(MENAFN- Khaleej Times) Financial experts said it was high time the Mena region focused on FinTech companies.
The region can play a key role in the global FinTech ecosystem, said Abdulalmalik Alsheikh, a senior consultant at the Saudi Arabia Monetary Agency.
He said financial services are a great value addition for citizens. "Mena is a very active region and reshaping itself for the future. We have a young population and an agile government. The whole world is changing and disruption is happening in many industries. Now, it's time for the financial industry to be disrupted."
Wamda Capital executive chairman Fadi Ghandour said 85 per cent of all transactions still happen in cash in the Mena. "This is a cash-based region. There is massive amount of friction, delays and inefficiencies in a cash-based process. The environment is not moving fast enough to make changes happen."
Ghandour said there is great opportunity for banks to grow their business. He stressed the need to focus on digital solutions.
Meanwhile, Abu Dhabi Islamic Bank chief operating officer Sagheer Mufti said in the first quarter of the year, 70 per cent of its transactions were done online. About 90 per cent of payments by customers were done online.
Alsheikh said trust was a big factor when dealing in electronic transactions. "Trust plays a major role. There is a greater level of acceptance of electronic transactions in general. People are increasingly looking at it," he said.
The experts, however, acknowledged a huge gap in terms of bank account holders. According to a World Bank report on the Middle East, opportunities to expand financial inclusion are big, particularly among women and the poor.
The region increased account ownership to 14 per cent of adults, up from 11 per cent in 2011. Men are twice as likely to have an account as women, and seven per cent of adults in the poorest 40 per cent of households have an account compared to 19 per cent in the richest 60 per cent. Only 15 per cent of unbanked adults cite religion as a reason for not having an account.
More than 85 million adults in the Mena region remain unbanked, but digitising private sector wages could help cut that number by six million (or seven per cent), according to the report.
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Ashwani Kumar
MENAFN2310201700490000ID1095978417
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