Virtual reality takes off in the Gulf Cooperation Council countries


There is a thriving virtual reality industry in the Middle East, with the technology’s application expected to go far beyond gaming

The UAE is mirroring global trends by eagerly adopting virtual reality (VR) technology. At last year’s annual Dubai-based tech show, Gitex, a major focus was placed on VR products and how they can support the region’s rapidly expanding travel, hospitality and media sectors.

QFC ‘at the forefront’ of fintech discussions


The Qatar Financial Centre (QFC) Authority has hosted its first financial technology (fintech) event of 2017 in collaboration with the global strategy consultancy firm, Roland Berger.
The session, which was held at the QFC’s headquarters, attracted business and financial professionals from Qatar’s public and private sector. It aimed to identify and explain the key trends in the financial services sector and clarify how fintech is disrupting current practices and creating a completely digitalised method of banking and financing.
Kamal Naji, the QFC Authority’s chief strategy and business development officer, highlighted how fintech has transformed the financial services industry over the past few years.
He said: “Now more than ever before, the financial industry is relying on cutting-edge technology and technological innovation to provide its consumers with the highest levels of service.
“For so long, the financial industry refrained from resorting to technology as it continued using traditional methods to manage assets, provide commercial and retail loans, raise funding and transfer money. All of this is now changing across the globe.”
He added: “In the UK, reports show that the 11 leading start-ups in the robo-advice space currently manage over $15.7bn in client assets.”
During a presentation on the opportunities of digitisation and fintech for financial services companies, David Lecea, Roland Berger’s head of Banking Middle East, said: “We are now moving into a new era of fintech where collaboration of financial institutions and fintech startups will be the norm — it is exciting to see the QFC being at the forefront of such discussions.”
Peter Tavener, CFO and COO of Beehive, the GCC’s first peer-to-peer financing platform, said: “We found the event‎ very engaging and look forward to continuing the discussion of how Beehive can contribute to the nascent fintech ecosystem in Qatar. We would like to thank the QFC and Roland Berger for inviting us.”
The event concluded with a group discussion on the different methods and uses of bringing the power of fintech to bear in Qatar and how these methods would benefit and strengthen the local economy and provide additional support for SMEs. The event comes as part of the QFC’s continuous efforts to develop human capital as a driver for economic growth and prosperity in line with Qatar National Vision 2030.

Article published in Gulf Times on 7 February 2017.

Robo-advisors: wealth managers, get ready!


We are witnessing the rise of “robo-advisors”. More accurately, we should call them automated investment management solutions, since they are neither robots, nor do they provide comprehensive financial advice.

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Following the disruptive appearance of FinTech startups such as Wealthfront and Betterment in the US, some of the biggest players, e.g. Vanguard and Charles Schwab, launched their own automated investment solutions. The industry is forecast to reach more than two trillion dollars under management by 2020. Other parts of the world still lag behind, but are also expected to follow this trend.

Therefore, traditional wealth managers and financial planners must get ready for the new status quo. What should they do in response to the rise of robo-advisors?

  1. Accept the new reality
    Robo-advisors are receiving close scrutiny from regulators and customers, who still haven’t gone through a bear market with their money being managed by these new solutions. The automated investment model might be tweaked, regulated and transformed but it seems robo-advisors, and their low fees, are here to stay. If they haven’t developed their presence in a specific region yet, it is likely they will.
  2. Consider offering your own robo-advisor
    Given the success of this model, wealth managers would do well to consider entering this market, particularly if they want to serve the retail mass affluent segment that is ideally suited for this model. Some managers ask themselves if they should offer their own automated investment management services, and if so, how? Well, developing a proprietary solution, buying one off-the-shelf or partnering with another provider are all current models that have been successfully deployed.
  3. Focus on the things machines cannot do (yet)
    Not all customers’ needs can be met with an automated solution, at least not yet. If asset portfolio building and management can now be done more efficiently and less costly with an automated tool, wealth managers and financial planners will struggle to justify their fees unless they provide other services. The good news is that there are many aspects of financial planning that cannot be fully done by machines yet: budgeting, insurance, tax, trusts, succession planning and most importantly, behavioral coaching. Leaving the machines to do what they are best at, while focusing on the services humans do better sounds like the best combination to provide an excellent service.

Post originally published in Roland Berger’s blog on 7 December 2016.

Robots on The Rise. How AI Can Change the Financial World?


