Collaboration critical for banks and financial companies, financial executives say

Financial Technology [FinTech] Companies are increasingly becoming part of a global banking industry that seeks to find simpler, faster and more efficient services for customers in the ever-changing world of digital finance.

Collaboration is key: banks have customers, which FinTech lacks, while FinTechs have cheaper and more efficient solutions for customers, which banks do not have; by working together, both can benefit.

"Banks and financial technologies share common goals … their partnership can bring valuable insights to the financial services space," said Jayesh Patel, director of Liv., The Digital Bank of Dubai's Largest Lender, Emirates NBD .

According to a joint report released in November by technology company Accenture and the Dubai Accelerator, the financial technology sector in the Middle East and Africa is expected to account for 8% of total financial services revenues from here. 2022, thanks to customer demand and increased investment. FinTech hive

Thanks to financial technologies, "banks can launch new services faster", while "financial technologies are finding new ways to monetize their innovations," added Patel.

"Financial technologies focus on specific issues, solve them, and create an enhanced customer experience. In the end, this allows banks to add more services to their customers, "he said.

Founded in 2017, Liv. signed a multi-year agreement with the Melbourne-based payment innovation service, Verrency, last December, allowing the Dubai entity to take advantage of cost-effective cloud-based payment solutions.

Global payment and financial services giant Visa, which works closely with banks and FinTechs, said the two companies could best leverage the strengths of their competitors to create a "smart bank" model.

"FinTech start-ups can use the resources, infrastructure and size of traditional banks, while banks can leverage the data badysis capabilities and low-cost model to enhance the business." customer experience and reduce operational costs, "said Otto Williams, vice president and director of strategies at Visa. partnerships – financial and business technologies – for Central Europe, the Middle East and Africa.

Visa, headquartered in California, has launched global initiatives such as the FinTech Fast Track Program and the Visa Everywhere Initiative. In the United Arab Emirates, the company is actively exploring different paths for FinTech through its partnership with the FinTech Hive of the Dubai International Financial Center.

The regional interest in financial technologies has risen sharply in recent years, as more and more players enter the market and show how advanced technology can be deployed to reduce costs and better serve customers. .

The Dubai International Financial Center has launched a $ 100 million FinTech fund (MAD 367 million) in 2017 to help new businesses get started and grow their businesses. Similarly, the Bahrain Development Bank and the Bahrain Economic Development Council last year launched two $ 100 million segregated funds to support FinTech start-ups.

According to Bloomberg Intelligence, the United Arab Emirates ranks first with 67 countries leading the list of start-ups in the financial technology sector, followed by Turkey (44), Jordan and Lebanon (30).

Sonny Zulu, head of retail banking at Standard Chartered UAE, said banks and FinTechs complement each other.

"Traditional banks can not keep pace with FinTech innovation … [whereas] they can not stay alone.

"A partnership between them is a win-win situation that ensures compliance with financial regulations and consumer protection while capitalizing on trend innovations," said Zulu.

Founded in 2017, SC Ventures – a wholly owned subsidiary of Standard Chartered – takes minority stakes in financial technology companies through its $ 100 million innovation investment fund. He has already supported FinTechs such as Ripple, which connects banks and payment providers via RippleNet, and Paxata, a provider of data badysis software, with undisclosed amounts.

Last month, the US multinational Citi announced a FinTech challenge for companies based in the Middle East and North Africa

"We use financial technologies with relevant innovative solutions, from existing businesses to start-ups … [will] discover innovative solutions for our customers, "said Emre Karter, head of cash and trading solutions for Mena, Pakistan and Turkey at Citi.

The Citi Mena FinTech Challenge offers the region's technology community the opportunity to offer innovative solutions in different areas such as cash capture, payments and business processes.

Finalists have the opportunity to work with Citi to develop market ready proposals by March 2020.

"By providing the FinTech community with an opportunity to present their ideas, we hope to contribute to the development and growth of the region's overall financial ecosystem," added Mr. Karter.