Arabnet The Quarterly Issue 12 | Spring 2017

MENA BUSINESS

REPORTS

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LETTER FROM THE EDITOR

THE FINTECH & BANKING ISSUE We’re thrilled to present you with this special edition of The Quarterly that revolves around the digital revolution in the banking and finance sector across the MENA region.

Rita Makhoul Managing Editor

@rampurple

Digital innovations and fintech startups, are coming in to disrupt the industry. Many banks are embracing the evolving ecosystem and partnering up with new players to take advantage of the new opportunities opening up. There are signs that banks are beginning to embrace agile development, which is a massive internal culture shift.

The branch has been the center of the banking experience for decades, but today technology and consumer expectations has transformed the branch to just one touch point among several within a holistic customer-centric experience. We explore how banks have been embracing new technologies and redefining how, when, and where customers interact.

We have found that there are over 50 fintech startups across the region so we decided to map them out in their categories in this issue. We spoke to their founders, investors, and banks to investigate the current state of the fintech ecosystem across the region.

As always, I hope you enjoy this issue, and do let me know if there are any topics you would like to see covered in the future. It’s my wish that The Quarterly will become an essential part of your professional life, a resource that you depend on to keep up with the rapidly evolving world of digital technology.

Until next time!

Wishing you all a wonderful new year.

CONTENT ISSUE 12 APPS FOR TRANSPORTATION USEFUL A Round-Up of Taxi-Booking Apps for Residents in MENA INDUSTRY STORIES

4

Industry News

BUSINESS

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ADOPTION IN MENA

TECHNOLOGY

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Digital Banking Adoption in MENA

Banking on a Digital Future`

24 20

Future of the Branch

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CEO Series: Abdelmalik Al Sheikh, CEO of SADAD Payment System

DIGITAL MEDIA

ENTREPRENEURSHIP

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40

30 34

Understanding Saudi Credit Card Ownership

44 The Consumer Journey to Acquire a Credit Card

The Fintech Innovation Ecosystem in MENA

Most Funded Fintech Startups in MENA

The Future of Customer Experience

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Fintech Startups in MENA

FINTECH STARTUPS IN MENA

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10 MENA Fintech Startups to Keep on Your Radar

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INDUSTRY STORIES

USEFUL APPS FOR TRANSPORTATION

INDUSTRY NEWS

A Round-Up of Taxi-Booking Apps for Residents in MENA

Careem Valued at $1 billion on STC and Rakuten Deal In December, Saudi Telecom (STC) agreed to buy a 10% stake in Uber’s regional riding-hailing app rival, Careem, for $100 million, giving the company a valuation estimated at $1 billion.

According to Reuters, the transaction is conditional on meeting all requirements to close the deal – the STC bourse filing said without elaborating.

With this announcement, Careem closes $350 million in investment which includes Japanese e-commerce firm Rakuten, part of a $500 million first funding round. Careem began operations in 2012 and is present in 45 cities in 11 countries across the Middle East and North Africa, including Turkey and Pakistan with more than four million users registered through its mobile app. The announcement is the latest high-profile Saudi venture since the kingdom’s adoption of the Vision 2030 plan to diversify the oil-dependent economy and broaden its investment base. In June, US-based Uber announced that Saudi Arabia’s Public Investment Fund, which also holds a 70 percent stake in STC, would inject $3.5 billion to help the app’s global expansion. STC, the kingdom’s biggest operator by subscribers, with more than 100 million customers in nine countries, has already invested in Careem through STC Ventures, an independently managed venture capital fund of which the Saudi telecom is an anchor investor. Investors in Careem’s earlier funding rounds include Dubai-based Wamda Capital, BECO Capital, and Saudi Arabia’s Al Tayyar Travel Group.

Innovation Platform startAD Launches Incubator Abu Dhabi innovation and entrepreneurship platform startAD launched startAD Incubator, granting emerging startups access to leading UAE industry players and opportunities for business viability testing. Anchored at NYU Abu Dhabi, startAD is a partnership between the university and Tamkeen, a subsidiary of the UAE Executive Affairs Authority.

Offered twice a year for 10-15 teams per cycle, startAD Incubator delivers a four-month incubation program. Services include seed investment, shared space, mentorship, and legal assistance. startAD website started accepting applications in January 2017, and the first batch will be taking up residency at NYU Abu Dhabi in September. Earlier in August, startAD launched startAD Forum offering free lectures that are open to the public, a digital and business literacy program, network sessions, and legal clinics to help understand the legal framework for startups in the UAE.

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Sihatech Wins 1st Place at ArabNet Riyadh Startup Battle 10 entrepreneurs took to the stage at the Startup Battle and presented their innovative products and services in front of a panel of high caliber judges and an audience of investors, media, and entrepreneurs. The top three winners of the Startup Battle who qualified to take part in ArabNet’s first Startup Championship in Dubai are: healthcare platform Sihatech, beauty services marketplace Spoilee, and smart phone medical consultants Cura. The three startups will have booths during the ArabNet Digital Summit 2017 in Dubai. Automated Arabic language platform Dhad Spell Checker won the People’s Choice Award. Furthermore, 10 aspiring entrepreneurs received the chance to pitch their ideas to judges and investors for the Ideathon Competition and winners received cash prizes to help convert their idea into an upand-coming startup. Warsha.com, an electronic platform for car maintenance workshops took first place, while Ranam, an interactive app that offers an exciting gamified experience of different colors of music, and Hebli, a marketplace/ logistics platform, took second and third places respectively. The People’s Choice Award went to Database Service App, a mobile application that will constitute of a single repository for all type of services a customer needs. ArabNet’ annual Battle of the Games that takes place in Riyadh featured the participation of 4 game developers going head to head while showcasing their innovation. Saudi Cards took first place for an augmented reality cards game that features a fluctuation of players’ net worth (changes within a top billionaires list) within a traditional Saudi souq theme, while the People’s Choice Award went to Ship Stations, an endless runner’s game of a spaceship in a space station that was produced with the 3D unity engine.

INDUSTRY STORIES

USEFUL APPS FOR TRANSPORTATION mrUsta Secures AED 2.75 Million Pre-Series A Funding

A Round-Up of Taxi-Booking Apps for Residents in MENA

Dubai’s online services marketplace mrUsta successfully closed an AED 2.75 million pre-series A funding round. Investors include Precinct Partners, Millennial Partners & Co., and angel investors from Saudi Arabia and Egypt. This comes on the heels of its AED 1.2 million seed funding in August 2015. Founded in 2014, mrUsta is an online marketplace that connects service providers (‘Ustas’) to customers in need of their services. The Ustas pay a fee to contact the customers and send them quotes in a marketplace that is enabled by a user-friendly website and app (iOS and Android). With no middlemen and no fees, customers can directly and efficiently communicate with service providers to finish all their tasks from painting their homes to moving, cooking, and mowing the lawn. mrUsta currently has 10,000 customers a month and over 6000 active Ustas across 300 categories. It has been awarded with a host of recognitions ever since its launch, including, placing fifth on Forbes Middle East 50 UAE Startups to Watch list, and more recently was recognized with the Life Admin App award at the Shortlist Dubai App Awards. The financing will be used to accelerate growth and expand the platform to key regional markets which have been witnessing healthy competition among service providers such as the Dubai-based Swiffix and the Alexandria-based Fixawy.

Yoox Net-A-Porter Enters Middle East Market Italian online fashion retailer Yoox Net-A-Porter (YNAP) and Mohamad Al-Abbar will form a $139 million luxury retail business in the Middle-East. YNAP will hold 60% of the joint venture while the remaining 40% will be owned by Symphony Investment, a luxury store controlled by Al-Abbar. This new joint venture will manage all the existing multi-brand online stores of the group in the region: Net-A-Porter, Mr Porter, Yoox and The Outnet. It will also operate in the GCC and will expand to other MENA countries in the future. They will start operating in a Dubai office with a distribution center by the end of 2017 and the debut of Yoox and The Outnet will be in 2018. Afterwards, Net-A-Porter and Mr Porter will launch in 2019, followed by select online flagship stores. AlAbbar is set to launch the MENA’s largest technology fund, which aims to collect investments worth $1 billion to drive Arab tech-entrepreneurship and create a ‘sharing economy’ business model and will be the first in the region. In addition, Al-Abbar announced last November a partnership with Saudi Arabia’s Public Investment Fund to launch the region’s biggest e-commerce platform, Noon.com, at an initial investment of $1 billion.

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BECO Capital Leads a $5 Million Round of Funding for Vezeeta Regional tech venture capital firm BECO Capital announced that it has led a new $5 million round of funding for Vezeeta, an Egypt-based healthcare technology startup. This marked BECO Capital’s first investment in Egypt. Vezeeta is pioneering the shift to automated physician, clinic, and hospital bookings. Available on desktop and as a mobile app, Vezeeta eases the accessibility of booking a doctor’s appointment, allowing the user to choose a doctor by specialty, geographic area, insurance purveyor and fees. With more than 20,000 patient reviews and ratings available on the platform, users can readily determine the doctor with the best medical service and the least waiting time. Once the doctor is chosen, the patient can either book automatically from the website, the mobile app, or contact the call center. Additional investors in the round include Vostok New Ventures, TDF, and Silicon Badia. Currently, Vezeeta covers three Egyptian cities with ambitious expansion plans to integrate additional MENA countries in the region, moving into the UAE, KSA, Jordan, Lebanon, Morocco, Kuwait, and Qatar over the next 12 to 18 months.

Speed@BDD Holds Its Third Demo Day In December Speed@BDD held its third Demo Day at the Lebanese American University (LAU), in collaboration with the university’s Alumni Relations Office. Five startups pitched their businesses and showcased their products in the presence of more than 250 investors, officials, students, and media representatives after completing the three-month acceleration program. During its acceleration cycle, Speed@BDD invested in each startup $30,000 in cash and its equivalent in-kind services covering free hosting, product and business development, financial advisory, legal services, and mentorship from key experts in various industries. Speed@BDD’s new Global Accelerator Network (GAN) membership has provided founders with numerous advantages on a global scale, as Speed@BDD recently sealed the deal with its strategic partner, the Beirut Digital District (BDD), to offer its startups free hosting at the heart of Beirut after their graduation – with 6 months of free desk space and preferential discounted rates on the following 6 months of hosting. The third batch included: Dentiflow is a cloud-based practice management software tailored for dentists. Parkr is a mobile platform designed to provide commuters with simple means to locate and reserve parking spaces. Petriotics is an online platform that allows pet parents to discover high quality pet supplies and ship them straight to their doorsteps. Tradimum is a cloud-based work management platform for small and mid-size businesses. And Wango® (short for «Wanna go») is a women-friendly dating app that allows users to engage in conversation and plan the first date while recognizing a ‘Gentleman’ within the parameters of manners, respect, and safety. Startups at the Idea or Minimum Viable Product stages, willing to commit to the three-month acceleration in Lebanon can start applying to Speed@BDD’s forth batch which will commence in March 2017.

Seedstars MENA Summit Is Launched in Bahrain

Last December, Swiss-based startup competition for emerging markets, Seedstars World, and business accelerator CH9 organized the first regional Seedstars MENA Summit in strategic partnership with Bahrain EDB and Tamkeen. The winning startups from 10 countries will travel to the Global Summit in Switzerland on April 6, 2017. Startups from Tunisia, Egypt, UAE, Qatar, Jordan, Lebanon, Turkey, and Algeria pitched in front of an audience of 200 entrepreneurial representatives, investors, and media. Prior to the conference, Seedstars hosted a 2-day Bootcamp with mentors and investors from Africa, Europe, the US, and MENA, to improve startups’ business models, growth strategy, and to master the investor pitch. The winners will compete with 65 startups from around the world for investments and prizes over $500K.

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INDUSTRY STORIES

USEFUL APPS FOR TRANSPORTATION DIFC Launches ‘Fintech Hive’

A Round-Up of Taxi-Booking Apps for Residents in MENA

In January, Dubai International Financial Centre (DIFC) and Accenture announced the launch of a fintech accelerator in Dubai. Set to launch in the first quarter of 2017, Fintech Hive at DIFC will bring cutting-edge financial services technology to the Middle East, Africa, and South Asian (MEASA) markets, while providing a platform that brings financial services and technology firms together. Its goal is to increase access to improve customer experience and drive operational efficiencies in the financial services sector. The global fintech sector has attracted more than $50 billion in investment since 2010, but currently the MENA region has only attracted around one percent of that investment. Accenture was chosen to set up and operate the DIFC Accelerator because of its experience and expertise in building and running fintech innovation labs in 2010 in New York and London, and in 2014 in Hong Kong and Dublin. Globally, the Labs’ alumni companies have raised more than US$386 million in venture financing after participating in the program. Fintech Hive at DIFC will start with a 12 week accelerator program bringing together entrepreneurs to compete and address the growing needs of the region’s financial services industry, using innovative technology solutions. It intends to catalyze the growth and efficiency in a variety of areas including trade finance and alternative finance such as P2P payments, and Sharia-based services. Emirates NBD and Mashreq will be the first local financial institutions to join the accelerator program, while HSBC and VISA are the first international financial services providers.

‘Netflix Offline’ - A Forward Push for Middle Eastern Markets?

During the CES 2016 technology show in Las Vegas, chief executive Reed Hastings officially announced Netflix’s big plan to offer online streamed services to over 130 countries worldwide. Netflix’s first onset of downloadable videos in 2016 has been met with applause from UAE & Middle Eastern residents who were finally able to stream their favorite TV shows such as ‘Orange is the New Black’ and ‘House of Cards’ right to their computer devices and portable tablets on-the-go.

However, when it comes to offline streamed services in the Middle East the introduction of ‘offline streamed video’ is expected to witness different tides. In the more commercially developed countries such as the UAE, Bahrain and Qatar who house over 90 per cent internet penetration rates, the usage of an offline video streamer is expected to settle as ‘second option’ due to high internet accessibility and quality rates across different parts of the country (The Middle East Statistics, 2016). On the other hand, countries who either suffer from limited interact access points or floaty internet connections in other fragmented cities of Egypt, Lebanon, and Jordan will greatly reap the benefits of downloadable videos without the need for direct internet access. Moreover, other content streamers present in the Middle East such as icflix and Cinemoz are also expected to follow track once the success of Netflix’s offline streamed videos fleshes out over the course of the years. Ultimately, no one can deny the powerful potential of over-the-top content (OTT) on the digital sphere. Last year, global subscription revenues tipped a sizeable 32.3 per cent rise to $10.9 billion with video-on-demand consumerism.