Why artificial intelligence (AI) might be a game changer for the financial industry.

According to Stephen Hawking, the creation of a true AI will be the most important event in human history. This process is increasingly noticeable within the technologies such as blockchain, biometrics, quantum and cloud computing, etc.Artificial intelligence (AI) is an important part of many popular technology industries – entertainment, automation, electronic gadgets and others. Recently, it has also started to increase its reach and importance in the wider banking industry and financial sectors.

Enterprises directly linked to the FX, binary options, fintech and cryptocurrencies need to confront with enlarged competition, tighter regulatory surroundings and customer requirements – solutions in the field of the artificial intelligence may become a valid response to the booming market.

Machines Better Than a Human

In recent times the saying that anything you can do, AI can do better is becoming increasingly popular. In the world of financial services it may take an entirely new meaning – though we often do not realize, AI is present all around us in many actions of daily life – natural language recognition, self-driven cars, chatbots, etc.

According to Pedro Domingos, the author of The Master Algorithm, “People worry that computers will get too smart and take over the world, but the real problem is that they’re too stupid and they’ve already taken over the world.”

Although this statement can be considered as slightly exaggerated, computers and artificial intelligence really have become and indispensable part of our lives. Still, how this may translate into the world of finance?

At what point can we trace the applications that make life easier for banks, brokerage houses, financial firms and their clients? Many examples can be specified, but let’s start from the customer support, transactions and helpdesks.

Automatic assistants like Siri or Cortana start to gain popularity not only in the daily tasks, but also in the world of finance and banking. Such products as Kasisto by SRI International, a virtual assistant in DBS digibank, secure transactions using voice recognition from Santander or Lubo prepared by RBS as retail banking helper.

All these examples and automated support systems can be directly transferred to the activities of online brokers specializing in derivatives.

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Financial Analysis, Security and Fraud Detection

Although above described solutions are impressive, they are currently quite common. So how the AI was implemented on the other fields? A great example would be a startup called Kensho – supported by Google Ventures – currently it is actively used by such banking sharks like Goldman Sachs or

JPMorgan. The tool for executing automated research and financial analysis provide immediate answers to questions expressed in natural language.

Transactions security and the service stability is another challenge faced by almost each brokerage. The response to cyber-attacks was presented by PatternEx – machine learning startup that developed a system to predict, identify and counteract 85% of the most popular attacks within the financial industry.

In the field of fraud detection, the case looks really similar. Feedzai machine learning services allows to monitor all customer’s authorization, clearing and settlement systems in order to detect any abnormal action.

Artificial intelligence undoubtedly affects the transformation of various industries – the financial world is no exception here. Institution which first begin to adapt to the changes will have a potential opportunity to take over the leading position in the coming years and decades. The race has already begun and will only increase its peace.

This article is an excerpt from the latest FM Intelligence Report.

UAE telco launches mobile wallet


Etisalat signs deal with technology company to offer its customers a mobile wallet service, as fintech expands in the Middle East

UAE telco Etisalat has launched a mobile wallet to enable its customers to make payments and money transfers on their smartphones.

The company is using a platform from Oberthur Technologies. As well as account management, the mobile wallet will provide automatic reports and notifications on transactions.

This is a sign of a trend in the Middle East similar to that seen in Europe, Asia and North America, with technology companies looking to take a slice of financial services business.

For example, mobile operator Telefonica’s German business division recently launched a mobile-based bank account, and O2 Banking is using technology from Fidor Bank as a rebranded white label service. Fidor bank, which launched in Germany in 2007, has an office in Dubai’s Silicon Oasis park.

But while these alternative financial platforms have become the norm in the world’s fintech hotspots, including parts of Asia and Europe, experts says this global trend has yet to infiltrate the Middle East.

The latest report from FinTech Week said less than 0.1% of fintech investment originates in the Middle East. “Consequently, the region’s banks and fintech startups are lagging behind their foreign counterparts in the development of new services and business models,” David Martinez de Lecea, a principal at Roland Berger, told Computer Weekly in June.

But the region is now seeing increased investment in financial services technology. Last week, Abu Dhabi Securities Exchange said it would provide access to documents on listed firms via mobile devices through a blockchain-based system, while Emirates NBD banking group announced a pilot for the use of blockchain for transactions between the UAE and India.

Article written by Karl Flinders and published in Computer Weekly on 25 October 2016.

