Fintech Consulting



FinTech has become key enabler for the financial services sector, transforming every facet of a strongly regulated industry. The transformational nature of the FinTech space often warrants agile and compatible solutions. We constantly engage with industry experts to keep abreast of the latest developments in the industry to provide our clients with solutions that create value in a rapidly advancing market. Our prior engagements involved extensive collaborations with regulatory authorities that encompassed research in terms of market assessment, market readiness and acceptance of FinTech and other similar technologies in regional markets.

Has the role of Fintech become more critical, given the pandemic?

With the subsequent waves of the COVID-19 in place, it might take longer than expected for the situation to get back to absolute normalcy. This puts a spotlight on the increasing need for digitisation with Fintech. COVID-19 has certainly fast tracked Fintech adoption, which is very much evident from the data points. According to Mastercard, in MEA region contactless payments has increased by 70% indicating surge in the use of Fintech apps during the COVID-19 global health crisis. In Bahrain use of BenefitPay, a smartphone payments app surged by over 1,000% during the pandemic, with the current registered users representing 28% of the total population. According to PWC, KSA eCommerce platforms Bin Dawood and Danube benefited from online shopping using smartphones with their average sales increasing by 200%, while in the UAE, Carrefour saw a 59% rise in new online customers, since the beginning of outbreak. Moving away from traditional means COVID-19 poses huge challenges for banks, highlighting need for fast paced technological adoption and innovation in sync with the Fintech sector.

What would be an ideal ecosystem for the development of Fintech in GCC?

The key elements of the Fintech ecosystem are talent, government support, funding, and Physical infrastructure (shared spaces, ICT). A study as carried out by S&P Global states that the GCC countries are the most ready for Fintech adoption within Middle East and Africa region. In terms of talent (Human Capital), the region still lags behind countries with the same income level. World Bank study cites that a child born today in the GCC will attain only between 56% and 67% of his or her full health and learning potential and therefore potential productivity by age 18. Talent needs to be nurtured by providing adequate education and training, GCC needs to develop in-house talent pool and provide sufficient opportunities within Fintech space. On regulatory front, the GCC regulators are taking appropriate steps for example, Saudi Arabia aims to reach an e-payment target of 70 per cent by 2030. In January 2021, Saudi Arabia announced that SAMA would go live with its open banking initiative during the first half of 2022, which is expected to facilitate various Fintech services. Bahrain is very active in this regards, putting in place regulations to cover regulatory sandboxes, open banking, crypto-assets, and robo-advisory and payment services. Funding also has been facilitated by various Government initiatives like the DIFC in 2017 launched a $100 million fund to help establish, grow, and upscale start-up and growth stage fintech firms. Similarly, Bahrain Development Bank and the Economic Development Board of Bahrain have launched two separate funds of $100 million each to support Fintech. In terms of infrastructure the GCC region leads Middle East and Africa in terms of internet penetration and basic infrastructure which is reflected in higher ranking for World Bank’s Ease of Doing Business Index, this provides the much needed infrastructure support for Fintech expansion.

What are the latest development in the region within the Fintech space? (M&A, Funding, Unicorns, Start-ups related information)

Some of the notable developments in the Fintech space were as follows:

1. Western Union announced in November 2020, that it has agreed to buy a 15% minority stake in stc pay at an overall valuation of $1.3bn. stc pay is the first Fintech unicorn valued at more than $1bn in the Middle East, this transaction marks the development of the regional Fintech market, and brings its potential to the attention of international investors.

2. UAE based NOW Money secured $7 million funding to expand its business GCC

3. Recently, Saudi Arabia-based Tamara, a Buy Now, Pay Later service provider, confirmed that it has finalized a $110 million Series A funding.

Likewise, the GCC region is abuzz with news related to funding of Fintechs, which is a very healthy sign.

What are the key risks associated with Fintech adoption that the region should be wary about?

Though Fintech brings a lot of convenience and benefits for the society at large, but one also needs to be aware of the potential risks and take appropriate actions to mitigate it. One of the most critical risk for Fintech would be to deal with the regulatory changes. Fintech will also have to consider differing regulations in multiple territories should they operate internationally. Cyber threats like theft and data breaches are also important risks that Fintech needs to tackle, as any slippage here could cost them dearly. In 2017, Equifax one of the three largest consumer credit reporting agency in USA, had a security breach wherein it lost personal details of 145 million Americans due to a website application vulnerability. In GCC, amid the pandemic the cyberattacks have gone up considerably for the region, particularly for UAE which saw an increase in cyberattacks by 250% in 2020. Technology failure is yet another major risk, as it can mean customers are unable to access services.

How has Marmore contributed within this space?

Marmore has always been on the forefront in terms of highlighting the importance of Fintech in the region. We at Marmore understand both finance and technology very well and this blend provides us with the capabilities to deliver on varying client requirements. We helped a client by identifying optimum portfolio of funds on the basis of risk-reward to be included in the client’s robo-advisory platform. For another client, we evaluated the adoption of Open Banking in a GCC Country and provided relevant insights in terms of market penetration strategies. Marmore has also advised a client on evaluation of an investment platform, which entails a seamless experience for the GCC audience in terms of investing online. In terms of publication, we have quite a few publications on GCC Fintech space and we have also helped clients understand the end markets for Fintech adoption by carrying out detailed studies.



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