (Accounts), was assigned to present a paper on the growth and development of UAE Exchange, at the event. Seeing his performance, the visionary in Shetty quickly spotted his leadership capabilities. And soon, he was invited to join the global team in United Arab Emirates (UAE). Twelve years later, in March 2015, the Malayali Chartered Accountant from Nenmara in Palakkad district became the CEO of UAE Exchange.

Today, Promoth Manghat, 40, leads UAE Exchange, a company in the billion-dollar league having direct presence in 45 countries and employs more than 16,000 people. To put things in perspective, in 2003, UAE Exchange did business in five countries with around 100 branches. Now, it has emerged as the second largest money transferring company in the world.

Joining the financial services provider, UAE Exchange, at a young age, he rose to head the firm by proving his merit and leadership acumen. Today, Promoth Manghat is CEO of UAE Exchange’s global financial empire. It is his fire in the belly and die-hard commitment that have shaped his meteoric rise to the top. Here, he finds time to speak to Destination Kerala about his inspiring career as well as the company’s ambitious growth plans.

Having started his career as the Internal Controls Assistant Manager at Alstom Limited, Promoth Manghat joined UAE Exchange in April 2001. He served as the firm’s Financial Manager from November 2003 to September 2005. During the restructuring of business in 2005, Promoth was shifted to operations and was later elevated to the position of Vice President Global Operations in 2008. He became the Deputy CEO in December 2014. Spearheading the brand’s expansion, Promoth was instrumental in the decision to acquire Travelex, the British foreign exchange business, which then added another 1,500 branches and 8,000 employees to Dr. Shetty’s financial services portfolio. His elder brother, Prasanth Manghat, is CEO and Executive Director of NMC Healthcare.

In an exclusive interview with Destination Kerala, the ambitious business leader shares everything about his professional journey and vision.

Your three main business verticals are Remittances, Forex and Payments. Explain how each of them is faring?

Money transfer is the biggest in terms of volume followed by Forex and Payments. But in terms of growth, Payments is the fastest growing vertical now. Overall, our growth rate stood at 12 per cent in 2016. We are the world number two in terms of market share with close to $30 billion so far as remittances are concerned. We handle 100 million transactions in a year globally. Payments have been growing fast in the last five years. It is really catching up. Earlier, if somebody wanted to remit their money into India, they had no other option but to put their money in a bank. Now, we are offering new services wherein customers can pay their telephone bills or utility bills in India from anywhere in the world. With Travelex coming in, our foreign exchange business has also entered big league.

India is the largest market for us in terms of remittances. In 2016, we transferred around $7.2 billion into India. This constituted almost 11.5 per cent of remittances into India. Our other big markets include China, Pakistan, Bangladesh, Philippines, Sri Lanka, Nepal, Indonesia and Egypt. We enjoy a major share in remittances into South Africa, Kenya, Uganda and Nigeria. Same is the case with South East Asia. We have been operating in Malaysia for quite a long time. We entered the Singapore market in 2016 by fully acquiring an existing operator there. We consider it as a big stride since Singapore is one of the most advanced regulated markets in terms of financial operations. We also bagged the licence to operate at Singapore’s Changi Airport. In Thailand, we have entered into a JV with a company called AIRA, a prominent financial institution there. We will soon commence operations in the Thai market. We are also planning to make a foray into Tanzania and Spain this year.

As a Group, we have 16,000-plus employees now. A substantial number of employees in the Gulf are Keralites which would come to around 25 per cent. In India, we have 450-plus branches. But our services are available in close to 50,000-plus locations in the country. We work with almost all the banks in India.

How is the merger with Travelex progressing?

It is going on well in terms of commercially integrating the two businesses from a technology and products points of view which is the most important thing. Things are on course. Definitely, the vision of shareholders is to go for an IPO and the strategy has already been set. At the right time, we will make the announcement.

With the Gulf economy sliding, remittances are on the decline. How does this impact your overall business?
In the last two months, remittances are going flat since the rupee has been comparatively strong against the dollar. Normally, first half of the year is quite silent. Now, with the festival seasons beginning, things will change. On a yearly basis, our remittance figures are up in 2017. The World Bank has published a report that remittances into India had declined last year due to low oil prices and weak economic growth in the Gulf. However, at UAE Exchange, we have seen an increase in remittance business. This may be due to our inorganic growth as well.
2017 definitely gives an optimistic picture. The general outlook is that the full year growth is likely to be stronger as world economy is more certain now. Unlike in 2016, Gulf markets have come up and there is not much volatility. We are seeing solid public infrastructure spending by governments in the Gulf.

With digitisation transforming every industry, what are your investments in this direction?

