FinTech CEO Committee
Executive Brief
Thursday, November 4, 2021


Opening:
The sixth meeting of the FinTech CEO Committee was called to order at 4:00 PM Istanbul Time on November 4, 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. Ahmed Oluwashola Odufuwa, Africa Fintech Foundry (Access Bank Innovation & Startups Acceleration Hub)

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

Mr. Mohammed Kateeb, Group Chairman & CEO, Path Solutions

Mr. Mustafa Kuğu, Founder, FASTER Community


Agenda:
Recent developments in the FinTech industry
Length of the Meeting:  1 hour

Meeting Highlights:

A new Juniper Research study has revealed that the value of global payment transactions facilitated by open banking will exceed USD 116 billion in 2026, from just under USD 4 billion in 2021. 

Rising popularity for digital payments, increased investments in technology-based solutions, supportive government regulations, and increased adoption of IOT devices are expected to positively influence the Global FinTech Market in the coming years.

Banking in Nigeria remains an attractive sector, with over USD 9 billion in value pools, but despite high levels of competition, the vast majority of consumers are underserved. Lack of access to services, especially in rural areas, affordability issues, and poor user experience all contribute to the frustration consumers experience right across the customer spectrum.

This has created an opening that FinTechs have been quick to take advantage of, with many stepping up to develop enhanced propositions across the value chain to address pain points in affordable payments, quick loans, and flexible savings and investments, among others.

FinTech payment companies have changed the payments industry, and the way we pay in the digital world, in a significant move to shift toward decentralized finance. Payments are now called dominant driver for FinTech investment.

For instance, Flutterwave, the dominant FinTech payment in Nigeria, continues to expand aggressively in the African continent, cementing its place as Africa’s leading payments. While, Paystack has become the first payment gateway in Africa's largest economy to become an Apple Pay partner.

Furthermore, ethical banking is on the rise in the country with the newly-launched Lotus Bank and the established Jaiz Bank and Sterling Alternative Finance. Millennials are paying more attention to Corporate Social Responsibility in comparison to previous generations.

The Sultanate of Oman has launched the National Programme for Digital Economy, through which the Sultanate seeks to achieve several goals that contribute to building and developing a prosperous digital economy that responds to the requirements of the future.

Key priorities of this programme include government digital transformation; e-commerce; development of technical infrastructure; digital industry and cybersecurity. This initiative will also focus on a range of opportunities available in the digital economy in the Sultanate revolving around data centre services, cloud services, and cybersecurity services.

On a different note, the Central Bank of Oman is drafting the so-called Open Banking API Strategy as part of a broader push to stimulate innovation in the finance sector. This strategy is part of the Fintech Framework and Roadmap, which comprises several initiatives aimed at establishing and nurturing a comprehensive FinTech ecosystem in Oman.

Also, new rules for crowdfunding platforms have been launched by the Capital Market Authority, allowing Waqf Foundation to take advantage of these platforms.

Bank Muscat, one of the biggest financial institutions in the country, has launched an AI-powered fraud detection system enabling to detect fraudulent activities much faster and with more accuracy than traditional rules-based systems.

According to a study in 2020, Islam has 1.9 billion adherents, making up about 24.7% of the world population. 15% of the unbanked population in the world are Muslims, and over 2 hundred millions SMEs do not have bank accounts to do business.

Most people who are unbanked are unbanked because they have no income in the first place, are living in rural areas, and are not able to submit the necessary documentation to open bank accounts. FinTech remains the best bet at reaching the unbanked, and achieving responsible financial inclusion. While most FinTechs are regulated by central banks, and are applying the same risk management profiles that banks adopt, financial inclusion won’t be achieved unless central banks relax regulations for FinTechs.

FinTech lies at the heart of the ethical banking revolution. Banks and FinTechs must collaborate to do the right thing to serve their customers ethically, appropriately and in the interests of all stakeholders.

Following the instructions of banks in Malaysia that have forced foreigners to close their bank accounts resulting from their updated risk assessments, the payments industry is enabled to respond to the effect of this decision by empowering people to have full control of their financial transactions.

Islamic banks in OIC countries are unable to achieve financial inclusion because of infrastructure dependency. Here comes the importance of decentralized finance that do not rely on centralized intermediaries such as banks to conduct cross border transactions, and the role of of interoperability in the mass adoption of decentralized finance.

Greater financial inclusion requires central banks to work on promoting sound and efficient payment systems and mechanisms, improving the functioning of the financial system, and encouraging technological innovation-finance integration for better financial services.

Written by:


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