This website has spoken about some of the best digital banks around the world.
This has included my review of the best digital banks in the UK. How about in the UAE? That will the topic of this article.
Which neobanks, and non-traditional banks more generally, offer the most to customers living in Dubai, Abu Dhabi and the UAE more generally?
If you want me to answer any questions on Quora or YouTube, or you are looking to invest, don’t hesitate to contact me or use the WhatsApp function below.
Introduction
Banking system has changed significantly in recent years. The widespread availability of broadband since the early 2000s has made online banking a viable option for many more people. This made it easier to pay bills or check balances without having to visit a bank branch or ATM.
The last two to three years have then seen a global trend in banks and financial institutions adopting new technology, digitalisation and innovation in its banking solutions.
So what is digital banking? What makes a bank digital and what benefits does it bring to you as a consumer or business?
Digital banking, sometimes referred to as e-banking, has gradually emerged in the past few decades. It is important to note that digital banking portals allow banks to provide customers with access to traditional banking services through their PCs or smart devices. These services save time and money for clients and the bank. Hence, they are more popular than ever.
Benefits of digital banking
Banks have been using digital client interfaces for a very long time, providing access to services such as viewing business current accounts on the Internet, via websites or smartphones.
Digital banking is much more than that. It includes the automation of back office processes and their seamless connection to the client side to automate every step of the process.
This transformation is based on technology, including big data, digital transformation and artificial intelligence. All of this can be used to improve the quality of customer service.
A bank will not be truly digital if it has not applied these technologies to all of its functions. So from a bank’s point of view, what are the benefits of this?
- Lower Costs – Reducing reliance on legacy systems can reduce costs and increase competitiveness
- Higher income – more efficient systems can lead to gaining and retaining more market share
- Customer Experience Improvement – Newbies are shaking up the banking landscape by offering systems that simplify everything from payment planning to checking your balance
- Enhanced Compliance – The financial sector is subject to strict laws and regulations, but they also open up opportunities that make it easier to use digital banking.
- Better technologies – Better analytics, blockchain and cognitive systems promise big benefits, but digitalization is required to use them
While digital banking has many real and potential benefits, it also poses significant challenges. For seasoned players, the biggest problem is outdated infrastructure.
A lot of money and experience have been invested in the systems of large banks, and they, for obvious reasons, do not want to give up on them. But these systems also lead to fragmented information and difficult access to it.
Digital banking requires agile, flexible processes that can deliver information quickly. An added benefit of this is that they are easier to maintain over the long term.
Of course, digital transformation requires the right people, and finding them can be a challenge too. Banks need specialized knowledge to achieve their digital goals.
A successful digital banking implementation is only possible if you bring consumers with you. One of the challenges for applicant banks is to gain trust.
Customers will only consider switching if they are confident that their details and identity will be kept confidential, that their payments are secure, and that paperless contracts are as secure and valid as printed ones.
Of course, there is a compromise here. The digital bank needs customer data to improve its service, but people will only be willing to provide access to that data if they trust the bank.
Finally, digital banks must follow the same rules as more traditional ones. In addition, they must ensure that their systems are secure and adequately protected against cyberattack and fraud threats.
What makes digital banks effective?
To be effective, a digital bank must operate in three areas. First, it must be based on a technology platform that can provide the following:
- Presentation level for customers and employees using the system
- The orchestration layer that handles client processes and interactions between the client and the server
- A product processing level that should not contain customer data
- An interface layer that uses APIs and other technologies to extend access to services
The second thing digital banks need to do is accept and act in a way that recognizes that they do not exist in isolation. They need to establish relationships with other financial technology providers, such as insurers and stock brokers, in order to create a holistic financial ecosystem and be able to quickly respond to changing market needs.
Finally, digital banks, like more traditional banks, need trust. Customers – whether personal or business – will only use data from financial institutions they trust, and this data is the key to digital success.