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INDUSTRY STORIES

USEFUL APPS FOR TRANSPORTATION Flat6Labs Abu Dhabi Showcases Startups at its 3rd Demo Day Event

A Round-Up of Taxi-Booking Apps for Residents in MENA

Flat6Labs Abu Dhabi, the digital media accelerator supported by twofour54 Abu Dhabi introduced 8 new startup companies in its third Demo Day in December. The Demo Day took place at Abu Dhabi Global Market with the aim of developing the fintech space in Abu Dhabi. In addition to the diverse group of entrepreneurs that went through the four-month accelerator program in Abu Dhabi, the third Demo Day also hosted three fintech focused startups from Flat6Labs’ Fintech Accelerator Program currently taking place in Cairo, Egypt. The eight presenting startups displayed diverse products and services: Ella, a curated newsletter and content platform for young women in the Middle East, Heero, an eSports Fan Engagement Platform helping teams engage, understand and monetise their fans, Narrativa which transforms data into natural language reports and news using Artificial Intelligence; Riyash an online platform that creates a marketplace for emerging furniture designers.

Skylar Labs enables customer engagement through intelligent chatbots through its platform, Hyphen. Card Switch, an antifraud & personal card management mobile application. Moneyfellows gives individuals access to interest free credit and helps them reach better saving achievements, and Olly, a digital credit card app for students and young people.

An Autonomous Art Making Bot from Lebanon Joins the Scene Lebanon is known for a rich, vibrant, and contemporary art scene, from the posh galleries of Down Town and Ashrafieh to the elusive street art of various Beirut neighborhoods, and an autonomous robot arm that draws portraits emerged on the scene. It’s called TOD, aka The Obsessive Drafter. The creation, from its 3D printed parts to the Arduino codes and boards, was entirely done by the Lebanon-based makerspace Ghouyoum, R&D center Rapid Manufactory, and The Fact0ry. The idea came to life when Design Days Dubai invited founder Guillaume Crédoz to create an art installation for their entrance wall. At first the idea was that a large drawing arm would make a giant drawing continuously during the 6 days of the show. While conceiving it, Crédoz thought it would be a great challenge to push the idea and make the robot capable of sensing people’s movement and distance, recognizing them by camera, then taking a picture of them in order to turn it into a drawing – all to be done directly and autonomously. The result was a robot that encounters people, and decides on its own to create a portrait. As the rules that control its drawing are numerous, and the interactions between them are infinite, the output is unknown. Crédoz is the architect and designer of structure and manufacturing, Engineer Nareg Karaoghlanian did all the electronics and programming, and 3D artist Chady Karlitch did the picture-to-drawing programming. TOD was selected to showcase at the 10th Saint-Etienne Design Biennale in March 2017. To pay for the cost of the trip and make a second faster and smarter prototype with more sensors, the creators launched a crowdfunding campaign in Zoomaal asking for $8000.

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WeMENA launches new Challenge WeMENA, a project by the World Bank, Voyaj Inc. and YouNoodle is a business model challenge that connects women entrepreneurs and innovators across the region. Through the challenge, WeMENA accelerates innovative solutions that will help eight cities across the MENA region build resilience and withstand the adverse effects of climate change, and the social, economic, and financial stresses and shocks. Contestants in the challenge receive business training, guidance from mentors in the Silicon Valley and beyond, and the chance to compete for a share of $150,000 in cash awards. For this round, WeMENA is looking for women entrepreneurs whose ideas build resilience in one or more of the following cities: Beirut, Byblos, Ramallah, Amman, Cairo, Alexandria, Tunis, and Casablanca. The 9 categories are: Agriculture and Food Security, Sustainable Energy and the Environment, Water and Sanitation, Urban Development, Governance and Civic Engagement, Healthcare and Disease Prevention, Technology, Fintech and Smart Cities, Economics and Society, and Disaster Risk Reduction. 200 women will be selected to join a closed network with mentors from Silicon Valley and around the world, training to accelerate their business. The selected competitors will also have the chance to compete in the Grand Finale event in Casablanca, Morocco, for a share of $150,000 USD in cash awards.

Campaign En Route to Gaza’s First Coding Academy Incubator and co-working hub Gaza Sky Geeks (GSG) launched the crowdfunding campaign #PowerUpGazaGeeks in December. The initial purpose was to raise $95,000 to be allocated to buying a generator and fuel which would help in extending the working hours to include evenings and weekends. Ten days later, the campaign far-exceeded the amount and this prompted GSG to extend the target to $400,000 with the intention to launch Gaza’s first coding academy, facilitate 22 internships for Gazans in European and U.S. tech firms, and train high school girls to code. The campaign that is operated by international NGO Mercy Corps was encouraged by international support for the emerging tech scene in Gaza. “We’re facing the worst energy crisis we’ve had in Gaza, with some homes getting as little as four hours of electricity each day,” said Said Hassan, GSG’s manager and a startup founder himself. “At the same time, our tech sector is gaining traction – startups are closing more investments and generating revenue. We need electricity and access to the internet so we can grow our companies further. We live in what is essentially a disaster zone, but with a good internet connection, we can build our future even here.” Back in 2014, on the verge of shutting down due to lack of funding, GSG ran its first crowdfunding campaign, which became one of the most successful crowdfunding campaigns in the Arab world. Since that time, GSG has developed into a leading emerging market tech hub, creating more than 100 jobs and $91,000 in revenue via its startups and participating in a Silicon Valley startup bootcamp.

Volt Raises $550k Led By MEVP

On-demand urban peer-to-peer ridesharing app, Volt, announced the closing of a $550k seed round led by Middle East Venture Partners (MEVP) and Saned Partners. The main objective of this round is to scale operations and product development in Istanbul, accelerate the driver user base growth and launch to passengers. Volt connects car owners with passengers going in the same direction, all in real-time. It connects passengers with cars already driving in traffic and heading in the same direction. Car owners earn back their driving expenses without making profit), while passengers enjoy rides that are 70% cheaper than taxi. Volt’s turn-by-turn traffic navigation app shows commuter drivers the fastest route to their destination while looking for paying passengers along their way.

For passengers, the difference than any other ride-hailing / taxi booking app is their ability to set their destination first. Since Volt matches passengers with non-professional peer drivers that are heading in the same direction, rides on Volt are 70% cheaper than taxi, a price point no one in the market can match.

Volt’s business model is heading towards reshaping the urban mobility space. On the supply side, Volt’s total addressable market (potential drivers) in a given city is in the hundreds of thousands, as it’s not limited to professional drivers, but more to everyday commuter drivers. On the demand side, Volt’s pricing is closer to public transport than it is to taxis. It is currently raising a $2.5m round that will allow it to scale growth in Istanbul and lock the marketplace within 2017 and finance the expansion to Volt’s second city, which will definitely be outside Turkey.

Spring 2017 THE QUARTERLY

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TECHNOLOGY

USEFUL APPS FOR TRANSPORTATION A Round-Up of Taxi-Booking Apps for Residents in MENA

BANKING ON A DIGITAL FUTURE B y Rita Makhoul | @rampurple

A

s technology propagates across the world, banks have been placed at a crossroad, using an outdated and overloaded architecture to push products and services on increasingly demanding and tech-savvy customers.

Digitization promises to automate and improve many banking processes. Yet it’s not without peril: customer demands and expectations are increasing, and technology is fuelling the emergence of significant new competitors.

We explore some of the technologies that we believe will be transformative for the banking sector: A Beacon of Enhancement When it comes to the banking sector, one of the greatest challenges faced by most mobile banking partners and financial institutions has been in enhancing

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the opportunities around adoption, engagement and monetization of their mobile channel. And now beacons offer the perfect solution to this.

Beacons could boost both customer engagement and revenues. Beacon technology allows banks to be proactive with their consumers.

The moment a consumer walks into a branch, their phone would ‘ping’ with a welcome message. A summary of services would be displayed; or perhaps a special offer reflecting the customer’s personal bank history and net worth. The bank will be able to recognize him/her, bring up relevant information with the teller or bank manager and equip them to offer proactive services. The bank can use customer analytics later, as they can collect data on traffic patterns to help

them manage their business. Permissionbased interactions is the key.

There are challenges of course, and privacy is one of the ongoing concerns for consumers, especially when it comes to disclosing their location. However, providing consumers with a clear added value in return, consumers could opt-in for tailored marketing and locationbased services. For instance, DenizBank in Istanbul has used beacon devices to provide its bank customers the comfort of a queue number without actually queuing at the branch as long as they are within a 50-meter distance of the beacon devices. Another great example is that of Mobiquity Networks who partnered with Relevant Solutions to allow banks to reach out to their app users in shopping malls via beacons. Any consumer who has their app can receive offers from brands

communications. Controlled avatars would be able to present advice and offers to consumers. Rather than taking time off their busy schedules, consumers can meet with their avatar in a virtual branch and be presented with advice, offers, and shown simulations through real-time graphics. The technology not only saves consumers’ time, but also lowers the banks operations costs.

VR may also be used for internal needs such as training efforts or recruitment.

For instance, interviews may be done with ‘interview stimulators’ and internal training may be also done via virtual reality. One recruiter or trainer can control several avatars interviewing or providing training with a realistic effect.

and merchants at malls by being paying with that particular bank’s card.

Augmented Reality Augmenting So far, banks have merely been exploring ways to combine AR technology with traditional banking tools. Several banks have created AR apps to help consumers find the nearest branch or ATM. While navigating through the city, users can see real-time information on the nearby location; receive supplemental details, and even book an appointment.

Some interesting examples of how banks have been experimenting with AR include Halifax Bank and Australia’s Commonwealth Bank who leverage real estate data in their apps enabling potential buyers to find available properties for sale nearby, view detailed profiles of the property, and included

mortgage calculators and qualifying applications. The app also includes a virtual 3D overlay of the interior.

Another example is ‘BreezeLiving,’ an AR app launched by Standard Chartered China, which provides location-based services like discount coupons. Discounts are disguised as kites that can be caught, converted, and shared with friends.

BreezeLiving is also a social deal finder since users can set up a ‘tribe’ where they and their friends can share deals. Axis Bank in India has also come up with its AR feature within its mobile app that lists all the nearby possible places their customers can get attractive deals.

An Immersive Experience Banks are taking an interest in virtual reality a way mainly to revolutionize customer relations through enhancing

Citigroup, Fidelity Investments, and Swissquote have all introduced VR to help investors manage their finances.

Financial traders’ workstations provide an abundance of data in formats difficult to process on multiple monitors. To increase efficiency while reducing time and cost Citigroup introduced a holographic workstation with the use of Microsoft’s HoloLens. The trader wears the HoloLens and views ambient, high-level market conditions represented in a combination of 2D and 3D spheres hovering at the top of the workstation.

They then use hand gestures and voice to filter financial information and view historical and real-time performance.

Fidelity Investments have come up with StockCity for Oculus Rift, a tool that applies virtual reality and data visualization to help investors manage their finances. It turns a portfolio into a virtual city where each stock is a building with the height and footprint representing the price, trading volume and outstanding shares.

Swissquote developed a VR trading application enabling users to make trades with a glance. The VR headset creates a 360-degree trading wall for users to monitor the markets, feeding real-time Swiss Market Index data, currency pairs and the main indices to users.

Eye-tracking technology enables users to bring up more information about a

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TECHNOLOGY

USEFUL APPS FOR TRANSPORTATION specific stock and execute trades to a preconfigured value by focusing their eyes on the symbol.

A Round-Up of Taxi-Booking Apps for Residents in MENA

The Droids Have Arrived Many believe that artificial intelligence (AI) may be the future of banking.

The digital consumer is being trained by firms that are becoming masters of AI (Amazon, Google, Facebook and Apple) and expect the companies they use to know them, understand them and reward them through personalized communication.

The implications for banks is that by tracking users’ habits, activities, and behavioral characteristics, financial data and products can be personalized to meet and anticipate each user’s unique and changing needs. This makes it practical for each user to have his/her own digital personal financial assistant.

Due to the increasing automation of customization, banks can offer more personalized services in near real-time at lower costs. AI also applies to automated financial advisors and planners that assist users in making financial decisions, often called “robo advisors;” or as smart wallets that monitor and learn users’ habits and needs and alert and coach users, when appropriate, to show restraint and to alter their personal finance spending and saving behaviors.

No longer just the objects of fascination in science fiction, robots are beginning their invasion of banking. Robots along with artificial intelligence in banking have the potential to reduce costs, expand skills, and improve the customer experience working alongside (or replacing) humans.

As a ‘living’ example of how robots can be utilized in financial services, Bank Audi and Emirates NBD, along with several banks across the globe, took a first step toward employing non-human staff with the introduction of a customer service humanoid robot. While the robot is not intended to replace branch workers, they are being used to meet and greet customers, answering simple questions in various languages, freeing up some of the

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branch staffs’ time to work on more value added services.

City Union Bank in India introduced their first banking robot, Lakshmi, that can answer questions on more than 125 subjects and if stumped by a question it contacts the branch manager. As with all robots currently available at banks, all data is collected and the robot is constantly equipped with better data sets to improve their interactions. Lakshmi is capable of informing customers of their account balance, interest rates on home loans, account details, and transaction history.

Beam Me Cash Trying to transfer cash to a friend’s bank account is a surprisingly stressful process if you’re going through a bank. The transfers tend to take for days and come with fees.

However, a major shift is underway.

Banks expect the use of blockchain technology, which would allow institutions themselves to update data in real-time, to lower costs by cutting out the middleman, and speed up transactions since banks would cut down on time spent reconciling disparate data. As per a report by Accenture, blockchain technology could help the world’s largest banks to cut their infrastructure costs by

between $8 to $12 billion a year by 2025.

For a long while, there has been abundant talk about the possibility of major banks adopting blockchain technology into their infrastructure and practices, but little action. This past year seems to have finally brought some indication, however, that at least some of the global leaders in finance will move toward the technology that has long been affiliated with the digital currency Bitcoin.

According to an IBM report entitled ‘Leading the Pack in Blockchain Banking,’ banking and financial markets are adopting blockchain technology dramatically faster than initially expected.

In four years, IBM says that 66% percent of banks expect to have blockchain in commercial production and at scale.

Across the region, we have witnessed several banks announced that they have adopted Blockchain. The National Bank of Abu Dhabi (NBAD) announced that they have started to offer real-time cross border payments on blockchain technology, and Emirates NBD have announced that they have partnered with ICICI, an Indian bank, on a project to use blockchain technology for global remittances and trade finances.n

TECHNOLOGY

USEFUL APPS FOR TRANSPORTATION LET’S A Round-Up TALK of Taxi-Booking REGIONALLY Apps for Residents in MENA

We reached out to banks across the region to discover more about what to expect in the near future, in particular to our region What are the top 3 trends in banking that will shape the industry for consumers in the next 5 years?

In the next five years, banks will be using customer data to deepen their personal connections with customers. Additionally, I think we will see a return of customer trust in banks over other financial services providers as customer service becomes more ingrained and effective and financial regulators become more demanding.

