Can banks play the fintech game?

Fintech may seem like a millennial uprising, but truth be told, the deployment of technology to facilitate financial offerings has been around for decades with credit cards finding their way into consumer pockets in the 1970s, and online banking into consumer lives in the 1990s.

- ZAINAB MANSOOR

But what has been key in recent years is the growth fintech has achieved, fuelled by three core drivers: technology – which has allowed financial services, once an industry traditionally built on fixed assets, to scale operations virtually; customers – who are demanding more from their financial providers; and regulations – that have curbed lending options for banks, in turn encouraging startups to offer engaging alternatives.

Banks worldwide, at the very least, have had to re-assess their digital strategies and subsequent collaboration with third-party service providers to stay relevant.

Regionally, financial institutions have well recognised the need for the integration between finance and technology, and have entered the arena in a big way. In 2017, Dubai’s biggest bank Emirates NBD unveiled Liv., a digital lifestyle banking app, part of the bank’s $136m planned investment towards digital innovation and multichannel transformation. UAE’s Mashreq Bank launched Mashreq Neo, its full-service digital bank the same year, allowing users to make their investments on the move. Meanwhile, Bahrain’s Gulf International Bank launched meem, which is claimed to be the Gulf’s first Shariah-compliant digital banking service.

Taking into account that around 65 per cent of UAE SMEs consider banking a challenge, Mashreq and Emirates NBD rolled out digital banks – Mashreq’s NeoBiz and Emirates NBD’s E20., to enable SMEs and startups to access banking services seamlessly.