One of the things that we have been focusing on in the last three years is digitisation. We have been working towards bringing out more digital products and tools. That is definitely an important agenda for 2017 as well. We aim to spend between $250 million and $300 million on acquisitions to expand the Group’s global market share. Currently, we have a share of 6.75 per cent in the $442-billion global remittance industry to developing markets. The plan is to increase our share to more than 10 per cent by 2020. We are working with consultants to explore acquisition opportunities as well as strategic investments in remittances and payments space with specific focus on Fintech and digital.

We have a successful travel pre-paid programme with multi-currency facility called ‘gocash’. A customer can include six different currencies on the card from a select list of 21 currencies. Recently, we have partnered with Oberthur Technologies (OT) to explore contact-less payment via wearable devices, which is soon going to be a common practice. This is powered by Flybuy MiniFOB technology of OT, a leading global provider of embedded security software products and services and an award-winning innovator in the payment sector. It is a mini contact-less card of dimension 2FF SIM-size (15x25mm), including an antenna and a chip with payment functionality. It can be inserted into a prepaid card, wristband, a key chain, jewellery, fitness trackers, watches or any other wearable items, thus allowing a seamless, secure and stylish payment option on the go.

We have also done a series of investments in companies focusing on digital including Blockchain technology – Loyyal. It has also aquired business in multiple locations, including South Africa, Singapore and Brazil. The acquisition of online remittance business Remit2India, having over five lakh customers, mainly Indian expatriates, in the USA, the UK, Canada, Australia and various other countries, has significantly helped expand the digital remittance business of UAE Exchange as well as improve our customer proposition across these markets.

How serious is the threat of hacking and compromising of customer data in your business?

Two major risks which we have to deal with in our business are money-laundering and cyber security. To counter cyber attacks and safeguard data, we have invested extensively in technologies and people. We have very structured mechanisms to assess the vulnerability of systems. We use international protocols in terms of standards and frameworks. Also, we have made arrangements to adopt the best practices by associating with global agencies that have exposure in this field. Anti-Money Laundering (AML) compliance is definitely an important aspect. At UAE Exchange, our objective has always been to strengthen our ability to fight financial crime by investing in proven compliance and monitoring systems. We do not want our system to be used knowingly or unknowingly or directly or indirectly by any person or players who are on the wrong side of the law. Hence, we take a lot of precautions when we make investments in process, technology and people. Currently, we associate with NICE Actimize to provide real-time alerts against money laundering and fraud scenarios.

How do you identify new markets?

We follow the macro parameters. If you look at money transfer, the biggest macro parameter is the number of expatriates. There are two aspects – the number of people migrating into a country and vice-versa. For forex, the macro flow that I will track is the number of tourists – the number of people going out and the number of people coming in. On the payments, I look at the movements in trade. Based on these macro indicators, we identify the markets. The next step is the evaluation of regulations existing in those places. Based on that, we will assess the risk associated with it. We not only look at the risk in operating at that particular market but also the impact it may create in our existing markets. And then we consider if we should invest directly or require a JV partner. In some markets, we need support from within. For instance, in Thailand, we are going there with a JV, while we are directly investing in Tanzania. Once we have clarity, we think about the business model to be adopted for that particular market based on its potential. Accordingly, we chalk out a three-year or five-year plan. Once we receive the required sanctions, we kick-start hiring people and devise the right marketing strategy.

What is your opinion about Kerala’s KIIFB model?

If the State Government is able to find right instruments (could be bonds) and if it is able to channelise that into appropriate infrastructural projects which are revenue yielding, it makes sense. In Kerala, KSFE’s chit schemes are a successful model. We have been pushing the idea of exploring the possibility of expanding it for expatriates (NRKs) as well. During one of his visits to the UAE, we had presented the concept before Dr. T M Thomas Isaac, the State’s Finance Minister. He was quite interested and asked us to do a detailed study. We did a very detailed analysis and survey to understand the interests among the people and presented a report to him.

Whether this money will be utilised for funding infrastructural projects or not is a different issue. We definitely see this as a savings instrument for NRKs. One of the challenges the State government always faces is the rehabilitation of Gulf returnees. How do you ensure that they get good jobs once they return to their home State? That is why we believe that chit schemes are a very good and manageable option. In the process, if the government could use it for infrastructure development, well and good. But KSFE should be able to provide assured returns to the investors.

You have supported the PM’s demonetisation drive but has this not impacted your core business?

Post-demonetisation has witnessed a huge jump in usage of our pre-paid travel cards ‘gocash’ in India. Expatriates travelling to India have started using these cards in a big way. The convenience of holding up to Rs. 4 lakh in these cards enables travellers to carry out cash transactions in the country, especially during the cash crunch period. Besides, the digital wallet – Xpay – has also been receiving encouraging response from domestic Indian customers who want to go for merchandise payments and domestic transactions. Going digital has helped us achieve a regulatory comfort. Many of the matured markets, such as the UK, US, Australia, China and even some GCC countries have already adopted the digital way of cash transactions. Now in India, as a consequence of demonetisation, there will be a revolution in payment business and the country will see new business models. However, there would be some operational problems, which can be overcome with people’s behavioural changes.

