FinTech CEO Committee
Meeting Notes
Thursday, June 10, 2021


Opening:

The third meeting of the FinTech CEO Committee was called to order at 3:00 PM Istanbul Time on June 10, 2021 on Zoom.

Present:

Dr. Fatin Al Zadjali, Acting Assistant Dean for Academic Support and Student Affairs and Head of Islamic Finance, College of Banking and Financial Studies

Mr. Carlo Giugovaz, Italy & Switzerland Country Manager, EFMA

Mr. Mohammad Ridzuan Abdul Aziz, Advisory Board Member, FinTech Association of Malaysia

Mr. Mustafa Kuğu, Founder, FASTER Community


Agenda:
Islamic Neobanks: Where are there? What are their advantages?

Meeting Highlights:

In today’s connected world of business, Islamic finance, despite its label, is not limited to Muslim countries. It has lately shown growth globally, including in Europe.

Europe is increasingly showing interest in Islamic finance where many ethical investors are looking to do business with Sharia-compliant corporations. And because of rules, standards and regulations, it is considered a good destination for Islamic Neobanks described as focused banks to establish and flourish there.

Currently, there is no tough competition, since the market is mainly served by local banks.

Germany is a top destination for it has the largest Muslim population in Europe followed by the UK, France, Italy and Spain.

Efma, which is a global non-profit organization, established in 1971 by banks and insurance companies, facilitates networking between decision-makers, and provides quality insights to help banks and insurance companies make the right decisions to foster innovation and drive their transformation. The company helps banks and insurance companies select the right FinTech products and technologies, and helps FinTech companies be competitive and mature firms.

Mr. Carlo Giugovaz as CEO of Supernovae Labs and Country Manager of Efma is ready to partner with Islamic Neobanks that have plans to enter Europe, by offering them advisory, consultancy, and implementation services.

Supernovae Labs, Italy’s leading accelerator for FinTech startups dedicated to financial institutions, is pioneering new collaborations between Finance and FinTechs.

Founded by Mr. Giugovaz, Supernovae Labs is a team of professionals that bring the experience, missing competencies and skills to FinTechs, banks and venture capitalists to succeed in their respective business and to innovate, using a ‘Business Angel’ approach to guarantee a complete alignment of interests between all stakeholders.

There has been a surge of activity in the digital banking and FinTech across Europe, with new Neobanks and Challenger banks emerging, existing ones expanding, and customers flocking to their doors. 

Mr. Giugovaz classified these digital-only banks into three major categories: Foreign Neobanks, traditional online banks, and pure online banks.

When it comes to the Middle East region, there is a slow rise of neobanking in this region. Only Bahrain, Israel, Saudi Arabia, and the UAE have witnessed the launch of new digital-only banks during the last three years. As to the FinTech sector in the Sultanate of Oman, it is in a continuing development at a steady rhythm. Lately, MoneyGram has announced an agreement to join Pay+ mobile wallet to expand its digital presence in the Middle East. Through this partnership with Ooredoo Oman, a telecommunication company and the National Bank of Oman, Pay+ mobile wallet users will be able to send money next month in near real-time across the MoneyGram global network of over 200 countries and territories.

Likewise, Path Solutions and IFAAS have jointly launched IFIN, the first of its kind, real economy, automated Islamic financing platform in Oman. This secure technology enables to connect retailers and Islamic finance providers, permitting them to offer consumers instant access to Islamic financing for purchases, at the point of sale.

Alizz Islamic Bank is the first Islamic window in Oman to partner with IFIN to launch the first instant ‘Goods Financing’ product. This launch comes with the backdrop of Alizz Islamic Bank’s constant pursuit to provide its customers with innovative financial solutions. Customers go through an online impression for validation, and this is only possible because of Oman Credit and Financial Information Centre (Mala’a), the country’s national databank.

Another development is the partnership between Thawani Technologies, a digital payments platform and BankDhofar to provide to its customers digital transformation and trending remote payments.

It is worth mentioning here that Oman is the first country in the GCC to do Real Time Gross Settlement (RTGS) system linked to mobiles, with an increase of mobile payment systems integration in the market soon. This increase is driven by a large number of youth population who heavily rely on mobiles.

The Sultanate’s payment system architecture — billed as the digital backbone of the country’s financial system — is being progressively upgraded to position it among the most modern in the Arabian Gulf.

Concerning Asia Pacific, particularly Philippines, Malaysia, Indonesia and Vietnam, they have a huge potential for Neobank growth right after Australia. Malaysia is preparing the issuance of the country’s first five digital banking licences to qualified applicants, both conventional and Islamic banks and both local and foreign financial institutions. And its first Islamic Neobank will see the light soon.

The philosophy behind the establishment of Islamic Neobanks and Challenger banks is to build a technology solution and not a bank, through building supporting infrastructures, and own networks for the entire ecosystem, independent from the existing systems. As a significant step towards achieving responsible innovation to improve social conditions, and address the difficulties experienced by the unserved/underserved populations, this concept will increase profitability and trustworthiness, influence regulators, and expand values to all stakeholders.

And in order to balance digital revolution with digital responsibility, it is critical to establish a value-based digital economy (VBDE), to elevate livelihood of the unserved/underserved for individuals and Micro Small Medium Enterprises (MSME), because they are the nucleus for growth, and elevating them means other stakeholders would also be elevated.

How does that work? When the weak link is empowered, the other parts of the VBDE will be expanded because (a) the knowledge and income gaps will be closing, (b) the path to better livelihood is clearer, (c) willingness to collaborate will be enhanced because societal well-being is constantly improving.


Closing Remarks:

Cybersecurity is no longer just about firewalls and off-the-shelf anti-virus software. With data collection and sharing capabilities that come with internet technology, the breadth and depth of cybersecurity has evolved significantly. Digital interactions between businesses and consumers often involve the sharing of sensitive information by the latter, and there is a genuine risk of data falling into the wrong hands. Thus, data governance is a vital component of organizations to turn their data into a competitive advantage, and boost their business value.

Also, as technology is rapidly evolving; Redefining understanding and building new knowledge is essential to introduce and bring new technologies to the different stakeholders.


Written by:

Mrs. Danielle Karam
Manager - Corporate Communications
Global Corporate Communications & Marketing Department
Path Solutions