Business

UAE fintech sector gets its `eureka` moment: Adeeb Ahamed of LuLu Financial

Technology has made possibilities infinite. The speed of consumer-to-market and vice versa has progressed significantly, and it benefits businesses consistent with evolving social behaviors. The best benefit comes from the fintech sector, which has emerged as a destination, not only for banks, finance houses and traditional FIs, but also for social media giants and technology ventures, each of which wants to be used by new consumers. of many unresolved pain points. Identifying and resolving pain points for consumers is nothing new, but in the case of a sector that is so regulated as financial services, there are several pitfalls and pitfalls to creating a standardized user experience. It’s just as much an issue as an opportunity, and for every new fintech business looking at the consumer, there are hundreds of B2B technology businesses popping up in the background. Those who quietly promote the areas of user experience are actually driving the fintech engine. These B2B players, unknown to the general public, provide the nuts and bolts for the industry. They may not be fully regulated, but remain aware of the industry standards, in a way that enables the popular consumer-oriented platforms to implement their services without

Potential of microtasks

How important is it in the context of the fast-growing fintech revolution? Let’s step back and evaluate where these companies fit into the larger scheme. Consider a payment app, in which the user journey can be divided into four main tasks: 1) self-onboarding and user login; 2) the capture of the beneficiary and transaction details; 3) the execution of the transaction; and 4) inquiry and support after transaction. In its most basic form, the first task may seem like two simple actions, but when broken down, several microtasks are revealed, mostly around the areas of e-KYC, app security, user validation, and so on. Each of these micro-tasks is technology-intensive and a multi-billion dollar vertical, of which e-KYC is the latest unicorn that includes several technologies combined into a unified ‘Software-as-a-Service’ model. A single app can act as the user interface, but businesses that offer the critical backdoor processes have rightly been retained in an otherwise very competitive ecosystem. It is thus apparent that there are dozens of micro-posts waiting to be resolved, each of which has emerged as a potential vertical enterprise.

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No monopoly in the making

The good news is that the size of the industry is preventing the B2B segment from becoming a monopoly. There is no scenario that suits everyone or winners. Building efficiency and constant innovation around these micro-tasks is a necessity at this stage, and it is a welcome scenario for start-ups and technology companies looking to gain a foothold in the sector.

Public-private intervention

From the perspective of the MENA region, the growth of these entrepreneurs holds great potential – and a greater goal. As the pandemic has revealed, the region requires innovation at the highest level, if only to meet the urgent need for accessible digital solutions that can bridge the gap in matters of financial inclusion. Stakeholders in the region know what works best for the fineserv ecosystem, and collaboration between public and private enterprises to build the sector’s nuts and bolts could be an incentive to invest in the region’s larger consumer-oriented enterprises. Early indicators look positive in this regard, with studies suggesting that the number of fintech companies in the MENA region will jump by 2022. It will, of course, be more encouraging if a large part of this has the ability and support to build instruments that can progress. the sector’s grassroots level.

Built-in benefits

In this regard, the UAE is already high with a major advantage. Singapore, the UK and Hong Kong have embarked on a series of reforms to attract the best fintech talent to their shores. And similarly, the UAE’s world – class infrastructure, easy access to funds and superior living conditions put it in a strong position to nurture the ever-growing open banking ecosystem and become the innovation hub the MENA region so desperately needs. The DIFC FinTech Hive and ADGM are already home to several businesses working in the areas of contactless payments, digital identification, corporate solutions and data management. All of these are sub-sectors that solve one of the many pain points for fintechs facing consumers. The fintech sector of 2021 is ripe for take, just like the formative years of the modern financial sector two centuries ago. The time is right for the UAE to exert greater influence and build on its strengths to establish itself as a local hub of the ecosystem’s technological backbone. This will ultimately attract the right technology talent and catapult the country to a position where it can play a greater role in the region’s vision for greater financial inclusion. Adeeb Ahamed The author is managing director of LuLu Financial Holdings and vice chairman of FERG (foreign exchange transfer group).