Also, banks in the future will become much more than transaction processors.

Banks will enhance their position as advice providers as well as wealth managers.

LAILA AL-QATAMI

Assistant General Manager for Corporate Communications GULF BANK OF KUWAIT

How are advancements in technology affecting the banking industry, and particularly in Kuwait?

Globally, the banking sector has, in many ways, embraced and encouraged the use of technology. Through technology, customers have become more aware and knowledgeable of what they want and the banks are using technology to try to address these needs. In Kuwait, the impact of technology advancement has been quite positive, yet challenging.

Improved customer service and service efficiencies have been two of the key driving forces. Innovations in Kuwait range from online banking services, which are continually evolving, a greater range of flexible financial products and greater understanding and focus on individual customer needs. However, the Kuwait banking sector is heavily regulated and as such, it can be slower than other markets to adopt and deploy new technologies.

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THE QUARTERLY Spring 2017

In your opinion, what are the top 2 challenges traditional banks face in their move to become a ‘digital bank’?

The main challenge relies in shifting to digital technology while keeping the customer experience relevant. Becoming digital is not just about providing products and services online. It should also be about the ability to offer an online experience that can replicate and improve interaction with our customers.

Winning banks will effectively use “digital-friendly” technologies to enable their entire inventory of business processes so that products, services and advice may be made available to their customers in a seamless manner across both the physical and virtual world.

Products and services created will be mindful of this duality. Finally, the digital bank will of course use digital to make itself more efficient through digitally taking care of its internal customers as well as it strives to take care of its other customers and embrace B2B in its interaction with external entities such as government, suppliers, etc.

Another challenge is responding to regulatory pressure while remaining customer orientated. Regulatory requirements continue to increase, and

“Banks store mountains of data that should be invested in producing relevant insights.” we must comply and build systems and processes to keep up with the escalating requirements.

What tech will be transformative for the banking sector, and which do you believe are hyped or will have limited impact?

Blockchain, cognitive computing, cloud, augmented reality and sophisticated analytics are going to be some of the most important technologies that will shape the financial industry in the future.

Progressive banks will always manage to find new ways of using technology to help their customers and themselves, but it is early yet to know which technologies will fall by the wayside. Banks store mountains of data that should be invested in producing relevant insights.

The downside of this, of course, is that while expanded use of digital technologies in finance represent opportunities, it also increases the threat of cybersecurity risks.

Ultimately, we are being entrusted with other peoples’ money, so it is incumbent on the banking sector to embrace the new opportunities but proceed with caution.

How has the shift to digital banking changed the branch including staffing, services, customer interaction, etc.?

These days, before they even set foot in a branch, customers, especially the younger generation, are increasingly comfortable using the internet to seek advice, gather product and service information, and

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our smart branch, NOVO, built around the innovative concept of Video banking, which was unique at the time. It is through such initiatives, that we have shown our commitment to embracing technology, even at early stages when there isn’t a high-level of adoption, and influence the market standards and internal culture towards more innovation

directly compare banks. Online banking and mobile banking also mean that generic customer services at branch level are not as needed as before. At branches, customers expect a more tailored and personalized experience, which is what we try to give them. Consequently, this behavioral shift has greatly reduced the number of transactions conducted at brick-and-mortar banks, so banks are rethinking the size, locations, and numbers of their branches.

Not everyone has given up, or will give up the experience of visiting a brickand-mortar bank branch, however, I am sure the focus on using technology for financing needs is apt to continue in the future. The winning strategy is to “right-size” the branch network in harmony with the digital capabilities of the bank. Customers may not use them very often, but branches somehow do impart “gravitas” to a financial institution a fact that may be able to partially explain the non-proliferation of “digital-only” banks.n

“The winning strategy is to “rightsize” the branch network in harmony with the digital capabilities of the bank.”

FADY OBEID

Assistant Chief Operating Officer BANK AUDI - LEBANON

How are advancements in technology affecting the banking industry, and particularly in Lebanon? What has Bank Audi done to accommodate this change?

Technology has definitely been impacting the banking industry and our consumers.

People are requesting seamless services that are hassle-free and effortless and are embracing mobile and digital channels more and more each year. At Bank Audi, we are constantly building our platform to anticipate those needs and be prepared for the demands. We started taking steps to upgrade our technology and provide our clients with new services very early on as we have always been on the forefront of technological advances. Our approach is now geared towards creating a customercentric business model with seamless and integrated touchpoints, all built on an advanced infrastructure.

Towards the end of 2011, we embarked on a large-scale mission by introducing

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THE QUARTERLY Spring 2017

However, if we take a look at smart ATMs and ITMs (interactive teller machines with Live Video Teller), we have witnessed a surge in adoption across different age brackets and various segments. ATMs are getting smarter and our customers are taking advantage of the advanced capabilities by utilizing these machines for doing transactions, depositing/withdrawing cash and cheques, paying utility bills, and more. The advanced ATMs and ITMs provide our clients to conduct basic banking transactions at their own convenience effortlessly.

What are the top 3 trends in banking that will shape the industry for consumers in the next 5 years?

As time and technology progresses, Artificial Intelligence (AI), Machines Learning, chat bots, and video are top trends we are anticipating in the banking sector in the near future as primary resources to complete various banking tasks.

We recently introduced an AI robot in one of our NOVO branches. Currently, the robot only serves an entertainment function for customers who are waiting and provides some general information about our products and services. However, it will evolve to become much smarter and be a real component of banking services.

We also have introduced video support for customers at our NOVO branches and ITM. They can ask to open an account or apply for a loan through a machine and have someone support and advise them through video.

As for Machine Learning and Algorithms, we are engaged with several initiatives regarding models that can predict accurately customer behavior and suggest solutions and actions. Moving them into becoming self-learning is a frontier to be crossed once systems are deployed and efficient.

In your opinion, what are the top challenges traditional banks face in their move to become a ‘digital bank’?

The first challenge any traditional bank faces is the ‘legacy infrastructure’ in comparison to agile rivals who are unhindered by such an infrastructure and are typically better positioned to innovate. We are more fortunate at Bank Audi where the requirement to transform was acknowledged early on enabling us to be game changers in a competitive landscape.

Another challenge is the success factor.

We’re talking about a very low success rate of several technologies. If you look at fintech and startups there’s a 1 to 10 ratio of success to failure. So traditional banks have to accept failures and keep trying. They should constantly introduce new technologies, some which remain for years, and others which will fail for either being introduced too early, or a betterimproved version is later introduced.

What tech will be transformative for the banking sector, and which do you believe are hyped or will have limited impact?

To be honest, we really can’t be certain which tech will be transformative and which is simply a trend. You never really know especially considering the proliferation of technology today. There has been times when a certain tech was introduced and was all the hype, then it died down to only resurface a few years later, as was the case with bitcoin.

Bitcoin was all the rave a few years ago but the timing could have not been right. Today, blockchain is being adopted

to compliance requirements, introduces some checks and balances for the Straight Through Processing that removes or slows the instant aspect. This could affect blockchain deployment.

In short, we really cannot predict hype versus long impactful technology as technology is constantly evolving and regulators are progressing to meet the present needs.

GEBRAN GEBRAN

Head of Customer Experience BANK AUDI - LEBANON

“Our approach is now geared towards creating a customercentric business model.” dramatically faster than expected.

Blockchain works as an electronic transaction processing and record-keeping system that allows all parties, without the need of a third-party verification, to track information through a secure network. This could ultimately impact transfers amongst banks themselves.

If however, the present infrastructure evolves and allows for instant transfer and reconciliation, then the features of blockchain might become redundant.

Let’s consider that we all do adopt blockchain, but then the regulator, due

How has the shift to digital banking changed the branch including staffing, services, customer interaction, etc.?

Since the inception of banking, the branch has always been at the center of the banking experience. With today’s technology and customer expectations, the branch has become one touch point among many in a customer-centric landscape. As previously mentioned, customer behavior is changing with customers migrating to online and mobile channels, advanced ATMs, hence, more self-service points, to conduct the majority of their bank transactions.

We have addressed those changes by constantly evolving our mobile and online platforms and morphing them into becoming truly omni-channel including the ATM and Contact Center as well.

As automated and assisted self-services capabilities of the banks increase, the branch will often serve as a showroom for complex product sales offering value added services and as a venue for expert advice. These value added services require human interaction with a trust component. Teams are being trained differently to shift to more of an advisory role offering high levels of client interaction and expertise to enrich customer relationships.

Although the branch is shifting, the human component of the branch will never be deducted. Customers still appreciate the human element and support they receive.n

Spring 2017 THE QUARTERLY

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FUTURE OF THE BRANCH Size and Role of Branches As automated and assisted self-services capabilities of banks increase, the size of the typical branch will decrease. The bank will often serve as a showroom for complex product sales and as a venue for expert advice.

The “Shop” This format of the branch offers retail-like displays providing customers with the opportunity to browse in self-serve aisles focusing on standardized products and services that are already available via online channels, such as account opening and loan application.

The ‘shop’ format requires minimal staffing with limited advisory.

The “Lounge” This branch format is primarily designed for building strong customer relationships by offering a relaxed atmosphere to help customers get acquainted with the bank and simultaneously receive basic levels of advice, as needed. The “Lounge” offers high levels of customer intimacy with its focus on providing complimentary services and enhancing customer engagement. The focus of this format is not on selling but on cultivating customer relationships for cross- selling and up-selling services.

The “Digital Pod” This branch format allows customers to perform all the transactions of a physical bank branch using sophisticated digital technology. “Digital Pods” introduce consumers to the next generation in banking technology. The “Digital Pod” employs advanced digital tools and technologies, such as videoconferencing, online document sharing, etc. with minimal staffing.

Beacons

Beacon devices work with Bluetooth within a 50m range detecting customers in proximity of the branch. Clients may be notified of the nearby branch and get a queue number even before entering the bank.

Once the client enters the bank they can receive a personal welcome interaction on their phones.

By integrating with the bank’s CRM, the personnel at the branch may receive the customer’s profile and history. Based on the customer’s choices and personal profile, they would be allocated a bank officer who will also be notified of the customer’s presence along with waiting time.

Advanced ATMs Smart ATMs are providing basic services such as withdrawing and depositing cash/cheques, while also offering advanced functions such as transferring money, paying bills, and more.

Banks have started introducing ATMs fitted with high-definition video displays for customers to initiate a video conversation with a centrally located advisor who is available until late hours.

Soon advanced ATMs will have the ability to conduct transactions using mobile devices using NFC. Customers will be able to initiate transactions on their phone and complete the transaction once they arrive at the ATM with assistance reducing the transaction time.

Banking Workforce New Roles The majority role of the branch’s workforce will shift from a transactional role to an advisory role. Teams will be trained differently to emphasize cross-platform behavior.

Mobile and Online Integration Interactive Touch Screen Displays

Interactive touch screen displays at branches allow customers to explore the bank’s financial services and products on their own, tailor the messages and offers accordingly, and can interact with customers via their smartphone banking app.

With customers expecting consistent service across all channels, banks must step up to the plate and streamline their processes when it comes to customer interaction. Furthermore, a customer who starts a transaction on one channel should be able to pick it up at another making their transactions consistent across the various points and channels.

BUSINESS

DIGITAL BANKING ADOPTION IN MENA

62%

of overall bank holders in the region are adopters of digital banking [online banking, mobile banking, or both].

DIGITAL ADOPTION IS HIGHEST 75%

LOWEST 74%

KSA 22

THE QUARTERLY Spring 2017

UAE

64%

Egypt

54%

Lebanon

42%

Jordan

KEY ADOPTION MOTIVATORS 38%

29%

24/7 access

29%

29%

reduced banking time

easier access to transactions

easier follow-up on transactions

TOP REASON FOR NON-ADOPTION OF MOBILE | ONLINE BANKING Trust

40%

27%

Prefer dealing with a bank

Worry about security

TOP TRANSACTIONS USED WITH DIGITAL BANKING 33%

29%

33%

33%

29%

23% 10%

Check bank statement

Manage bank accounts

At least once a week

Credit card management

Bill payments

Money transfer

At least once a month

Remittance transfer

Order cheques/Cards

10% File complaint/ Fraud claim

Six months or less

Spring 2017 THE QUARTERLY

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ABDELMALIK AL SHEIKH CEO OF SADAD PAYMENT SYSTEM

By Mohamed Salhab | @mamiko_sohayl

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THE QUARTERLY Spring 2017

I

n 2004, SADAD Payment System was launched as the first electronic bill presentment and payment (EBPP) service provider for the Kingdom of Saudi Arabia. Today, SADAD is an essential element of e-commerce and e-payments infrastructure in KSA. It aims at providing one solution for all payments, facilitating and streamlining a wide range of payment transactions for individuals, banks, businesses, and the government sector, while continuing to develop new payment products and services.

ArabNet’s CEO, Omar Christidis, sat down with Abdelmalik Al Sheikh, SADAD’s CEO to discuss the growing scope of SADAD and his future vision.

May you provide us with your view of the progress that has taken place the past 10 years in the fields of digital banking, e-payments, and e-transactions?

So many changes have occured these past few years that we couldn’t visualize back then the new ecosystem that we have now. A lot can be attributed to the high levels of connection that individuals and organizations have enjoyed. Another example is the ‘prosumer’ concept (consumer and producer) as a lot more people started designing, producing, and selling from their homes. We are also witnessing a move around the world from ownership to access – people don’t have to own a car because they have access to ride-sharing – in the form of the Uber disruption.

At SADAD, we are building an infrastructure and an ecosystem capable of handling the developments witnessed in the market. When we started in 2004 and launched officially in 2007, we based our brand identity on ease, comfort, and rendering consumers’ lives easier with regards to bill payments. Currently, now we are supporting e-commerce through digital accounts of the SADAD payment services at the banks allowing users to pay directly online with only a username and password.

This is just the beginning, there is a big wave of change that is influencing the banking world, and the fintech phenomenon is a prime example.

Everywhere in the world fintech is becoming the talk of the banking sector and some executives consider it a threat to the banking world because it provides ease, flexibility, cheaper services, and engagement. Fintech models are more engaging in their response to client needs and banks are starting to view them as opportunities for change.

Speaking of banks, should they be worried about disruption from fintech?

How must they respond and collaborate?

Fintech started as a small concept and has become a phenomenon in the past year that is gaining momentum in affecting the banking sector. It is clearly a threat to the banking world, and banks have a big role to play. This is overdue. For a long time people have been wondering when will disruption influence the banking industry? Until now, banks still have full control over the fintech and banking services. More recently, the ‘prosumer’ concept became attractive. Crowd funding, for example, allowed people to borrow from other people instead of getting a loan from a bank.

Banks have adopted different models in dealing with the fintech world.