Dubai the Center of the Middle East’s Fintech Industry


Dubai is looking to seize on the global Fintech revolution in a bid to compete with established centers like New York, London, and Singapore.
Fintech which involves using technology to provide financial services more efficiently – has grown rapidly in recent years. According to Boston Consulting Group, total funding reached $78.6 billion in 2015, up from $15.3 billion six years ago.
Both Dubai and Abu Dhabi have introduced new measures to regulate and encourage the growth the growth of Fintech startups in the region. David Martinez de Lecea, Fintech Consultant and Principal at Roland Berger says this a turning point:
“This year is interesting, 2016, it’s finally changing in terms of governments and financial institutions and most importantly, financial regulators… to allow these new businesses to foster.”
Almost 40% of the Middle East’s Fintech startups are from the U.A.E, according to MAGNiTT, a networking portal for the region’s startups, with the majority those in Dubai.
Governmental and financial institutions in the country are also looking to harness the power of Fintech companies. According to the BCG’s Fintech Database, although the North American firms accounted about 70% of absolute funding last year, Europe, the Middle East and Africa (EMEA) witnessed the most explosive growth in terms of the new funding.
Most of the biggest Fintech success stories from the MENA area have focussed on local problems. Omar Soudodi is the CEO of Dubai-based Payfort, which is a regional payment solutions firms:
“Fintech is already here today. Every market us unique. The Arab world has 80% unbanked population. You have over 5 million small and medium-sized enterprises that do not accept payment online and offline for that matter. So, people see it as a challenge. We see it as a huge opportunity.”
The Middle East’s Fintech industry and it’s potential growth was the focus points of last week’s Global Islamic Economy Summit, which took place in Dubai from 11-12th October.
Abdulla Al Awar, CEO of the Dubai Islamic Economy Development Center says that city’s support for the Fintech industry is a part of wider plan:
“The potential of Islamic economy is huge, and frankly, I think Dubai and the U.A.E. are well positioned to be at the center point. It is strategically located between economic hubs in the East and the West.”
The latest State of the Global Islamic Economy Report, produced by Thomson Reuters shows that U.A.E ranks second to Malaysia in terms of its Islamic Economy infrastructure. According to the study, the wider Islamic Economy was worth $1.9 trillion in 2015, with the Islamic Finance sector set to reach $3.5 trillion by 2021.
Article written by IndraStra Global and published in IndraStra on 19 October 2016.

Are FinTechs replacing banks?


Article written by AMEinfo Staff and published in AMEinfo on 13 October 2016.

Are FinTech firms going to replace banks in the near future? Had this been put to a banker even a few years ago, his response would have been: “How dare you ask such an insulting question?” But things have changed enormously in the past couple of years.

As Zubair Ahmed, senior vice-president, head of IT & Business Innovation at Emirates Islamic, says: “Fintechs have already done a major achievement by making bankers discuss them in this panel.” He was talking at a plenary session titled ‘The Tesla of finance is coming: are Islamic banks ready for the imminent FinTech disruption?’ at the Global Islamic Economy Forum being held in Dubai on Wednesday.

Other panellists also were certainly in agreement with Ahmed, but all of them rejected talk of an imminent disruption to traditional banking from the financial technology sector saying they are nothing more than overblown fears.

FinTechs have already made much progress and have started making money, and banks now recognise these new companies, which use technology to make financial services more efficient.

What’s next?

David Martinez de Lecea, specialist consultant, FinTech, at Roland Berger in the UAE, says collaborations are the way forward for FinTechs and banks.

Meanwhile, Ahmed says: “Increasingly, the relationship between banks and FinTech is being seen as a much more complementary and collaborative one than competitive.”

Abdul Haseeb Basit, CFO of the UK’s Innovate Finance, says banks have solutions for the major issues faced by Fintech firms, so a mutual partnership will benefit the latter the most.

“The challenge for start-ups is regulation. FinTech realises that regulation is where banks have an advantage, while they also have the ability to access a wide customer base. Banks already have that scale, so it makes sense for FinTechs to partner with them rather than market on their own.”

Abdulla Al Najran, deputy CEO, Boubyan Bank, Kuwait, is of the opinion that partnership is a two-way street. “Banks must work with FinTechs as they have ideas that the older generation will not come up with,” he says.

“Non-traditional customers are choosing to go with Shariah-compliant products and Islamic banks because of the transparency and, now, the technology. Technology and FinTech can help Islamic banks broaden their customer base,” he adds.