Fintech's in the UAE | NOW Money
Mo Aly, Digital Lead at Simply Digital, and Ruairi McKeegan, Banking and Financial Manager at Mackenzie Jones, caught with Katharine Budd, the Co-Founder of NOW Money to find out how the initiative began and the challenges they have faced being a FinTech in the UAE.
Can you tell us about your background – what did you do before you founded NOW Money and why did you start this initiative?
My experience is across analytics consulting for various traditional financial industries – wealth management, credit cards and retail banking. My previous business purchased a stake in a US FinTech, Cardlytics, and I became part of the UK launch team. That gave me the startup “bug”. I then moved to the Middle East into a steady position. I loved the UAE but the role felt dull in comparison to the fast pace I’d become used to.
My Co-founder Ian and I noticed that “branchless” (mobile only) banking was taking off in the UK. We started researching the UAE market to see if something similar could work here, and discovered only 30% of the working population can access a traditional bank account due to high minimum salary requirements. The idea for NOW Money was born!
For the record, explain to our readers, in your own words, what NOW Money is exactly?
NOW Money is a mobile banking app for people who don’t meet the requirements of traditional banks. From the app, they can pay bills, top up phones with new credit, keep track of transaction history and access direct remittance options: all from their smartphone. Users also receive a Mastercard for their day to day spending.
Currently we work with corporates to give smartphone accounts to all their staff that they can be paid into, and manage their finances. Later this year we hope to release to the general public.
What were the early challenges you faced? Did people think you were crazy to start a venture like this and leave a secure 'traditional' banking role?
People thought we were insane to be starting new when we had safe jobs, and although most thought it was a good idea, few thought it would work. Entrepreneurship was still new to the region a couple of years ago so there wasn’t a lot of support. We were lucky to find Astrolabs, the Google tech community and workspace, which cemented our relationship with others facing the same challenges. There are still not many FinTechs in the region, but it is useful having a close existence with the ones that are here.
What have been some of your most enjoyable, memorable moments so far in this journey?
The first remittances going through to our users friends and family was a special day – it takes you from being a good idea to a working product with tangible benefits to users.
We’ve won some notable awards including the Global Women in STEM Best Startup 2016, IBM’s Best Startup 2016 and Chivas The Venture for the Gulf 2016. It’s great to get recognition and support for financial inclusion.
NOW Money, where do you see it going over the next 12-24 months?
There are 4.5million people excluded from the financial system in the UAE, and a further 21 million across the Gulf, so our expansion plans Gulf expansion plans have already started. We also hope to offer NOW Money to other types of people struggling to access the financial system.
What things are you doing differently in the FinTech space - both in Dubai and from a global/regional perspective?
We’re a small, nimble team which means we can evolve very quickly compared with traditional financial players. The existing UAE players are starting to make moves into FinTech, but they can’t compete with the pace of startups. We may be few and far between, but we are fast!
FinTech is led from London in the UK. The sophistication of the tech there is awesome, but the whole population there has access to finance, so FinTechs have to market very aggressively to persuade customers to leave their relationship with a traditional bank. NOW Money focuses on people who don’t have access to the digital economy at all.
What are the biggest technology changes you have seen in last 5 years, and how do these changes impact or inspire your business?
Everyone is familiar with the shift to digital already, but the catalyst for this was the accessibility of smartphones. Even just 2-3 years ago, smartphones that could host apps effectively were still in the AED1800 mark. Now you can buy a smartphone from Carrefour for AED150. 98% of the low income market carry smartphones, which is critical to our business. Where previous mobile money entrants failed because the market was not yet ready, we believe the time is NOW (pun intended!)
What are the biggest challenges or hurdles you have faced in launching NOW Money in this region, and what are the biggest obstacles for 2017?
Regulation in the UAE can be challenging but is not impossible if you work with reputable, licensed institutions. As NOW Money uses a digital ledger to track all payments, there is a much greater level of audit that can be performed on transactions sent through our system versus the existing remittance options, which are almost exclusively cash based, anonymous and difficult to track. NOW Money offers the regulator a step change in the amount of data they can monitor.
Corporate partnerships can be slow to progress, as most are not set up to work with fast-paced FinTech partners. Saying that, there are a few corporates who have been forward thinking enough to put FinTech and innovation on their KPIs and they will benefit from the return of early successful FinTechs.
What are some of the biggest opportunities in the FinTech space at the moment, and what advice would you give to someone looking to get involved now?
There is still a nervousness around entering the FinTech market in this region, despite the Middle East's vast appetite for technology consumption. It has the highest smartphone penetration in the world and the highest internet penetration in the world. The adoption of technology is supported – the UAE government has the 2020 agenda to get everyone connected and included.
There are money management apps starting to enter the space, but it would be good to see more FinTech around financial products such as Shari'ah compliant mortgages and loans. There has been virtually no change to that industry since its inception, and with the transparency FinTech offers and Shari'ah demands, there is plenty of opportunity.