Some bought fintech companies, others started collaborating with them. Such engagements are allowing fintech players to present new ideas that help banks transition into the digital age.

“Fintech models are more engaging in their response to client needs and banks are starting to view them as opportunities for change.”

How has SADAD’s journey been thus far and what kind of active role will it play in fintech?

I can proudly say that SADAD is the most advanced electronic bill payments system in the world. We have a central system (with a head-turning, complicated infrastructure) for the full electronic payment of all services from electricity to water, telecom, municipality charges, etc. this led to a high volume of usage indicating that SADAD has become part of people’s lives. Last year, over 170 million transactions were made, while this year we surpassed 180 million at a value of more than 200 billion SAR a year.

Since we launched, there has been over one billion operations, with a total value exceeding 1 trillion SAR. In addition to these traditional payments, the government joined enthusiastically due to the completed infrastructure of our offering – citizens can pay any financial dues, wherever they are through their bank accounts. This gave us the chance to reach new levels.

Part of our strategy is allowing users to have a SADAD digital account with all the banks. This will be their gateway to all future digital transformation – for it can include person to person mobile and other online payments in addition to supporting international service providers such as Visa, MasterCard, and PayPal. There has already been talks of collaborations which can easily become a reality given our advanced, facilitating infrastructure. It is worth noting that this change won’t happen overnight, it requires time, awareness, and education for market players to benefit from the existing infrastructure.

Has your e-Wallet been launched as a service from within the infrastructure?

It is officially available now and there are over 100 traders and major companies using it including Saudi Airlines and Jarir Bookstores among others. It is still a work in progress that has not, until now, achieved a high user rate because people still need to open an account to get used to the way it works. We are hoping for fast and constant growth with the introduction of other products.

Spring 2017 THE QUARTERLY

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BUSINESS

When will we see a service that allows payments among individuals – friends splitting a lunch tab, for instance?

Person to person mobile payments might lead to fast progress that would serve the commercial sector as a whole, not just individuals paying one another.

Currently we have a pilot program and some early stage experiments on involving the mobile number registered on the digital account of SADAD. We have conducted experiments with 8 banks, all of which resulted in a success, and we’re currently building the ecosystem to support it, and that includes call centers, fraud detection and security programs, en route to officially launching the service in the first half of 2017.

What is SADAD’s interest and role in stimulating fintech growth given the popular demand for such digital services?

SADAD Payment System is part of the Saudi Arabian Monetary Authority (SAMA) and we have a group of services that include SADAD, Mada, and Sarie (fast). They are all part of the Integrated Payment System Strategy (IPSS) 2020 currently underway. There is an inclination within SAMA to support fintech which has become an international phenomenon where hubs, cities and governments compete in their support of fintech and this is happening in Hong Kong, Singapore, Berlin, and San Francisco.

We want to create a stimulating fintech environment for developing new services. There are preliminary talks with banks and scheduled workshops for devising an operational formula for the knowhow of creating fintech platforms that would provide fintech players with ideas.

I believe we have the talented youth to innovate and develop services for the benefit of both the banking sector and the consumers. Fintech development in the Kingdom is a very promising field, and we’re hopeful that by next year’s ArabNet Riyadh to share with you our results and progress.

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THE QUARTERLY Spring 2017

What is required from organizations in the next 3-5 years to adapt with the fintech movement?

Fintech will surely cause change. Banks, in return, will play a major role in this new world. All the local Saudi banks are now investing heavily in digital banking. Because we cannot know what will happen in 3 years in this changing world, then the service players have to be flexible and quickly adapt to changes in the market.

We have seen plenty of examples when organizations are slow in adapting and this might threaten their existence, such as what happened to Nokia and others.

More importantly, you have to be more agile and able to transform internally and develop your products quickly to continue competing.

When will SADAD be used as payment gateway for the e-commerce websites of KSA – not just for big companies but also startups?

The service is available now and is provided by banks and service providers.

We have a qualified group of service providers capable of working with startups and small companies. In return, these established companies and startups must provide a commercial register and a bank account and they’d qualify for a SADAD account as a payment service via website or mobile.

Will you require fintech startups to obtain a banking license for using your services?

If they are providing banking services, then a license is certainly required.

However, if fintech startups are

“Person to person mobile payments might lead to fast progress that would serve the commercial sector as a whole, not just individuals paying one another.”

providing services and new ideas within a bank’s ‘umbrella of services’ then it doesn’t need licensing because banks already deal with various service providers in this regards. The new types of services would just need quality checks, audits, and reviews. I expect fintech startups to go through stages, first with the basic services that attract banks and won’t require a banking license and then moving on to plenty of new opportunities in the field.

Will we see an expansion of SADAD Payment System to the GCC? We currently work with service providers from the GCC who have clients in the kingdom. There is an inclination by SAMA to render the SADAD and Mada services as independent entities within the commerce sector. This is a journey which

SAMA has already started, so we might actually see these services expanding into the GCC and other areas in the near future.

We are hearing a lot about new technologies such as Big Data, virtual reality and others; which do you think are the right ones to focus on and invest in?

Developing tech systems used to take time in the past, whereas now the institutes that want to stay and compete must change their tech development model. Agility and flexibility are of key importance. Around the world markets are open to fintech development on all levels. In addition, mobile apps have made a revolution in providing services and products. Now you can create what’s beneficial to people without the need for huge investment in infrastructure.

Furthermore, Big Data will be the engine of the world, and the information is there but we make very limited use of it today. With time, more tools will be developed for better analysis and making the right decisions.

Furthermore, the existence of APIs is very important for companies to interact with what’s happening abroad and to have access. Google Maps is the best example of an open API. So organizations have to be open – and many of the international players like Visa and MasterCard expanded their systems last year to include an open API. Currently at SADAD we are on the right path to release the SADAD Open API which will allow fintech startups to have access and develop products related to our existing infrastructure.n

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UNDERSTANDING SAUDI

CREDIT CARD OWNERSHIP

R

esearch conducted by Choueiri Group, in partnership with Nielsen, to Saudi consumers throws light on the best ways to communicate on the topic of credit cards. The study, completed online across Choueiri Group websites by 5,000 respondents, asked about credit card ownership and intentions to own,

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THE QUARTERLY Spring 2017

and looked to understand the credit card purchase cycle.

The results give advertisers some fascinating dimensions and communication cues on how to engage and attract customers in this competitive market.

BENEFITS, BENEFITS, BENEFITS

Saudi consumers who already own a credit card told us that the most important element they look for when applying for a card are the card benefits, regardless of the credit card or bank name (57%). As benefits are a key driving

factor, it’s important for us to understand what consumers see as a credit card benefit, so brands understand which elements of their product offerings to highlight in their communications.

understood, then our Saudi respondents indicated some strong drivers for their credit card choice – trust and the banks reputation, and this is the same for all whether a previous card owner or not.

Interestingly, the benefits are not necessarily what might be expected: they are not about associated rewards such as air miles – in fact these kinds of rewards received the lowest number of responses (16%). The key benefits looked for by consumers revolve around convenience and product – ease of payment (51%), interest rates (50%), and available credit card limit (40%) – which are to fulfill their main drivers towards ownership, that of shopping (36%) and travel (30%).

For previous owners of a card who are considering their main bank, the most important elements after trust are convenience (31%), familiarity (23%) and loyalty (16%). Their relationship with their bank is really driving their choices, and the first thing they will do once they have established the card benefits is visit their own banks’ website (39%). It is critical then for banks to keep on informing and educating existing customers about their credit card offerings, to ensure they retain their loyalty and don’t lose them to another bank. The end result for over two-thirds of these consumers (65%) is that they ended up getting a credit card from their own bank and thus were retained as a customer.

For people looking to apply for a new credit card, the factors that are more important to them vary depending on whether they have owned a credit card before. For both sets of consumers, the benefits are still the most important factor they look for, however the benefits change in order of importance.

People who intend to apply for a new card but have not owned one before have similar drivers as previous credit card owners – shopping (37%) and e-shopping (32%).

For people who have already owned a card however, their main driver is to solve a financial problem (44%), and they are looking for benefits including interest rates (58%) and ease of payments (42%).

THE DRIVERS TOWARDS BRAND

In looking to understand primarily what benefits a credit card can offer, our Saudi consumers’ journey starts with a lot of research, and they will do this before considering any specific brand. Utilizing online platforms for their information, they will visit their own banks’ website (39%), other banks’ websites (28%) and comparison websites (10%). Also playing an important role in their research is that of their family and friends’ recommendations (33%).

Following this period of research and information gathering, and once the benefits of a card have been realized and

For previous owners of a credit card who considered other bank brands, after trust and reputation, they are looking for innovative products and offerings that their own bank does not have (20%). In this, the critical aspects for communication are that the banks are continuously in a cycle of driving awareness of their brand and products, are clearly innovating with their credit card offerings vs. other banks, and keep consumers informed to a high level.

This will ensure that new customers are acquired additionally.

Consumers who own a credit card already and intend to apply for a new one will consider both their own and other banks at the same time (37%).

As a communication cue, this clearly demonstrates that an ongoing informative communication strategy is key to customer retention or acquisition.

CONSIDERATION SET

Some interesting findings emerged around Saudi consumers’ consideration set. For existing card owners, once they had completed their research, three-quarters of them claimed to have only considered

1 credit card and they stuck to that 1 card throughout their application journey.

70% did not change their consideration set after their research was completed.

30% who did change their consideration set realized other cards had benefits they had previously been unaware of. This strongly reinforces the need for banks to be educating and informing consumers about their products and offerings continuously. Any bank not demonstrating their benefits clearly as customers are researching is then excluded and will lose out on new customers.

This behaviour is consistent for people who intend to apply for a card in the future but who have not owned one before.

PLANNING AN EFFECTIVE COMMUNICATION STRATEGY

Given this understanding of how consumers make their credit card choices, there are 4 key points every bank should focus on in order to plan an effective communication strategy: • Create awareness: run branding and awareness campaigns to strengthen the value and the perception of the bank in consumers’ mind. The research showed us that trust and reputation in a banks brand are the foundation for any consideration.

• Educate users: educate people on the benefits and usage of using credit cards. 68% don’t own one. This can be done through content marketing strategies.

• Identify needs: develop tailor-made products based on the users’ needs and desired benefits. What drives a user to get a credit card is the convenience, not the rewards.

• Generate interests: use creative to communicate and inform people about the product value and benefits.

Keeping users aware of your offering will keep the bank on the upper funnel of the consideration set.n

Brought to you by: Data Department at Choueiri Group in collaboration with Nielsen Spring 2017 THE QUARTERLY 29

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USEFUL APPS FOR TRANSPORTATION

The research was carried out by Choueiri Group Data Team - Marketing Department in Saudi Arabia in order to understand the consumer journey when choosing a credit card and how that impacts communication strategies.

Fieldwork was carried out between Jan 12th and Jan 19th 2017 with a sample size of 5,000 users.

32%

68%

own a credit card

Intention to apply for a credit card in the future amongst non credit card owners

Don’t own a credit card

49% 41%

10% Have a clear idea when to apply

Don't know when

No, I won't

LOOKING AT THE JOURNEY OF USERS WHO OWN A CREDIT CARD

THEIR PROFILE 64%

80%

Are married with kids

10-20K SAR

Locals

MHHI

Are retired Are unemployed housewives/

MAINLY AGED 25-40 YEARS OLD (75%)

5%

Are students

4%

6% Are professionals

12% 55%

Below 20

20-24

25-29

30-34

35-39

40-44

45-49

50-59

60 above

18% Are high managerial level

Are mid-low managerial level

THEIR JOURNEY TOP 5 TRIGGERS TO START LOOKING FOR A CREDIT CARD

Shopping

E-Shopping

Travelling

36%

44%

Solve financial problem

30%

Have emergency money aside

23%

Instead of having cash money

12%

16%

Bank & credit card name

25%

MOST IMPORTANT FACTORS WHEN LOOKING FOR A CREDIT CARD

The journey starts with RESEARCH about the BENEFITS

Key steps done

57%

0 CREDIT CARD CONSIDERED AT THIS STAGE Credit card BENEFITS regardless of credit card brand name or bank name

39%

Visited main bank website

33%

Fiends/family recommendation

28%

Visiting different banks sites

10%

Visiting comparison sites (compare credit cards)

8%

75%

After doing the research about the benefits

Considered 1 CREDIT CARD

KEY FACTORS FOR CHOOSING A CREDIT CARD

Visiting financial pages on sites (news, lifestyle, etc.)

The bank is the FOUNDATION for any consideration set

REASONS TO CONSIDER MAIN BANK

55%

51%

Interest rate

50%

Credit card limit

Main bank: Al-Rajhi (37%), Al-Ahli (15%), SAMBA (8%)

40%

0% balance transfer Grace period

52% considered their main bank

25% 22%

Rewrads 16%

38% considered their main & other banks

31% 23%

Other bank: Al-Rajhi (40%), Al-Ahli (21%), SAMBA (18%)

16% Trustworthiness Convenience

Ease of payment

Familiarity

Loyalty

12%

10% considered other banks

Offers products I want

REASONS TO CONSIDER OTHER BANK

48%

END RESULT

21% Reputation

Trusted

20%

16%

Innovative Recommended products that main bank does not offer

12% Offers benefits that my bank does not offer

65%

61%

67%

End up getting credit card from MAIN BANK

End up getting 1 CREDIT CARD

End up getting a CHARGEABLE CREDIT CARD (yearly fee)

DURING THE WHOLE JOURNEY, 70% DIDN’T CHANGE THEIR CREDIT CARD CONSIDERATION SET

(knowing about more benefits was the key driver for those who changed their consideration set during the journey)

T H E W H O L E J O U R N E Y TA K E S U P TO 1 W E E K

Bank name

FUTURE INTENDERS Of the users don’t know when they will apply for a credit card

43% Of the users have a clear idea on when they will apply for a credit card they are noncredit card owners

6.9%

These intenders have the same behaviour as a first owner

6.6%

43%

Of the users have a clear idea on when they will apply for a credit card they are also previous credit card owners

Of the users don’t want to apply for a credit card in the future

Looking at previous owners who intend to get a new credit card in the future

SOLVING FINANCIAL PROBLEM MAIN TRIGGER to start looking for another credit card Previous triggers

(shopping:40%; E-shopping: 36%; solve financial problem:28%)

Shopping

Solve financial problem

37%

44%

Most important factors when looking for a credit card (changed)

46% 37%

36% 26%

22%

25%

A SHIFT IN BANK CONSIDERATION MAIN BANK IS NOT THE ON THE TOP OF THE CONSIDERATION SET 57%

Bank & credit card Name

Card benefits regardless of credit card name Currently

Bank name

47%

Previously

38% 27%

REPUTABILITY COMES BY DEFAULT BUT INNOVATION IS WHAT DRIVE THEM TO CHOOSE ANOTHER BANK Well known reputation

70%

Offers innovation products that my bank doesn't offer

27%

15% 16% Will consider main and other banks

Will consider main bank Currently

Trusted 20%

62%

INCREASED CONSIDERATION OF MULTIPLE CREDIT CARDS

54%

27%

Vs. 61% previously

Vs. 24% previously

41% 42%

Ease of payment

Vs. 6% previously

Previously

DRIVEN BY INTEREST WHEN CHOOSING A CREDIT CARD

Offers products I was looking for that my bank doesn't have 15%

11%

Will consider other bank

46%

52% 43%

Credit Limit Currently

Interest rate

Previously

8% Vs. 8% previously

* To note that the sample size is reflective of the Saudi male population

Brought to you by: Data Department at Choueiri Group in collaboration with Nielsen

DIGITAL MEDIA

USEFUL APPS FOR TRANSPORTATION

THE FUTURE OF CUSTOMER EXPERIENCE

A Round-Up of Taxi-Booking Apps for Residents in MENA

By Lynn El Bizri | @lnlne

N

ine times out of ten, customer experience (CX) is the only thing differentiating companies from one another, so it isn’t surprising that CX has claimed the number one status in the priority list for business and technology leaders in 2015 (Forrester). Customer experience is how customers feel as they engage with a company or brand over time, and as technology, consumer behavior, and business models change and evolve, customer experience is forecast to become even more important and an integral part of successful business strategies.

