MANAMA: The two billion people around the world with no bank accounts are a huge opportunity for Fintech firms, a leading expert has said.
Innovest Advisory founder and chief executive Justin Sykes told participants during the second Middle East and Africa Fintech Forum at the Four Seasons Hotel Bahrain Bay that Fintech can increase accessibility and affordability of financial services, and mobile money holds significant promise, particularly in developing economies.
Globally only two per cent of adults have a mobile money account, and more than 7.1bn mobile connections exist globally, with 80 per cent in the developing world, he said.
More than 400 delegates attended the forum – the largest in the Middle East and Africa – gathering the world’s top Fintech and artificial intelligence experts.
Discussion through the day saw experts urging banks to prepare for rapidly changing technology, financial services and customer behaviours.
The forum was held under the theme Beyond Disruption under the patronage of the Central Bank of Bahrain (CBB) and hosted by Bank ABC and Arab Financial Services (AFS).
Inaugurating the conference discussions, CBB Governor Rasheed Al Maraj provided his own perspectives on Fintech-related issues and the impact of the new financial technology on banking and finance, referring to Bahrain’s proactive role in supporting Fintech initiatives.
The opening address was delivered by AFS chairman and Bank ABC deputy group chief executive Sael Al Waary.
In his opening speech, Mr Al Waary illustrated the elemental shift in the way financial services industry is now responding towards Fintech.
“Banks have shifted their mindset and are viewing Fintech as an opportunity rather than a threat. More and more banks are embracing Fintech and are catching up very quickly,” he commented.
Mr Al Waary also explained how traditional or legacy banks are responding with a defensive strategy by creating mobile only banks or app only banks, leveraging their existing infrastructure and regulatory status to enhance the customer experience and attracting new customer segment.
He concluded by emphasising on the need for collaboration between banks and Fintech start-ups, which would combine capital and innovation, economies of scale and agility, customer data and customer experience, regulatory and technical know-how.
“I have always believed that disruption is a catalyst of change and opportunity... at AFS we are optimistic about what lies ahead,” he said.
Anthony Thomson, founder and former chairman of Atom Bank and Metro Bank, summarised the opportunities and challenges facing challenger banks.
Opportunities include customer dissatisfaction with traditional banks, changing customer behaviours and ability to utilise lower costs of technology and data storage.
Challenges are summarised in the ability to gain trust, innovate and securing capital.
Michael Jordaan, co-founder of Bank Zero and former CEO of First National Bank, said the disruption in the financial industry has already happened and that only the innovative will survive. He said the new financial technology can provide solutions to issues related to customer fees, remittances, paperwork, microcredit, online payments and fraud.
Greg Cross, chief business officer of Soul Machines, talked about how artificial intelligence is evolving to emotional intelligence.
He illustrated how machines today are being made more human with a virtual nervous system.
Digital DNA will create a population of millions of digital humans.
Alastair Lukies, founding partner Motive, pointed out that only 15 years ago, the world’s largest companies by market capitalisation were industrial, financial, retailer and oil companies.
Today the top companies are mobile and high-tech companies.
Alex Tapscott, co-founder of the Blockchain Research Institute, outlined the key prospects of blockchain technology, including protecting rights through immutable records, ending the remittance fees, protecting privacy, and ensuring compensation for the creators of value.
Jim Mauris, founder and publisher of the Digital Banking report, said the fast changes in the financial industry, fuelled by the power of big data and cognitive learning, requires banks to take specific actions to survive.
These actions include focusing on the customer, becoming data driven, using design engineering, building digital first, partnering with leaders, and being agile and flexible.
Eileen Burbidge, co-founder Passion Capital and UK Treasury special envoy for Fintech, provided a perspective on the initiatives needed to enable innovation.
These included fostering a culture of collaboration, encouraging customer centric services, making the economic case for increased financial inclusion and forcing diversity of thought and experiences to create best products and services.
At the end of the conference, Mr Al Waary and AFS chief executive B Chandrasekhar provided their views on how Arab Financial Services can play a greater role in the future as a Fintech enabler.