FTW: How would you describe the MENA banking ecosystem - how were the conditions 10 years ago and where is the region going?
MA: "The MENA region is a very exciting space to be operating in right now. Fintech is only beginning to develop here and the market is pretty much untapped, so we are hoping to serve as an influence for the region to embrace open banking and all the opportunities that come with it. There’s a general trend of growing interest for the kinds of applications that financial technology empowers, from digital wallets and peer-to-peer applications to investment platforms and digital banks. The market is new and rapidly evolving.
In terms of the banking ecosystem, we are seeing traditional brick-and-mortar banks that had little interest in innovating a decade ago, also joining in on the digitization bandwagon. We’re seeing digital banking or similar applications being built by almost every bank in Abu Dhabi and the UAE. In my opinion, banks and fintech are on the verge of going head-to-head to capture the consumer fintech space."
FTW: When DAPI Technologies was founded - what was your plan? What was the major change you had in mind? Why did you set up in Abu Dhabi?
MA: "All three of Dapi’s cofounders came together after encountering the same problem. While trying to build our own fintech applications for personal finance, investment and peer-to-peer transactions in the UAE and Egypt, we struggled to develop financial applications without the infrastructure to connect our applications to banks. Dapi was born out of the desire to provide that infrastructure and to allow other developers, in MENA and beyond, access financial information and create transfers quickly and efficiently.
We set up in Abu Dhabi in particular, as we wanted to join a thriving ecosystem and gain access to a growing tech community. Through Hub71, we were able to gain access to everything we needed—capital, a start-up license, market opportunities and a highly skilled talent pool. Support from Hub71 and Abu Dhabi Global Market also meant we could grow and scale our business through connecting with other partners."
FTW: Do you consider open banking to have a revolutionary impact on the financial system? What are the values ?
MA: "Open banking powers bank connectivity, which lies at the heart of many fintech products and services. The lack of bank connectivity means that you cannot have products like Venmo, Acorns, Mint or any other platform that relies on connecting to the users bank account. Given that most top innovative fintech applications around the world rely on bank connectivity, the lack of this infrastructure gives little room for innovation and thereby limited products and services. It’s infrastructure like open banking and banking as a service (BaaS), which Abu Dhabi has embraced in the region, that will really revolutionize fintech globally, by making it ridiculously easy for anyone to launch fintech products. Traditionally, this space has been difficult, as it requires regulation, licensing, partnerships with financial institutions and other nuances that make it difficult to even launch a product."
FTW: Your personal opinion: How do traditional banks have to collaborate with Fintech startups and integrate Fintech innovations in order to stay successful? Where do you see considerable backlog?
MA: "In terms of traditional banks, we have banks with two mindsets. First there are the ones that are fintech-friendly and want to partner with fintech companies as they believe it will indirectly expose them to a greater footprint with certain types of customers that they do not currently have, which will then result in higher revenues. You’ll find that a number of banks in Abu Dhabi fall into this category such as Mashreq Bank, First Abu Dhabi and other financial regulators, which has made setting up in Abu Dhabi even more appealing.
The other type of bank is the one that sees fintech as a competition and therefore wants to quickly try and compete for market share in the neo bank space, and peer-to-peer payment space, etc. Unfortunately, we feel like there are more banks that are currently trying to compete with fintech rather than partner with them. Traditional banks need to start believing in collaboration, whereby they need to understand that partnering with a fintech to sponsor their payment license, or pin number for card issuance or other similar collaborations will only result in better long-term outcomes for the entire ecosystem".