22 February 2017
Fintech has the potential to alter financial services in the GCC by 2020. Presently, the fintech revolution is still dwelling in its nascent stage in the GCC because of the lack of consumer confidence, issues of scale, and regulatory compliance, said Xpress Money COO, Sudhesh Giriyan.
The fintech evolution in the GCC is being driven by two factors; first, larger conventional institutions are creating digital channels to safeguard against potential disruption. Second, nimble startups are helping deliver online and mobile services for remittances, insurance, investment advisory and online trading.
However, fintech has challenges to overcome. Larger institutions sometimes struggle with a rapid-response, digital-first culture that is required for fintech innovation. Smaller players, on the other hand, struggle with the resources, size and scale required to compete meaningfully. Startups also lack the networks and regulatory relationships to gain the necessary permissions.
Customer confidence is a key issue for fintech startups. “On the consumer front, while early adopters might take to new apps and ideas, we’ve found that customers really value trust and reliability when it comes to financial transactions. They patronise large brands with a physical presence where they can see the outlets and transact with actual people. We find that consumers develop loyalty to brands they’ve had good experiences with, and don’t want to take chances with their money by trying something new,” Giriyan explains.
Giriyan believes that these challenges will see a spate of collaborations between fintech startups and conventional money transfer houses and banks in the short to medium term.
© The Peninsula 2017