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Sandwiched between mega global banks and regional banking institutions, which enjoy strong local networks and footprints, digital banks face unique challenges of scale and differentiation.
However, for Olivier Crespin, co-founder and CEO of Zand, the first fully digital bank in the region combining both retail and corporate banking, such an environment presents a real opportunity for digital banks like his.
“This is a real opportunity for us as we can focus on real value-added products and services for customers. As a matter of fact, we’re starting with cards, current accounts, remittances, portfolio finance management and lending for retail clients and supply chain finance and bilateral loans for corporates,” he told Zawya, adding that Zand will keep adding products as and when they can be fully digitalised.
“We’re also partnering with fintechs for most of our offerings; hence time-to-market can be fast. So, scalability, time-to-market and product differentiation allow us to distinguish ourselves.”
In July this year, Zand announced that it had been granted a banking licence from the Central Bank of the UAE to become Zand Bank PJSC, a fully licenced bank.
Its shareholders include distinguished names such as the Aditya Birla Group (Solfrid Investments Pte. Ltd), Al Hail Holding LLC, Al Sayyah and Sons Investments LLC, Franklin Templeton, Global Development Group, Mohamed Alabbar, Lulu Group chairman and managing director, Yusuff Ali M. A., and Olivier Crespin himself.
Disrupting the Industry
Speaking of the unique advantages digital-only banks such as Zand have over the traditional bank that has omnichannel presence, Olivier said, “Our first advantage is that we are building a brand-new bank with a clean slate, so we are unencumbered by any legacy, whether in technology, mindset, process, or policy.”
“We also have the advantage of having the culture, technology architecture, tools, team, mindset, and process to build a strong data infrastructure needed for successful AI-enabled personalisation. That’s one of the challenges existing banks are facing as they partially migrate to the cloud or develop strategies for a multi-cloud data infrastructure environment,” he added.
He also said the lack of a physical infrastructure reduces the bank’s cost compared to its competitors, allowing Zand to give its clients better rates on deposits.
“We are in a position to disrupt the banking industry as our platform allows us to save time and address our customers’ need to be recognised, get access to the best products and have peace of mind,” Olivier added.
Banking in a Box
Olivier said he and his team had designed Zand to be a reusable platform to “lift and drop” into new markets at pace. “With an end-to-end digital solution with lower operating costs and non-linear scalability, Zand has been architected to integrate into broader ecosystems and provide a value multiplier each time.”
“In addition, our 360-degree platform enables data-driven ecosystem integration. In the commercial space, this provides even greater opportunities through trade ecosystems. From inception to design and development, we have built Zand as a bank in a box,” he added.
Path to Profitability
Olivier believes the platform has set a clear path to monetisation as the bank’s business model has created different revenue streams.
The first stream, he says, is retail, where “our path to profitability might take longer as the first years are dedicated to attracting clients and ensuring customer satisfaction”.
The second is commercial banking, where profitability can usually be achieved faster due to the nature of the business and transaction size.
“Having a full banking licence allows us to provide corporate banking services where the ticket size of transactions is marginally larger, and we can reach profitability faster. In addition, we can also monetise the platform itself, which can be replicated in other markets at pace,” Olivier added.
He said the pandemic had demonstrated that most people are now demanding innovative banking products. “They want a simple, intuitive, and transparent digital banking experience to simplify their lives and businesses, [but] with the peace of mind that a bank regulated by the Central Bank of UAE can provide. That’s what we designed Zand to provide.”
He said Gen Z and millennials naturally count among the bank’s target customers, but Zand is for anyone seeking simple, easy, reliable, and modern banking services.
“We have not built the bank with a particular age category in mind,” he said. “Digital is about the mindset. As a result of the pandemic, digital acceleration is accelerating, and most people in the UAE are now more familiar with and open to digital offerings. That’s why we believe the time for digital banking is now.”
(Writing by Sunil S; editing by Seban Scaria)
