American Express, the US financial services and credit card firm, is targeting single-digit revenue growth in the Middle East this year, as it boosts its number of merchant partnerships and launches new products and services amid higher consumer spending.
"The reason we are seeing growth is because we are expanding and targeting new segments and introducing new products," said Mazin Khoury, chief executive of American Express Middle East, in an interview with The National. "It's not double-digit growth, but we are seeing growth in spending overall in the region and believe that will continue."
Mr Khoury was unable to disclose the current average transaction value for Amex card users in the Middle East – globally in 2016, it was $141 – and said growth in spending overall “does not necessarily translate into higher transaction values”.
Corporate spending worldwide is forecast to rise in 2019, according to the preliminary findings of Amex’s 2019 annual Global Business & Spending Outlook for Mena. Approximately 42 per cent of global senior executives surveyed for this year’s report between November and December last year said they anticipated increasing corporate spending by 8 per cent or more in the year ahead.
The largest proportion (27 per cent) of respondents said they planned to increase spending by slightly less than this, between 6-8 per cent.
Some 40 per cent of respondents in each of the UAE, Bahrain and Saudi Arabia said they planned to increase spending by more than 8 per cent – representing a “seismic shift in spending and investment plans by corporates”, according to Sam Knox, managing director of Institutional Investor Custom Research Group, which partnered with Amex to conduct the survey.
Of the total, 78 per cent cited meeting customer needs – such as by increasing production capacity and launching new services – as their top priority for investment, while 47 per cent cited entering new markets. Many respondents said they are investing in emerging technologies to streamline their operations and focus on the next generation, the study showed.
Some 66 per cent of executives in the Middle East said they had made investments in artificial intelligence – up from 40 per cent in 2018 – and 44 per cent said they had invested in FinTech, up from 27 per cent in 2018.
Amex's Middle East division this year rolled out a corporate accelerator programme where FinTech start-ups were challenged to devise solutions to specific problems Amex was encountering, for the chance to win a formal supplier contract with the firm.
“We are now in discussions with one or two of these companies – and that will translate into new products, solutions and enhancements for our customers,” Mr Khoury said.
The general bullishness on corporate spending apparent in Amex’s report reflects a predominantly optimistic macroeconomic outlook among survey respondents. Almost three-quarters (72 per cent) said they expected either modest or substantial expansion in economic growth in 2019, while 67 per cent said their company revenues were higher than they had been in the preceding 12 months.
In the Middle East, the outlook (71 per cent) is in line with expectations worldwide but down slightly from the previous year, when 92 per cent of respondents said they expected either a substantial or modest expansion in economic growth.
This is largely to do with oil price fluctuations, Mr Khoury said. The outlook could have changed by now compared to six months ago when the survey was conducted as global trade tensions have intensified, although regional economic growth has accelerated, he noted.