Are you seeing a play in India especially as a Payments Bank?

We have never explored Payments Bank model. Our view is that Payments Bank as a business model is definitely challenging. The model is without lending option and there are limitations in terms of the amount of deposit that you can accept as well. Hence, sustenance of the business would be really challenging. UAE Exchange India is planning to approach the RBI for licence to set up a Universal Bank. Our earlier attempts to secure licences for running Universal Bank and Small Finance Bank in India did not succeed.

Looking back, what have been the key learnings for you?

The first one was adapting to a global business which requires a clear understanding of differences in terms of culture and ethos of different regions. It was definitely a challenge to make sure that you work in harmony with people from different cultural backgrounds. Another challenge was the kind of complexity it brings when you are operating in different countries. The only way to minimise the complexities is to keep things simple. For this, I continue to invest a substantial amount of time in planning things. One of the key learnings had been the realisation that time is money. That was when the importance of discipline and efficiency came in.

Is Dr. Shetty your mentor?

Of course, in my professional life Dr. Shetty is a major source of inspiration. I have had the honour of working with him very closely. His energy and enthusiasm are very contagious. The kind of tenacity and mindset with which he approaches problems is amazing. He is a self-made entrepreneur. He has been able to nurture entrepreneurship culture in the company. People stay here for long. I am here for 17-plus years. There are people who have been serving for the last 25 years.

“Promoth Manghat is a very aggressive and committed person,” says V George Antony, Managing Director, UAE Exchange-India. It was George Antony who interviewed Promoth while the latter applied for a job in the company. “He got a 360 degree exposure during his tenure in India. Once he undertook to lead the global operations of the company, Promoth has changed its course. He completed end-to-end automation, finetuned the system and processes, and ensured that things were progressing as per his plan. He effectively utilised the extensive exposure he received. This coupled with the freedom he got to work took him as well as the company to greater heights,” says George who feels that the decision to acquire Travelex was a daring act. “It really needs a lot of courage and mental strength. That revealed the visionary in him. He never involves in everything. He focusses on certain things and never deviates his attention from those. Nor does he allow others to deviate from the goals set by the company.”

What is your leadership style?

One of the ways to grow is to create more leaders. I prefer that. You should empower your team mates and trust them. As the organisation grows, you need to create a structure of governance. I spend quite a lot of time internally sitting in various decision-making meetings. I stay close to business and am a very hands-on person. I travel a lot meeting my team as well as customers to understand market realities.

Does money bring you happiness?

Jack Ma, the founder of China’s internet conglomerate Alibaba, said that beyond a certain point the money you have is not yours. It has to be with the people. I hail from a middle income background. My parents had invested in my education much beyond their capabilities. Education has brought me enlightenment as well as money. It is something that is to be shared.

Hence, I invest in NGO activity, education and primary healthcare. Me and my elder brother, Prasanth, are funding a primary hospital and a tribal school in Nenmara. We are doing it with the support of Uma Preman, a social activist. Being a native of Palakkad, we wanted to do something for that place. It started last year. It is a mini hospital now. The master plan is to grow it into a 175-bed hospital with 40 to 50 doctors in the near future.

Could you please share details of CSR activities?

As far as the Group is concerned, CSR activities are part and parcel of our business. Dr. Shetty leads it from the front. The key aspect is you cannot excel and flourish if your surroundings are not like that. We work with UNESCO and UN Food Programme. In the event of any kind of natural calamity, we support the victims. Also, we are a key player in bringing financial inclusion. Our customers are largely from the bottom of the pyramid. We do a lot of awareness programmes promoting the importance of inculcating savings both as a culture and habit.

What is your advice to young entrepreneurs?

You should have the courage to face things. In the long run, every day will be different. There will be bad days and bad moments. You should have the courage to overcome those. Humility is very important. Accept the fact that all decisions that you take may not be right. Accept immediately if you do not know something. Accept that there are better people and better ways to do things. The third factor is discipline, which I need not have to explain further.

How is your usual day like?

Every morning I spend some time to plan my day but I am not obsessed with schedules. Being an entrepreneur, I am flexible. I read dailies in apps to make sure that I am up-to-date. I am active on social media. I start at 9 am to office and it may go up to 7 pm or 8 pm in the evening. I also spend a lot of time interacting with regulators, partners or customers. I am quite active in the community space. I do not spend time on the golf course or at clubs. That is my habit. If there is no official commitment or social activity, I prefer to go back home. There will be conference calls late in the evening or early in the morning. I do not try to distinguish between work and life. I am responsible for 16,000 people and I try to go hand-in-hand with them. Also, I am very fortunate to have a very understanding family.