THE DIGITAL-FIRST APPROACH
SAXO BANK MENA’S CEO TALKS ABOUT THE GROWTH OF THE REGIONAL FINTECH ECOSYSTEM AND THE CHALLENGES FACED BY THE FINANCIAL SECTOR
QHow did the pandemic turbocharge the financial sector?
The pandemic had a major impact on the financial sector, with a notable acceleration in the global trend for online trading and investment in the self-directed space primarily due to increased volatility in the worldwide capital markets.
Enabled by technological developments being made by the industry, a new generation of investors migrated to online trading, where they are better able to track and trade markets thanks to the enhanced information and education available on digital platforms.
This trend had been building for some time, thanks to the tech advancements and changing behaviours that have brought about the ’digital-first’ approach that has been embraced by both society and our industry, leading to digital and mobile platforms, apps and services, which have provided consumers with new ways to manage wealth.
How do you see the growth of fintech in the Middle East and what are the current trends in this industry?
Fintech is a broad definition for companies providing financial services via a technology-based delivery to disrupt or challenge the traditional delivery channels. We can see in the Middle East and North Africa (MENA) region across jurisdictions – both onshore and offshore – that there’s a real focus on fintech capability and offerings in the market.
According to reports, fintechs in the region have seen rapid growth, and there is evidence of genuine momentum in the ecosystem - from around 30 raising $80m in 2017 to projections forecasting 465 raising over $2bn by the end of 2022.
Many of these fintechs are supported by local government or regulatory initiatives such as the various ‘hives’ and ‘sandboxes’ we see here in Dubai and Abu Dhabi. The challenge in the MENA region, and globally, for fintechs is to identify those starups with use cases that will be converted into real commercial solutions and value-adding services. Many will not complete that journey, so to deliver winners that add value to the ecosystem and ultimately end-users or consumers, it is critical that governments, regulators, providers of capital and established financial firms continue to support the ecosystem.
What are the main challenges faced by the financial sector, and how can they overcome them?
The industry is facing many challenges. From robo-advisories to fintech solutions, many financial services disruptors are bringing real competition to the markets and causing global banks and major players genuine concern.
With the incredible development of technology over the last decade, the balance has shifted significantly. Technology has brought more providers to the market, and more information for the end-consumers to make accurate decisions. Therefore, if a firm does not embrace the digital journey and stay relevant in our ever-changing world, it will very quickly become obsolete.
What are your plans and growth strategies for the year?
We will continue to enhance our platform services and functionality to our clients. You can expect the delivery of a new investor platform, multiple new products and services, a continued focus on supporting women in investing and if the environment allows it, a return to physical events, seminars and contact with our valued clients.
Our view is that while the last two years have been a positive rollercoaster ride, 2022 is shaping up to be an even more exciting year for our clients as they take greater control of their financial futures.
The challenge in the MENA region, and globally, for fintechs is to identify those startups with use cases that will be converted into real commercial solutions and valueadding services”