Digital banks will increasingly rely on their customers and the database they have learned about them, rather than their own products. Without trust in the brand, this will not happen.
Digital banking landscape in the UAE
The UAE banking sector is rapidly taking the lead for digital banking solutions. In fact, 90% of people in the UAE use digital banking channels. And up to 100% of them use ATMs for their banking operations. In addition, high percentages also use mobile banking services.
According to numerous studies conducted by official bodies such as the Federal Office of Competition and Statistics, the percentage of digital banking users in the UAE has grown to 90 percent and the percentage of ATM users has reached 100 percent, reflecting the growing automation of the country’s banking sector. The same studies also show that many UAE residents use mobile banking, including those who use online banking services.
This development is supported by the desire of banks operating in the UAE to invest in the latest technologies to provide services to customers, including mobile banking services. Research shows that downloads and installations of banking apps range from 90,000 to 5.4 million, highlighting the demand from bank account holders for digital banking solutions.
If you still read this article, you are probably interested in the best digital banking available in UAE. Later in this article we will show you the results of our researches during which we found some of the best and popular digital banks that UAE residents use.
Digital-only banking platforms
With fully digital banks or neobanks, including global banks such as Revolut or N26, expect to reach 35 million customers worldwide next year, it should come as no surprise that the UAE is also at the forefront of this transformation.
They are aimed at advanced Gen Y mobile users and Gen Z customers who prefer a branchless digital banking platform and paperless solutions. There are several large banks in UAE that have developed sub-brands completely independent of their main banking business. They are completely personalized and intuitive to suit the needs and lifestyle of the user, as we see here:
- Liv by Emirates NBD
- E20
- Mashreq Neo
- MoneySmart
- OG Bank and OG Pay
- Xpence
These are actually some of the best and very popular banks that offer their customers digital banking, and in this article we will try to present all the information and details about these banks and their system.
Liv by Emirates NBD
In 2017, the bank launched Liv, a digital lifestyle banking app for millennials, to save more and better manage their finances. With an attractive 2% return on account balances, clients also get personal information about where and how often they spend, which helps them better manage their finances.
They also offer promotions based on the customer’s purchase history with discounts on restaurants, travel, and events to suit their lifestyle. Liv already has over 300,000 clients.
The idea is that the Liv app brings together the lifestyle needs of users “in line” with their budgets. Liv was designed by Emirates NBD to catch the attention of Millennials and Gen Z in the Middle East.
Banking features
Liv has already offered a range of financial services to users. Balances over AED 5,000 (USD 1,361) generate 2% per annum.
Users can receive discounts of up to 50% from selected grocery and retail partners. They can be viewed using a carousel in the new app design.
The Challenger also gives users access to an automatic expense counter, automatic save based on personal goals, and account sharing via social media.
At the same time, users can collect “Libya”. They can accumulate them through day-to-day cash activities such as paying bills, buying cards, sending referrals to partners, and maintaining a deposit of over AED 1,000.
Liv was originally developed as a digital banking app for millennials in 2017. In February, the bidder claimed to have acquired over 300,000 users. The digital banking service has also helped increase Emirates NBD’s profits.
In 2019, the bank’s net income rose 44% to AED 14.5 billion. In September 2019, the bank also launched E20, its competitive service for small and medium-sized enterprises (SMEs).
E20 by Emirates NBD
As noted above, Emirates NBD launched its E20 digital business bank in September 2019.
After 18 months of development, the E20 was introduced by founder Evans Munyuki, who is also the Chief Digital Officer (CDO) at Emirates NBD.
The E20 will enable startups, sole proprietors, freelancers, giants, fintechs, insurance companies and small and medium-sized enterprises to open a bank account and carry out their day-to-day banking tasks through a mobile app, as well as access various services to provide assistance they run their business.
The new digital business bank will allow startups, sole proprietors, freelancers, gig economy specialists, fintechs, insurers and small and medium-sized companies to open a bank account and easily carry out their daily banking tasks through a mobile application, as well as access to various services that help them manage their business.