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THE QUARTERLY Spring 2017

While business success once depended solely on delivering reliable and high quality products or services to the market, this is no longer the case. Today’s consumers and in particular millennials are more informed, selective, and expect a tailored and personalized experience that aligns with their personal values. They also want to be able to access products and services from any location at any time. Businesses must therefore focus on the customer experience in their product/ service design and business model in order to differentiate themselves and not lose their customers or market share.

Customer Experience Management is becoming a top strategic priority for CEOs in the MENA region, according to Deloitte, and although leading businesses have traditionally invested heavily in both physical and functional customer experiences, investments in emotional experiences are still lacking.

High quality products and services are integral, yet to truly stand out, businesses will need to build and overlay their existing customer journey with an emotional one by adding a genuine human facet to their brand while focusing on honesty and relevance.

To survive the future, however, businesses will need to adapt to an ever-changing customer base, respond to shifts in business-consumer dynamics, as well as embrace trends and technological advances in our constantly evolving digital landscape.

Marketing for Millennials According to Forbes, the millennial generation is the largest in history, representing $600 billion in spending opportunity. In addition to representing a growing portion of consumer spend, millennials are also setting the new customer experience standards and shaping the investments for the future of many industries. Being a demographic that was raised on the Internet, millennials are tech-savvy, independent, socially connected and have high expectations, attributes that businesses and financial institutions should take advantage of to attract millennials to their products and services. Knowing that millennials are the ‘Internet generation’, brick and mortar businesses such as retailers and banks must have an online presence and invest in digitalization and digital marketing or risk being at a competitive disadvantage.

On the mobile front, millennials represent the heaviest mobile users, spending hours on desktop and mobile internet platforms shopping, browsing and using social media platforms and apps. By implementing social media communication strategies, ensuring mobile friendly versions of their websites and investing in mobilefocused technologies, brands can drive more traffic to their sites and increase interest in their products and services.

Omnichannel, in particular, is a critical part of corporate strategy, and retailers and financial institutions must develop a customer experience that gives customers access to a seamless and personalized service across every possible touchpoint.

Although traditional channels are still important, digitization is more quickly adopted in certain areas versus others, and customers are spending less time in shops and banks and increasingly using the internet and mobile platforms as their most frequent way of interacting with banks and retailers.

Self-Service and Artificial Intelligence By 2020, 85% of business relationships will be managed by the customer without any human interaction, according to research and advisory firm Gartner.

Today’s modern customers expect to have access to efficient and speedy self-service options which they can use to find answers to their questions and accomplish tasks themselves. By making customer service more accessible, through online self-service tools and AI technologies such as automated assistants, brands will not only retain their loyal customers but also improve their overall brand recognition.

Thanks to Artificial Intelligence (AI) technologies, companies no longer have to depend on human assistants to provide customer support and tackle customer pain points. With the assistance of non-human digital assistants, more time can be spent on building customer relationships and solving tough problems while more resources and capacity are freed to focus on growth. Another major strength of AI lies in its capability to collect large capacities of data at a very high speed, recognize patterns, and learn from them. By collecting information about consumers’ activities and buying patterns, for example, AI can offer real-time, highly personalized recommendations to customers, according to their tastes and preferences.

Although AI has been around for a while, brands have only recently started adopting it for consumer services.

Examples include budget airline easyJet which uses AI to analyze large amounts of consumer data, food brand Knorr who used cognitive technology to interact naturally with consumers and deliver tailored recipes in their recent campaign ‘Love at First Taste’, and Skype which plugged into machine learning to deliver voice recognition and real-time translation. While AI is rapidly catching on and becoming the next big thing, businesses must ensure they strike the right balance between people-power and technology to ensure they are always offering high-quality and personalized experiences.

Data Driven Personalization When asked about his predictions for CX in 2016, Victor Milligan (CMO at Forrester Research) stated ‘Analytics is becoming a key competitive weapon.

It’s not about making big data bigger but making it more useful and able to anticipate and deliver super experiences to customers.’ Businesses that make use of customer analytics are showing a 126% profit improvement over their competitors that don’t, according to research by McKinsey, and as businesses become more and more data-driven, leveraging customer experience analytics will be crucial for providing a seamless and personalized customer experience and obtaining competitive advantage.

Today, retailers know exactly where their customers are located, their actions on the site, their past purchases and even their next online stop, thanks to easily traceable consumer behavior data. The abundant data harnessed is used by businesses to tailor their offerings and marketing messages, evolve and develop strategies, create algorithm-based customer experiences and maintain and foster stronger customer relationships. By combining business processes and customer information (including external data) on one platform, however, businesses can understand their customers and their intents, and act in real-time on taking their experiences to the next level. If leveraged effectively, predictive analytics and data enable the businesses to deliver excellent customer experience by expecting rather than simply responding to customers’ needs.

Data should also be used to create individually tailored and contextualized experiences, as personalization of customers’ digital experiences is particularly critical to a brand’s future success. Consumers not only expect firms to contextually understand who they are, but they also expect them to respond to their needs and anticipate them.

To differentiate, businesses need to be effective at using different data streams to recognize and respond to the needs of their consumers, from big data for overall trends to microdata for looking at a particular group or account’s behavior and their use of a product or service.n

Spring 2017 THE QUARTERLY

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DIGITAL MEDIA

USEFUL APPS FOR TRANSPORTATION LET’S A Round-Up TALK of Taxi-Booking REGIONALLY Apps for Residents in MENA

We reached out to banks in the region to discuss their customer-centric marketing strategies, in particular to our region with traditional brick and mortar as well as contact center touchpoints to allow all customers to choose how they interact with our company.

RASOOL HUJAIR

Chief Executive Officer NAJM - UAE

From a marketing perspective, what is being done to engage millennials, as they become an increasingly large share of your customer base? What channels/ strategies do you use?

Millennials represent a growing portion of the consumer spend and hence are setting the new customer experience standards, shaping the investments for the future of many industries including banking and finance. They are digitally savvy, socially connected as well as vocal, have high expectations and want quick and flexible access to services and goods.

Effortless and enriching customer experience being at the center of our corporate culture, our digital strategies are geared towards satisfying the expectations of this trendsetter segment, allowing us to simultaneously educate more traditional customer segments about the convenience of digital channels. While supporting the shift to digital, we carefully balance our digital customer servicing channels

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THE QUARTERLY Spring 2017

We’ve also invested in the leading mobile wallet platform in the region, Beam Wallet, as we know that mobile is going to be, if not already is, the preferred channel for transactions as well as servicing. Beam speaks to these uber connected individuals leveraging technology, payments and a loyalty scheme together in a mobile app that allows for payment through the Beam app via a beacon or payment terminal in retail outlets for goods and services.

It’s all about choice, convenience and an excellent customer experience, this is what we stand for.

Are you developing an omni – channel and seamless customer experience?

How do you consider physical and digital execution for a holistic customercentric experience?

Our main goal is to create an effortless and enriching experience for our customers due to our branchless nature, and to be present at all possible relevant customer touchpoints when and where our customers prefer or need to interact with us. Examples of this are our presence at Carrefour where customers can apply for our Najm credit card offering 4% cashback at Carrefour, or our omnichannel servicing capabilities. We let our customers choose which channels they interact with us during every phase of the customer’s life cycle. From application to servicing, from new requests to complaint resolution, we offer many channels for them to use. Traditional channels are still important and digitization is more quickly adopted in certain areas versus others. To give you an example, we are one of only three financial institutions that allow customers to complete the entire Easy Payment Plan (EPP) process online in a just a few clicks. The overall effect was a 40 percent shift in EPP being

converted online versus via contact center channel. While adoption for this digital service has been amazingly quick, the shift to the online channel for application is much slower as most customers prefer to deal directly with a sales agent.

Do you map customer journeys? May you share any insights on behaviors from brick-and-mortar to online?

Understanding how customers behave is only one part of the equation, the other is understanding where the behavior happens and seeing if there is an opportunity to improve the journey by merging offline and online interactions.

This starts at the point of exposure to our products. We marry offline and online milestones along any particular journey and constantly evaluate which channels are being used. We then adapt aspects of the journey to save the customer time or improve their overall experience. For example, if a potential customer sees an advertisement inside Carrefour for one of our cashback credit cards, their application journey can start physically in the store via a Direct Sales Agent or through an SMS short code for a lead call via our Telesales Agents or digitally with an online application, as they receive an instant link to our online application form.

In our online application journey, customers can choose a completely digital experience from completing the application, to online document submission, omitting the need to interact with anyone physically to become a card member. It is all about convenience for the customer, the journey should suit their needs in any scenario.

What’s the power of mobile in the consumer’s journey? Are you able to share stats on the amount of transactions conducted on mobile?

Mobile is a pervasive part of our lives, and we aim to shift our services predominantly towards mobile channels

to give our customers full self-service capability at their preferred time. We also think of the mobile experience during all phases of the customer lifecycle – from having an optimized website to having features like interactive SMS, mobile pin activation and a dedicated app, MyNajm, where they have a complete 360 view of their account. Moving forward, we are expanding into deeper integration within social media and mobile channels (i.e.

Whatsapp for customer servicing).

However, mobile is not only about customer facing channels, but can be used to improve the customer experience in a holistic manner. All of our sales agents in the field are equipped with mobile devices that are linked to our cloudbased customer relationship management system, allowing them to instantly update their interactions with customers in a continuous feedback loop to improve the overall level of service they experience. We know what actions a particular prospective or current customer have taken and the status. This allows us to have more intelligent interactions and the ability to know our customer and anticipate the need can only happen when you enable an integrated mobile experience at all touchpoints with customers.

Have you developed lead generation and/or conversion based marketing strategies? How do you consider pervasive analytics, real-time marketing and advanced multichannel integration in your strategy?

Our vision is to move from mass or segmented marketing to one-to-one marketing. We look at being able to micro segment our customers as an essential tool in creating positive experiences.

We leverage the power of analytics and use data-driven insights to deliver a more personalized digital experience to both our prospects and customers alike.

We strive to deliver relevant messages based on data compiled for each of our customers at the right time, via their

“We look at being able to micro segment our customers as an essential tool in creating positive experiences.� preferred channel. This is a continuous process that gets refined with every transaction they make. We want to know what motivates them and give them the types of offers and information that is relevant to their lives.

Extensive use of multivariate testing and advanced segmentation allows us to further optimize this finely tuned digital experience. Early on in our business, we invested in building strong data warehouse capabilities. This now forms a central repository of rich granular data collected from users across all our touch points and gives us the ability to use analytics to scale up and accelerate.

Our expertise in behavioral analytics and statistical modeling naturally extends to support our lead generation activity. We are able to identify potential customers based on their behavioral patterns, both on and offline, deliver sustained relevant messages through channels that they prefer and convert them to loyal customers and passionate advocates.

What percentage of customers are active users of digital channels? How has their behavior changed as they adopted digital channels?

We have seen customers readily adopt our digital channels. Our mobile app adoption rate is at about 60 percent, with

20 to 25 percent of customer interactions initiated via this channel. Customers prefer the digital channels and we see that with increases in usage steadily reducing their reliance on traditional sales and customer service channels. We expect to see more customers preferring self-service and on-the-go access to their accounts.

On the social media side our growth rate was around 20 percent last year, with the average for local finance companies at about 12-15 percent. Our engagement rates have also increased by 25 percent as we have initiated detailed targeting and created rich, relevant content at the right time and following trends. Through automation, we have further improved our customer service levels on social media, reducing turnaround time and response rates for customers. We also use social listening tools to actively seek out customers and help them.

However, a segment of our customers prefer traditional channels when it comes to servicing. This is why continuing to invest in our customer contact center has been one of our priorities. Najm contact center follows international standards and we continuously improve systems used which results in time savings for the customer without sacrificing quality of service. Our latest investment was in upgrading our Interactive Voice Response (IVR) systems which allows customers who use their registered mobile number to be instantly recognized by our system without the hassle of entering credit card details.

As a testament, our call centre has been awarded numerous accolades for service excellence. Regardless of the channel type a customer chooses, the experience with Najm will be consistent and access to information is quick and convenient and with customer service always a top priority.n

Spring 2017 THE QUARTERLY

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DIGITAL MEDIA

USEFUL APPS FOR TRANSPORTATION A Round-Up of Taxi-Booking Apps for Residents in MENA

and digital marketing has also been of a crucial importance for us. The share of our digital and social advertising continues to grow year by year and we plan to increase our focus in that area.

Moreover, ensuring a mobile friendly version of our website and ability for our customers to redeem their loyalty point from our Gulf Rewards program has helped drive more traffic to our sites and increase interest in our products and services.

LAILA AL-QATAMI

Assistant General Manager for Corporate Communications GULF BANK OF KUWAIT

From a marketing perspective, what is being done to engage millennials, as they become an increasingly large share of your customer base? What channels/ strategies do you use?

As we all are aware, millennials are extremely tech savvy, as well as independent. They generally don’t want to tie themselves up in form-filling and bureaucracy and look to engage with banks and companies that clearly have their best interests at heart. Millennials want to develop partnerships that will advance their own personal goals and help them gain a firm footing in today’s economy. We have the power to support this up-and-coming demographic.

Gulf Bank has clearly focused its marketing strategy on youth engagement through implementing a social media communication strategy that reaches out and responds immediately to young consumers. Investing in digitalization

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THE QUARTERLY Spring 2017

Additionally, our corporate social responsibility policy is specifically directed towards millennials. In the last few years, we have been supporting and sponsoring various initiatives and programs that foster entrepreneurial spirit and help youth develop successful business ideas and plans. We have also been majorly involved in programs that contribute to the establishment of a well-founded ecosystem, targeting entrepreneurs and SMEs and fostering a culture of entrepreneurships.

We have partnered with the National Fund for Small and Medium Enterprises Development, where we give a great importance to the diversification of the Kuwaiti economy and the creation of employment opportunities. Through this partnership, we are providing the bank’s infrastructure and financial support to help young people develop their projects and realize their dreams.

Education is also another element of our initiatives. Through our work with INJAZ Kuwait, we offer educational programs on entrepreneurial and leadership skills to build successful careers for high school and university students. We believe this along helps to address one of the major challenges of our region, which is youth employment.

Are you developing an omni-channel and seamless customer experience? How

do you consider physical and digital execution for a holistic customer-centric experience?

Developing a solid omni-channel technology platform is a key element in our strategy. We have already embarked on developing a customer experience, that allows customers to enjoy seamless, personalized service across every touch point.

We have already applied this thinking in a number of our recent projects - for example, paying monthly bills or depositing a check, by a click of a button. Through the exploitation of the appropriate technologies, we have managed to create common online and mobile banking offering and we are now incorporating our automated phone banking services into this omnichannel architecture.

Overall, our goal is to transform the banking experience into a customercentric one where interaction is essential.

Do you map customer journeys? May you share any insights on behaviors from brick-and-mortar to online? What are their preferences?

Our data shows that customers who are spending less time in branches are increasingly using the internet and mobile banking platform as their most frequent way of interacting with their bank.

Customers of all types are beginning to rely heavily on their smartphones in daily life, with younger customers being the most dependent on mobile service access.

In fact, the convenience of being able to bank anywhere at any time without having to visit a branch, and ease of use, are the reasons why customers attach such importance to online banking.

They expect to follow up with bank staff through digital chat, video or other realtime options rather than having to visit a branch or separately call a contact center.

This suggests that a compelling digital offering and a strong online and mobile offering appeal to most our customers and will be the reason behind their choice of banking provider.

What’s the power of mobile in the consumer’s journey? Are you able to share stats on the amount of transactions conducted on mobile?

We have chosen to focus our development on mobile platforms.

We have created a world-class mobile banking service that has helped Gulf Bank surge ahead of its competition through offering groundbreaking biometric security, exceptional navigational efficiencies and market leading transactional capabilities. This is the starting point of our digital strategy that is aimed at leveraging the fact that mobile banking usage in Kuwait is very high. Almost half of our customers prefer mobile banking as their preferred channel of banking for simple tasks like transfers and checking statements. It is a quick and easy way for customers to interact with their banks.

to Bank,” in the first two months from its launch in May 2016 resulted in approximately 75,000 app downloads/ updates, an almost 250% increase in the monthly growth of the Bank’s digital customer base and around 800% increase in monthly mobile banking.

The login rate in the same period has jumped by 121% and the financial transactions as well by a full 12%. Mobile-

sourced interest-risk-free fee income also increased because of the new ability to send more transfers of higher value on an ad-hoc basis without needing to firstcreate a beneficiary.

Since May 2016, the ability for customers themselves to manage transactions by a click of a button has resulted in a decrease in the overall number of customer physical visits to the bank.n

“Millennials want to develop partnerships that will advance their own personal goals and help them gain a firm footing in today’s economy.”

We have therefore invested heavily in these channels and have been recognized for our efforts on mobile application and digital banking by numerous international awards and recognitions.

On current thinking, by the end of 2017 we anticipate over 50% of the Gulf Bank’s customer base to be digital, and of those at least 50% to also use our mobile banking app.

What percentage of customers are active users of digital channels? How has their behavior changed as they adopted digital channels?

Clearly, much of what you are asking for has to remain commercially confidential. However, to give you some indication, customer appreciation of the greatly improved experience and capabilities of the new app, “Blinking

Spring 2017 THE QUARTERLY

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ENTREPRENEURSHIP

USEFUL APPS FOR TRANSPORTATION

THE FINTECH INNOVATION ECOSYSTEM

IN MENA

By Lynn El Bizri | @lnlne

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THE QUARTERLY Spring 2017

F

intech has become one of the hottest topics in the startup scene and is one that will continue to dominate in 2017, with over 1000 fintech companies worldwide disrupting and transforming the world of finance. In the past 7 years, consumers have become more and more accepting of alternative channels of payment, banking, lending, fundraising, etc., and the fintech ecosystem has also proved transformative for both the local economy and SMEs, nurturing technological innovation, improving customer experience and enabling growth opportunities for many sectors including software, data analytics, payments, platforms, mobile banking and algorithmic asset management systems.

Fintech’s growth can clearly be seen in the massive rise in investment, with around $50B invested globally since 2010, and $5.3B invested in the first quarter of 2016 alone, according to a fintech report

by Accenture. With global investment predicted to reach $8B in 2018, and several fintech IPOs commanding multibillion dollar valuations in the past year, the fintech sector is prime to reach the next level of maturity and move into the mainstream.

The State of Fintech in MENA

The MENA region has accounted for the smallest proportion of global fintech funding over the years (around 1%), however it has also experienced the most explosive growth, according to research conducted by BCG. Crucial elements needed to support the development of the ecosystem (such as business environment/ access to markets, government/regulatory support, access to capital and financial expertise) all exist, and as investment into the region steadily increases, fintech has begun to build momentum.

‘We are witnessing growing innovation throughout the Middle East, and that is reflected in the gradual development of the fintech sector across the region’, says Godrey Sullivan, Partner & Managing Director of BCG Middle East.

Today, there are more than 50 fintech startups in MENA, according to research conducted by ArabNet, yet 72% of all fintech startups hail from four main

fintech hubs – the UAE, Lebanon, Jordan and Egypt. Among those, the UAE takes a clear lead, hosting as many fintech startups as Lebanon and Jordan combined, exhibiting the lowest failure rate (13%) and having the highest share of frontier tech startups such as money transfer, wealth management, insurance and cryptocurrency. Yet among the seven emirates, it is Abu Dhabi that is leading the charts, having recently launched a Regulatory Laboratory (RegLab) that allows participants to develop and test their fintech propositions in a safe environment with lighter regulations.

RegLab is just one of many types of programs that are supporting and nurturing the creation and growth of regional fintech enterprises. Fintech accelerators, which are new to MENA, popped up across the region last year and currently include the regional accelerator Fintech Factory, Fintech Hive (UAE), 1864 (Egypt), and AUC’s Venture Lab Fintech Accelerator (Egypt).

Fintech Hive, DIFC and Accenture’s new fintech accelerator program, is the latest accelerator to enter the market and aims to identify the best entrepreneurs within the financial services industry, and offer them the opportunity to test and modify fintech innovations, as well as access feedback from potential customers and funders. The program will start accepting applications for interested companies towards the end of March, with between 12 and 15 companies due to be selected

by July. Emirates NBD, Mashreq, Visa International and HSBC will be the first local and international participants in the accelerator program.

The 1864 Accelerator was launched by Barclays Bank and Flat6Labs last year and is one of two local fintech-focused startup accelerator programs in Egypt.

The 14 weeks accelerator seeks to foster the fintech innovation space in Egypt by enabling entrepreneurs to transform their disruptive ideas into commercially viable solutions. In the accelerator’s first cycle, which ended in December, 16 startups were chosen from over 200 applicants for a 5 day bootcamp, after which 8 finalists were selected to receive training,

mentoring, office space, technical support, legal consultation and E£150,000 in seed funding in exchange for 10-15% equity. The 8 graduating startups included Bees365, Card Switch, Save.it, Olly, Yalla Nsadar, Carsurance, Entej and Moneyfellows.

In July, the American University of Cairo and Commercial Bank partnered to create AUC Venture Lab Fintech Accelerator, powered by CIB. The new specialized program aims to develop and support fintech startups in Egypt in areas such as digital and mobile payments, peer-to-peer lending, customer interface, personal financial planning, retail trading and investing and remittances. Through a 12-week acceleration program, fintech startups will receive specialized support to grow and launch their businesses, gain valuable insights from some of the smartest minds in the startup and fintech world and increase their impact on the Egyptian economy. Startups will be selected through a rigorous process based on the novelty of the idea, team’s track record and cohesion, scalability and potential for commercialization as well as the team’s tenacity and commitment to success.

Last March, PayFort, the online payments engine, announced the launch of its fintech accelerator Fintech Factory at Wamda’s 2016 Mix N’ Mentor event in Cairo. The accelerator was launched in order for PayFort to continue meeting the demands of their merchants and innovating faster by investing and collaborating with fintech startups. To be eligible for the accelerator, startups need to be in fintech and relevant to PayFort’s merchant base. In return, startups can receive up to $100,000 during the first phase; with the opportunity to possible receive additional funds through Fintech Factory’s investment partners at later stages. The fintech accelerator plans to invest in and enable 4-5 fintech startups a year.

The Growth of Fintech Startups

Half of all fintech startups in MENA did not exist prior to 2013, and according to Jonas Feller, research associate at

Spring 2017 THE QUARTERLY

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ENTREPRENEURSHIP

USEFUL APPS FOR TRANSPORTATION Wamda, the number of fintech startups in MENA has grown 39% annually since 2010 and currently outnumber education, energy and healthcare startups in the region. While the primary target of fintech companies worldwide has been the retail and corporate space, capital markets are also being affected by growth in trade and investments, data and analytics, and blockchain technology and planning. “The emergence of new sectors in the Fintech space is mirrored by the MENA market; we are just beginning to see the arrival of crowdfunding/lending, blockchain and particularly payment fintech businesses cropping up across the region,” says Sullivan.

Ghandour, partner at Wamda Capital.

innovation adoption, and in the region,

regulations in MENA are problematic for startups and VCs, in order for a fintech startup in MENA to grow, it needs to be fostered from early on. ‘We believe in partnering with companies from the initial stages until they become industry leaders,’ says Shailesh Dash, founder and CEO of Al Masah Capital. Therefore, investments at the seed level or during early rounds of capital-raising are crucial and highly valuable. ‘Fueling money into the fintech space allows two major developments to occur: easier access to funding for those who need it and easier methods of spending money for those who seek it,’ says Omar J. Sati, Managing Director of Dash Ventures. By lending support and resources to regional fintech startups that are aspiring to convert their ideas into reality, institutional investors and family businesses have an opportunity to partner with, foster and incubate the fintech ecosystem.

for fintech companies. ‘Most fintech companies require regulatory approval before they launch, which requires capital, connections and patience. The process to get approval is often not defined and regulators have not had to play that role in the region before’, says Ghandour. Moreover, while incubators and innovation hubs are supporting the creation and growth of fintechs in the UAE, in less mature fintech environments, regulations are lagging and the involvement of both governments and financial institutions is necessary to regulate, set policies and provide the necessary infrastructure for the industry to grow sustainably and foster innovation.

‘Fintech companies today are not directly monitored, supervised or regulated, but instead subject to existing financial and banking regulations. This limits fintech operations and restricts the development of the overall ecosystem’, says Sati.

In addition to funding, regulation is seen as one of the most important factors that can either catalyze or stall

The Role of Banks in Fintech

is also one of the biggest challenges WhileApps the controlling and in MENA A Round-Up of Taxi-Booking for environment Residents

Within these sectors, there are a number of startups that have successfully paved the way for the Middle East into the international spotlight, attracting the interest of VC firms and raising millions and thousands of dollars to fund their businesses. Among these startups are players from diverse fields – crowdfunding (Liwwa, Zoomaal, and Eureeca), retail financial services (bayzat, souqalmal, compareit4me.com), and payments (MadfooatCom).

The Challenges facing Fintech

Although growing, fintech is still fairly new in the Middle East and has faced a number of obstacles in its development.

Many of the initiatives launched to promote financial technology services have stalled, and fintech startups continue to face several challenges including lack of access to capital and regulation.

According to a survey by the World Bank and the Union of Arab Banks, nearly 63% of SMEs do not have access to finance. ‘Local investors have yet to build an appetite for the industry, and because of that, we have to look further afield for investment opportunities’, says Mousa Beidas, CEO and Co-Founder of the payments solution startup Bridg.

Moreover, ‘since the cost to start a fintech company is particularly high, requires more patience and has a higher risk of failure, most investors would rather deploy capital in companies with less risky business models,’ says Fares

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THE QUARTERLY Spring 2017

While regional governments have started to welcome the rise of fintech, established

financial institutions operating in the region view it is both an opportunity and a threat. Banks have a number of advantages over fintech startups: they are in a position of trust with customers; they have access to years of data and are intimately familiar with the regulatory environment. However, they are also infamously slow in embracing change and delivering to customers what they want and need, creating a gap that fintech startups have gradually started to fill with their innovative, digital, and customeroriented solutions. According to Wissam Khoury, managing director of FIS (Fidelity National Information Services), banks in the region need to embrace fintech and begin developing plans to capitalize and internalize advancements in technology, rather than try and compete with emerging firms in the fintech space.

Banks in the region have started embracing fintech in different ways. The Central Bank of Bahrain, for example, recently announced that it is considering introducing regulations on fintech and intends on inviting technology companies to set up offices in the Kingdom and

serve the entire GCC region. Several banks have also launched fintech-related competitions. Emirates NBD launched a global competition ‘Group Fintech Challenge 2016’ in February 2016, inviting fintech startups from around the world to design financial services tools for the chance to win cash prizes.

In November 2015, Emirates Islamic Bank launched ‘El Appathon’, as part of UAE Innovation Week, inviting app developers to create innovative and impactful banking apps in 36 hours. In October 2015, Decode Dubai, a 36hour hackathon sponsored by First Gulf Bank, challenged 22 teams to build and develop banking and financial solutions to improve the banking experience of consumers. Finally, some banks such as Bank Al Etihad, the Arab Bank, and Bank Al Ahli, have approached fintech favorably by underwriting substantial amounts of capital in fintech startups (like Liwwa) as institutional investors.

However, to fully realize the disruptive potential of financial technology, banks and fintech startups need to partner up and share their experience and expertise.

‘If banks wish to compete and remain relevant, they will have to wake up to fintech and the accelerated shift to ‘digital-first-physical-second’- says Sati, or risk being eliminated. Established financial institutions can learn a lot from startups, adopt some of their methods and even partner with them. Fintech startups can also help banks improve their consumer experience, reduce operating costs, and discover new opportunities for growth. As for banks, they can benefit startups with their brand credibility and consumers’ trust, expertise in financial risk and regulatory demands in addition to providing them with an audience for their apps. They can also build initiatives such as accelerator and incubator programs which will allow the benefits of both players to be enhanced in a collective environment and provide startups with what they lack in order to offer banks with what they need.

The Future is Fintech

Despite these challenges, there is a visible and growing infrastructure of accelerators, incubators and investors

in MENA, and it is the consensus and collaboration among players – governments, financial institutions and entrepreneurs – in the fintech ecosystem that determine its success and foster financial transformation. To encourage entrepreneurial activity and improve the region’s overall competitiveness, governments must apply policies and a regulatory environment that will improve the development of the ecosystem. To encourage innovation and strengthen their competitive position, financial institutions should partner with fintech startups and contribute their market expertise. Finally, in order to benefit from greater access to capital, market expertise and an open market, entrepreneurs should continue to contribute innovative and disruptive technologies to the ecosystem.

While MENA’s fintech ecosystem may still be in its infancy, it has already witnessed several success stories. Last year, Abu Dhabi launched the region’s first ‘sandbox’ to facilitate fintech growth, and incubators, enterprise development funds/programs and innovation hubs in the UAE have been supporting the creation and growth of local fintech entrepreneurs. Lebanon, which has experienced exponential growth since the announcement of Circular 331, is currently home to several fintech players including leaders such as Pinpay and Zoomaal. Even nascent fintech environments like Jordan and Saudi Arabia have seen major progress in the fintech space. In August, Jordan’s accelerator Oasis500 held the country’s first fintech workshop and in 2015, the Central Bank of Jordan launched an electronic payments system designed to allow users to receive and pay bills electronically. As for Saudi Arabia, it has promised to put fintech at the heart of the King Abdullah Financial District rising in Riyadh, and informed speculation is that a large amount of the $100 billion Vision Fund launched

by Softbank and Saudi Arabia will be reserved for investment in the next generation of fintech. The future for the fintech industry in MENA look promising, and with the support of the region’s financial institutions and governments, it will only keep growing.n

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FINTECH STARTUPS

MADFOOATCOM Founded in Jordan in 2011 by Nasser Saleh, MadfooatCom is an online, real-time, electronic payments solution company that got its start in 2014 with the support of Oasis 500. The platform connects banks, billers and customers, facilitating digital bill payments and inquiries, and can be tied into other innovative payment solutions as well, such as mobile wallets.

MadfooatCom’s solution acts as a bridge between billing entities and banks, allowing the entire payment process to

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be carried out online, in a secure manner.

In this way, the platform benefits all stakeholders involved – bankers are able to save time and cost and improve customer service, billers can improve payment collection and reduce physical queuing and customers can make payments in one click through online and mobile banking. In 2013, MadfooatCom also won the contract from Central Bank of Jordan to create, administer and operate the country’s national electronic bill presentment and payment service gateway, eFawateerCom. Since then, the startup has grown rapidly, and has connected more than 50 billers with 95% of Jordan’s banks and processes more than 7000 bills daily (worth more than $100M to date).

In 2014, MadfooatCom raised seed funding from the Jordanian incubator Oasis500 and angel investors from Jordan and Saudi Arabia to officially launch their platform. In 2015, they went on to close an investment round (Series A with $5M) led by Capital Bank, Cairo Amman Bank, and Etihad Bank and Saleh says they are now looking to raise a Series B round of around $15-20 million to fund their expansion in emerging markets such as Algeria, Palestine, Kenya and Morocco. Due to increased investor interest in fintech and the rise of fintech accelerators, MadfooatCom are also now considering creating a fintech incubator to nurture the fintech sector.

EUREECA Founded in Dubai in 2013 by investment professionals Christopher Thomas and Sam Quawasmi, Eureeca is a global equity crowdfunding platform that allows members of its investor network to buy shares in growth-oriented businesses, while providing operational businesses with crucial access to capital. Eureeca is a multi-regulated platform, having received regulatory approval from the UK Financial Conduct Authority and the Securities Commission Malaysia in 2015 and recent approval from the Netherlands Authority for the Financial Markets.

Eureeca uses a simple crowdfunding

ZOOMAAL Founded by Abdallah Absi in 2013, Zoomaal is a crowdfunding platform aimed at supporting innovative and creative projects in the Arab world with the mission of ‘bringing back Arab creativity.’ In the past 3 years, Zoomaal has quickly asserted itself as one of the region’s leading crowdfunding platforms and has succeeded in launching over 100 successful funding campaigns totaling over $1.6M for projects and creating 500+ jobs. It’s most successful campaign ‘#ShatilaAlive’ raised over $100,000 in funds.

Last summer, after customers repeatedly expressed interest in investing in Eureeca

itself, Eureeca raised $400,000 in 12 days with a self-crowdfunding campaign ‘Eureeca on Eureeca’ that attracted 44 institutional and everyday investors from the UAE, the UK, India, Saudi Arabia, the Netherlands, Italy, Canada and Jordan. The capital raised will be used to boost Eureeca’s international growth plans in Continental Europe and Southeast Asia and continued development of their equity product offering. Since their platform launch in 2013, Eureeca has set up offices in London, Kuala Lumpur, and most recently in the Netherlands, grown to an active investor base of 12,000 from 42 countries with an average investment size of 5,267 Euros, and funded 18 businesses with 3.3M Euros successfully raised.

Similar to the US crowdfunding site Kickstarter, Zoomaal’s model is a rewardbased, all-or-nothing one, meaning project owners must offer investors non-monetary rewards for their support and if the funding goal isn’t reached by the deadline, all the money is returned to the original funders. However, Zoomaal also only accepts projects that are deemed to be sustainable and not considered ‘one-off ’ charity projects. Moreover, applicants must be either Arab citizens or residents of MENA with projects to be implemented within the region. Once a project is successfully funded, Zoomaal only gets a 5% fee from the fund amount, and 95% goes to the client.

Zoomaal has been a finalist in the MIT Arab Enterprise Forum business plan competition, is backed by four Middle Eastern VC firms, has been featured on CNN, Forbes, and IHT and has raised more than $735K in 6 rounds of funding from investors such as MEVP, MVI, NV2, Saned Partners, Sawari Ventures, Wamda Capital, HIVOS, and Cairo Angels. Over the past few years, Zoomaal has hosted several crowdfunding workshops, held 8 crowdfunding challenges and recently launched a global fundraising platform ‘GivingLoop’ which is tailor-made for nonprofits and social enterprises to achieve greater impact in the Arab world and beyond.

model that focuses on making both investments and funding a simple process for all involved. Businesses interested in raising funds in Eureeca must be operational SMEs raising at least $250,000, and must first pass through Eureeca’s screening and due diligence processes before starting their campaign.

As for investors, once they have registered, they can then deposit funds in their Eureeca account and are ready to start investing. If the proposal receives 100% of its funding within the time allocated, Eureeca take over and complete the share issuance process and issue the share certificates to funders.

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SOUQALMAL Launched by Ambareen Musa in May 2012 as a financial comparison website, Souqalmal.com empowers users to compare credit cards, personal loans, car loans, mortgages, bank accounts, deposits, mobile phone and broadband plans, as well as schools and nurseries in the UAE and KSA market. In addition, thanks to the advisory and educational element of the site, users can also get advice on what they can and cannot afford, and tricky terminology and jargon is explained.

COMPAREIT4ME Launched in 2012 in the UAE by Jon Richards and Samer Chebab, compareit4me is the leading financial comparison platform in the Middle East that helps users to find and compare credit cards, personal loans, mortgages, car loans, insurance and bank accounts from a diverse range of local and international banks and financial institutions.

Until recently, compareit4me focused solely on comparing banking products and services, helping new clients select the best banking options from over 10 insurers and 25 products. However, early

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Last June, souqalmal.com moved into insurance and launched its online end-to-end car insurance comparison platform across the UAE, which has since become the fastest growing online retail car insurance portal in terms of sales.

During the first six weeks post launch, Souqalmal.com reached $600,000 in total sales, indicating a strong appetite among UAE consumers for an online insurance portal. The souqamal.com car insurance platform not only allows users to get real time quotes in less than 60 seconds and have their policy issued to them in 60 minutes but customers also have access to a UAE-based call center 7 days a week for

last year, compareit4me launched their end-to-end car insurance comparison platform, which allows users to compare and buy instant car insurance quotes and online via credit card or cash collection, a first in the MENA region. The new product has already generated more than 20,000 quotes, sold more than 600 car insurance policies, and saved customers almost AED 1 million in its first month of operation. Since launching the car insurance platform in March, the firm’s revenues have grown approximately 2.5 times, they have sold close to $2M policies and the firm is growing 80% per month, according to Richards.

In addition to those successes, the

questions/support.

Since launching, Souqalmal.com has raised a total of $4.5M, including a $3M round with returning investor Hummingbird Ventures and a private investor in addition to an undisclosed amount from WOMENA in November 2016. Sales have also averaged a growth rate of 400% since the launch of souqalmal, according to Musa, and the startup has celebrated several successes such as being named Online Business of the Year at the Gulf Capital SME Awards in 2015 and being shortlisted for the upcoming MENA Insurance Awards this year.

comparison site secured $2.4M in investment in its latest funding round, with more than half of the investment coming from repeating investors Wamda Capital, STC Ventures, and Dubai Silicon Oasis Authority, who invested $3M in the company’s Series A funding round in 2015, bringing the total amount the company has raised to almost $6M. Compareit4me will use the investment to build its recently launched UAE car, home, travel and life insurance comparison business and fund a wider expansion across the MENA region.

Compareit4me currently has eight countries already on board, and plan to make their services available across all of MENA as well as in Asia and Africa.

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USEFUL APPS FOR TRANSPORTATION A Round-Up of Taxi-Booking Apps for Residents in MENA

LIWWA

businesses and has current applications for over $50M from qualified companies.

Based in Amman, Liwwa is a crowdfunding and investment platform that was founded by Palestinian entrepreneurs Ahmed Moor and Samer Atiani, during Harvard University’s Innovation Lab in 2013. The platform connects small businesses in need of capital with fixed-income investors, and addresses the problem of extremely low financing rates in the region, which make it very hard for SMEs to get a loan. The company’s mission is to deliver job and income growth by helping to close the $240B SME funding gap in the MENA region. The company’s first year of operating saw it lend $1.8M to 81 small

The peer-to-peer lending startup focuses mainly on providing loans to small businesses, operating almost entirely online and sourcing capital from retail and institutional lenders, rather than depositors. The platform allows borrowers such as SMEs to access capital and apply for small business loans while investors earn regular monthly returns on their investments and grow/ diversify their investment portfolios.

Liwwa conducts in-house reviews of the small businesses’ credibility and has two revenue streams, first they collect 2% of every payment that a borrower makes into the network, and they also lend their

BAYZAT

Firstly, the platform enables users to find, compare and buy insurance policies in real-time, and once agreed on a policy, users receive free access to Bayzat’s unique software ‘Bayzat Benefits’ which allows them to access all their medical benefits on their mobiles as well as select healthcare options within their policy while traveling. Bayzat Benefits also offers online tools to HR departments to automate processes associated with managing their employees’ health benefits, and assists with tasks such as enrollment and filing claims. Bayzat also works with insurers to get customized group policies and generates revenue by charging insurers a commission.

Dubai-based Bayzat began as a platform for people to acquire and compare different financial products. However, after launching their health insurance service, co-founders Talal Bayaa and Brian Habibi were surprised by the demand for the service and the gap in the market. Therefore, the team decided to refocus, and today, Bayzat is a cloudbased technology platform focused solely on healthcare that helps individuals and companies find the most suitable medical insurance.

Bayzat currently offers two services: Health Insurance and HR automation.

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In August 2016, Bayzat closed a $3.6M

own money to borrowers.

In March 2015, Liwwa raised $500,000 in a seed round led by DASH Ventures, with Bank Al Etihad and MENA Venture Investments, and in April 2016, it raised $2.3M in a Series A round led

by Silicon Badia’s Badia Impact Fund, with DASH Ventures and Samih Toukan, Chairman of Jabbar Internet Group, participating in equity financing, thus raising $2.8M in total. Liwwa plan to use the funding to develop their ability to assess applicants using technology rather than traditional credit ratings as well as grow their underwriting capacity in Jordan and the MENA region while opening the company’s New York software development and data center.

series A round from returning investors Beco Capital, Precinct Partners and other angel investors, bringing Bayzat’s total funding to $4.6M. The funds, which will be used to launch products that can better serve customers, will also help the team bring more innovations to the market and scale even faster. Since the last round, Bayzat has grown 100% every quarter, and currently has around 50 companies with over 50 employees enrolled in plans across the platform including clients such as Deliveroo, Baker & Spice and Propertyfinder, and has over 4,000 individuals comparing policies from insurers such as Axa, Aetna, Orient Insurance and Al Sagr National Insurance Company.

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FINTECH STARTUPS IN MENA PAYMENTS

CROWDFUNDING

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RETAIL FINANCIAL SERVICES

CRYPTOCURRENCY

DIGITAL BANKING/BANKING TECH

WEALTH MANAGEMENT

PFM (Personal Finance Management)

SOCIAL NETWORK

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10 MENA FINTECH STARTUPS

A Round-Up of Taxi-Booking Apps for Residents in MENA

to Keep on Your Radar

By Lynn El Bizri | @lnlne

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I

n every issue, we bring you a list of startups from the MENA region to keep an eye on. This time, we have selected a diverse range of fintech startups that specialize in everything from alternative payment and peer-topeer lending to crowdfunding platforms, and are changing the way money and individuals, businesses and corporates handle financial services.

Hyundai’s Startup Competition and then went on to beat 21 competitors and win $10,000 at BDL Accelerate’s Early Stage Startup Competition in Dec 2015. In 2016, ReAble was the 3rd place winner of the Startup Demo at ArabNet Beirut 2016 and was also one of 10 companies selected from 400 applications to join Techstars 13 week accelerator program in Cape Town. This February, supported by a US $50,000 loan from Barclays, Safi and Sawaya will release their ReAble Pay platform, which will allow users to finally try their financial app for the first time.

ReAble’s potential market currently is comprised of 35 million people that fit a target market of mid to high cognitive functioning.

search box. The customer is then transferred to the Amazon website with CashBasha’s top bar, and can search and shop for all the items they would like to purchase. Once done and on the Checkout page, customers can select their cash payment method, view other order related details, and place their orders. Upon completing their order, customers then receive an email or SMS confirmation and are contacted by CashBasha’s customer service representatives to arrange for an appropriate cash pickup appointment. For items shipped from within the United States, the average delivery time via the selected courier is about 9-14 business days from the time of payment.

Based in Lebanon and founded by Paul Safi and Emile Sawaya, ReAble is a startup that builds applications and tools for people with special needs.

Their first product, the ReAble Wallet, is a financial management tool that allows users with cognitive challenges to conduct transactions in a simple manner, and monitor their purchasing habits.

The wallet keeps parents or guardians informed of all transactions taking place and how well the money is being managed. In addition, the ReAble Wallet can be used as an educational tool to teach concepts of financial literacy that can be applied to real life situations.

Country: Lebanon Launched: 2015 Category: Personal Finance Management

In 2016, CashBasha were selected as one of the top-notch startups to represent Jordan at the Mobile World Congress (MWC) in Shanghai. They also went on to win the Startup Istanbul 2016 Challenge and came in first place out of 2,700 startup companies who applied to the challenge from around the world.

The company currently receives around 8,000 orders per month, and monetizes through a $5 fee added to each order, in addition to the discounts it receives from the shipping company. The company is already making profit and has secured strategic investments from Aramex Ventures and 500 startups. With that funding, CashBasha has expanded its operations to Saudi Arabia and are seeing an average of 23% month-onmonth growth and over 15% customer conversion rate.

To start using the ReAble Wallet, users input the bank notes they are carrying into the app via the intuitive interface which supports multiple currencies. Once a purchase is made, users take a picture of the receipt, and the ReAble Wallet is able to detect the purchase total and decide which bills the user should use from their wallet to pay. The application also comes with built in text-to-speech which makes it easy for anyone to pick up and start using the app. The ReAble Wallet also facilitates budgeting, giving users the ability to set a categorical budget and follow the budget, by using prompts/status updates when the user to about to go over a threshold and uses visual representations to show them their current financial status.

In late 2015, ReAble received 1000$ in

CashBasha was established in Jordan in 2015 by entrepreneurs Fouad Jeryes and Sinan Taifour, and is a regional commerce technology company. The startup facilitates ecommerce by shifting the Cash on Delivery (COD) model into a Cash before Delivery model, meaning money gets collected by the courier and is transferred to the merchant before the product is delivered. Moreover, the model serves as a medium between Arab consumers and foreign sites that do not accept local cards or cash and do not ship to the region. Currently, CashBasha serves customers looking to shop from Amazon.com’s entire US catalog and have the products delivered to them in Jordan or Saudi Arabia.

To shop on Amazon through CashBasha, customers need to simply go on the website and enter the name of the item they’d like to order in the homepage

Country: Jordan Launched: 2015 Category: Payments

Card Switch SAL is a fintech company with a mission to eliminate card fraud, combat cash transactions, and enhance customers’ trust and experience as well as

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USEFUL APPS FOR TRANSPORTATION help drive banks’ card income. Founded early last year by Roger Abboud and Mobile Technology Tomorrow, Card Switch’s flagship product is an application that connects all payment cards (credit, debit or prepaid) with the user’s smartphone allowing users to ‘Switch On or Off ’ their cards and decide when, where and how transactions should be authorized.

organization exploring the impact

do not have access to insurance so

currencies in the region. Doudin decided to launch the startup after she had difficulty buying bitcoins in the region and her aim is to build the largest digital currency exchange and payments infrastructure platform in the MENA region.

mobile operators and other industries to help both tap into new customer segments and product opportunities to maximize their revenue streams while increasing customer loyalty to the brands.

Democrance also conducts in-depth customer research and help insurers shift existing products to fit the unanswered needs, then use their mobile technology platform and partnerships with telecom companies to offer and sell these micro insurance products at scale.

of blockchain and digital Democrance aims to work with insurers, A Round-Up of Taxi-Booking Appstechnology for Residents in MENA

The Card Switch application has several different ‘switches’: the Control Switch, the Alert Switch, the Statement Switch and the Analytics Switch. The Control Switch allows users to switch on or off their card(s), channels (ATM, POS, E-commerce), merchant categories (supermarket, gas station restaurant), locations and their spending limit. The Statement Switch allows them to tag their transactions as business or personal, add notes, and take photos of receipts. The Alert Switch allows users to switch on or off alerts by channels, card settlement, or card limit reached and more. Finally, the Analytics Switch allows users to compare their spending by channel, merchant, category or period.

In 2016, Card Switch were shortlisted as a finalist for the ‘Best Technological Innovation’ award at the Seamless event in Dubai, were selected to pitch for the SLUSH GIA Competition, and were selected as one of 12 startups to present their idea in front of an international jury at Seedstars Beirut.

Country: Lebanon Launched: 2015 Category: Digital Banking

Launched in late 2014 by Ola Doudin, a Jordanian entrepreneur, BitOasis is the first digital currency wallet and exchange service in the Middle East that enables users to buy, sell and secure their bitcoins. It is also a founding member of the Dubai-based Global Blockchain Council, a 32-member

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To create a bitcoin wallet and an exchange account, users must create an online wallet on the BitOasis platform.

After creating their account, users can immediately start sending and receiving bitcoins from around the world. BitOasis uses multi-signature technology to secure users bitcoins and customers are prompted to enter a multi-digit authentication code anytime they login or attempt to send bitcoins. To buy bitcoins, users start by buying a voucher with the AED amount they choose. After selecting the voucher amount, users must send a wire transfer with the AED amount or pay in cash via a bank cash deposit. After the payment has been received, users can immediately convert their AED credits to bitcoins at the exchange rate available.

In May of last year, BitOasis raised an undisclosed amount in a seed round from 4 investors, led by venture capital firm Wamda Capital, which will allow BitOasis to expand its presence in MENA territories and add additional staff. The platform currently works in five nations: UAE, Qatar, Kuwait, Bahrain and KSA, yet the mobile wallet is accessible to clients in North Africa, the Middle East and Asia.

Country: UAE Launched: 2015 Category: Cryptocurrency

Founded in 2015 by Michele Grosso, Democrance’s mission is to democratize insurance by making it available to a wider population through a mobile application. Millions of people in MENA

Democrance is planning to disrupt the insurance market by partnering with insurance companies and mobile operators to offer insurance to the underserved micro-insurance market in the MENA region. The startup provides a fintech solution that makes insurance affordable and accessible to the people who need it most. It’s affordable, because it distributes, administers and services insurance policies only through the mobile phone, which results in considerable cost savings when compared to the traditional insurance model, and is accessible as insurance premiums are also collected through mobile payment channels instead of traditional banking ones, which the low-income population do not normally have access to. The platform aims to reach 350 million underinsured low-income earners in the Middle East over mobile phones, with premiums as low as Dh1-Dh2 a week.

Michele Grosso invested $150,000 of his own savings and borrowed money to get the platform up and running, however, the DMCC-licensed company has had enough early successes to recently start a seed round of funding. After winning the Seedstars GCC competition last September, Democrance will be participating at the Seedstars Summit in Switzerland and will pitch on the final day in front of an audience of over 1000 attendees with a chance to win 500K USD in prizes and equity investment.

Over the next five years, Grosso expects to offer even more products through an increased roster of distribution partners and wants to expand beyond the MENA region.

Country: UAE Launched: 2015 Category: Retail Financial Services

partnership with Warba Bank who are now running Ajar Online’s back office financial operations and promoting Ajar Online’s services to their corporate clients. This has allowed the company to lower their transaction fees and facilitate their penetration into the market.

Country: Kuwait Launched: 2015 Category: Retail Financial Services

Talal Alyaseen and Shaheen Alkhudhari founded Ajar Online in Kuwait after Alkhudhari found it a hassle to constantly withdraw rent money from the bank and wait for his landlord to collect it. After suggesting the idea of the service to Alyaseen, now CTO of Ajar Online, they studied the real estate market and the problems landlords face in collecting rent and based on their findings, developed a cloud service that offers quick and efficient online rent collection via SMS and email.

To use Ajar Online for online rent payment, landlords first add the details of their tenants and properties to Ajar’s platform. Tenants then receive a monthly automatic payment notification via SMS or email, and can instantly pay their rent online using K-net. In order to generate revenue, the company charges transaction fees on rent payments. For landlords, the benefits of Ajar Online include a higher percentage of on-time rent payment, less administrative work, and landlords can view live updates of their tenants’ payments, statuses, histories and collection reports. For tenants, Ajar Online means fewer trips to the bank, automatic reminders on when rent is due, and tenants can pay their rent wherever and whenever they want.

In November 2015, Ajar Online won the first-ever KIPCO Tmkeen Award for Young Entrepreneurs and $100,000 worth of services from the KIPCO Group, including financial, strategic, and operational consultation sessions, market studies, insurance coverage, and advertising services. The startup was also among the finalists of the MIT Enterprise Arab Startup Competition.

In early 2016, the company signed a

Based in Jordan and founded in 2014, AFKARMENA is a crowd funding reward-based online platform in the MENA region for all creative ideas ranging from game development and music albums to supporting a cause through an NGO. The platform helps creative entrepreneurs and NGOs showcase and pitch their ideas to the public and earn contributions in return for rewards. Moreover, creators retain full ownership over their work.

To start crowd funding a project, entrepreneurs must first fill out a form for their pitch and upload a short video selling their idea. Once the idea has been reviewed and approved by the AFKARMENA team, creators can begin promoting their idea and raising funds. To be approved, the project must follow specific guidelines such as having a defined deadline, fall within the accepted categories, and offer realistic and appropriate rewards. Every entrepreneur is given 30-90 days to raise the funds needed and if the project does not reach its funding goal, all funds made to the project are cancelled. In the case of a failure to raise sufficient funds, AFKARMENA helps the entrepreneur update and relaunch their project again, and in the case of NGO/NPO projects, they have the opportunity to keep any

money raised regardless of whether they have reached their funding goal or not.

AFKARMENA charges project creators a fee of 5% and NGO/NPOs a fee of 4%. To date, a number of projects have been successfully funded through AFKARMENA with several more in the pipeline. A co-funding program was also launched last year in partnership with Women Access to Entrepreneurship Development and Training (WAEDAT) that aims to help women, in both urban and rural areas across Jordan and the region, to overcome social norms, restrictions and challenges, as well as secure funding required to launch, promote and grow their entrepreneurial projects.

Country: Jordan Launched: 2014 Category: Crowdfunding

Trriple, a UAE-based digital payments startup, launched as a company at GITEX in 2015, and plans to usher in the country’s cashless society by delivering an inclusive payments ecosystem that is available to both the unbanked using cash, and the banked using cards. The startup offers a first-of-its-kind mobile wallet that enables secure and convenient payments saving consumers and businesses time and money, while meeting the regulatory environment of UAE. For merchants, Trriple’s platform enables the merchant to charge and accept payments from the consumer using NFC, QR code or an ID number, and also enables the merchant to fund the consumer’s mobile money wallet with cash in at the merchant. For consumers, the platform allows them to pay digitally for purchases, online and in-store, transfer and send money fast and securely, credit recharge any mobile number, and much more. Consumers can fund, or ‘top up’

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USEFUL APPS FOR TRANSPORTATION their accounts in several ways: cash-in at merchant locations; credit or debit cards; ATM machine; and through salary transfers using the Wages Protections System (WPS) mandated by the Central Bank of UAE and Ministry of Labor.

Tripple has also partnered with major UAE banks to facilitate digital payments on its platform.

simply need to create a free ‘Cotizi

friends and communities join together

to collect (between 50 and 200,000 dirhams), and then invite participants to contribute via email, Facebook or Twitter.

Once the contributions are received, the amount can be collected directly on mescadeaux.ma, used as gift vouchers in partner stores, or transferred to a bank account. A Cotizi service fee is charged when a contribution is made (2.6%) or a request for money transfer is made (4.7%), and help Cotizi to cover the costs of online transactions as well as manage and operate costs on the site. As for creating a petition, the user simply needs to fill in an application, explain the reason and goal behind the petition, as well as person or institution they are targeting before circulating the petition to friends and on social media.

monthly installment into a common pot. Every month, one of the members receives the total amount in the common pot as a payout, and when each participant has received a payout from the common pot, the circle closes. Depending on the wishes of the member, the group can renew the circle again or start a new one. Money Fellows takes 1.5% to 2.5% on every payout. According to a user’s history in previous money circles, he/she can climb the MoneyFellows credit ladder to unlock features like joining circles with other 3rd degree connection users from Moneyfellows’ trusted network, join circles with higher payouts, lower fees, and get higher discounts on products they purchase from Moneyfellows’ network of commercial partners which include Amazon, Ebay, Apple, and more.

pool’, determine the amount they want in MENA in a ‘money circle’ to contribute a fixed A Round-Up of Taxi-Booking Apps for Residents

Early last year, Ericsson teamed up with Trriple to provide managed mobile solutions for the UAE banking and smart city sectors. Ericsson Wallet Platform enhances Trriple services by integrating and managing an open platform that allows users to store, transfer and withdraw money using a mobile device.

The solution will initially be available to 500,000 unbanked mobile subscribers with plans to ultimately serve the whole population of UAE. The multi-year collaboration supports the country’s Smart Government initiative, which aims to make more than 2,000 government services available via smart platforms such as mobile devices.

Country: UAE Launched: 2015 Category: Payments

Today, Cotizi.com is very successful in Morocco and represents a cross-border model for Africa and the MENA region.

At the ninth edition of the Morocco Web Awards early last year, Cotizi.com, which was known for having successfully funded a campaign of solidarity for the flood victims in southern Morocco via the hashtag #100dhpouraider, came first in the ‘Startup of the Year’ category.

Country: Morocco Launched: 2015 Category: Crowdfunding

Country: Egypt Launched: 2014 Category: Wealth Management

Cotizi is a free to use Moroccan crowdfunding platform dedicated to the collection of money or funds for events (such as weddings, birthdays, housewarming, etc.) as well as the collection of donations on behalf of associations. Recently, the website also added a platform dedicated to the creation and launch of online petitions for Moroccan associations. Focusing on social projects for economic, social and environmental development, Cotizi aims to channel the voices of field activism as well as citizen cyberactivism in Morocco and the MENA region.

Founded in Egypt by Ahmed Wadi and Adham Badr in 2014, MoneyFellows is a web and mobile-based platform that gives individuals access to interest free credit and better saving achievements, all fully powered by their social network and not their credit score. Moneyfellows achieves this by digitizing the traditional offline ROSCA (Rotating Saving and Credit Association) model.

To collect money on Cotizi, users

To start using Moneyfellows, families,

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THE QUARTERLY Spring 2017

In 2015, MoneyFellows were selected as one of 10 companies to attend the Startupbootcamp Fintech Accelerator program in London, where they received $16.25k and 3 months of free office space.

In April 2016, they were also selected as one of 12 finalists at #UberPITCHME, winning a sponsorship at ArabNet’s Digital Showcase in Dubai. Finally, MoneyFellows officially launched in Cairo last June and were selected to take part in the first round of the 1864 Accelerator Program, which they graduated from in December.