E20 allows business customers to quickly open a bank account, make local and international transfers, and pay bills – all on their smartphones. Customers will also be able to obtain a checkbook and debit card, as well as access to Emirates NBD’s extensive ATM and CDM network (ATMs for Cash and Check) to help them manage their day-to-day banking needs.
In addition to providing banking services, E20 provides business owners with digital tools to easily create invoices, track accounts receivable, view profit and loss statements, and make and reconcile payments to suppliers and suppliers.
E20 also provides information on VAT returns and provide insight into expenses and cash flows to help customers run their business more efficiently, as well as features to help them get paid faster. In addition, customers will have 24/7 access to an Account Manager via in-app chat to help them with any queries they may have.
E20 is Emirates NBD’s second digital bank following the success of Liv., the UAE’s first lifestyle-focused digital bank for millennials and Gen Z, launched in 2017.
Mashreq Neo
This online bank was created and launched in 2017 by Dubai-based Mashreq Bank. This bank may offer different types of bank accounts and in-app services such as checking accounts, savings / investment accounts, stock trading on the go, credit / debit card payments using a smartphone, and mobile to mobile. Money transfers.
Most of the services are aimed at advanced consumers who know a lot about the world of digital money and communications and are used to working a lot with smartphones.
These consumers are usually social media users and make purchase decisions based on recommendations. Thus, bank representatives believe that today’s users choose flexibility and convenience as the main reasons for choosing a bank.
This neobank offers a variety of options when it comes to the registration process, such as optical character recognition (OCR) technology, ID scanning, and data auto-complete. In this case, a password is generated, which is then sent to the mobile device to confirm the input.
Activity Wall is another interesting feature of the app. Basically, it shows users their recent activity on a timeline. Mashreq Neo has a decent customer support system, so the customer can reach them through the call center and using Neo Chatbot (it is integrated with FB Messenger).
This new digital bank offers a powerful suite, including credit cards, debit cards, checking accounts, personal loans, money transfers, foreign exchange, global stock trading, gold trading, and foreign exchange investing opportunities. In addition, they will receive competitive rates on deposits and money transfers, free ATM withdrawals and additional benefits.
Customers will be able to open an account with Mashreq Neo in less than 5 minutes by downloading the app (from the Apple App Store and Google Play Store) and scanning their Emirates ID.
Mashreq Neo will offer the most comprehensive suite of payment options such as Samsung Pay wallet, Mashreq Pay wallet, international bill payment in over 100 countries, cardless ATM cash, mobile-to-mobile transfers, and local and global money transfers.
The new digital bank will use big data analytics to offer its clients unique financial management insights. In addition, it also offers customers access to a global trade portal where they will have access to a wide range of sellers from different countries.
MoneySmart
MoneySmart is the brainchild of the Abu Dhabi Islamic Bank (ADIB) and European Fidor Bank. It was launched in early 2018 and is described as “the Middle East’s first digital community for personal finance where people can share information and advice with peers and experts.”
The concept, developed by ADIB, has been adapted to interact with millennials through the media they use most: mobile, web and social media. It aims to be interactive and reward users with redeemable bonus points for their contributions.
Fidor provided FidorOS, its digital engagement platform, as well as its expertise in managing and developing the digital community.
It also offers a digital bank account – a smart account – that comes with an app and a free debit card, and offers bonuses for participating in the MoneySmart community (active participation, referring a friend, etc.)
OG Bank and OG Pay
The Dubai-based claimant bank will launch in Germany and the UK in 2020 and has already selected its main banking provider, Bankable.
Neobank will focus on mobile digital banking and payments through its live chat wallet. The bank says the “closed environment” of its offering – a bank, a mobile wallet and a digital point of sale (POS) rolled into one – “will cause serious disruption” in Europe, where, it says, the introduction of payment wallets “has been slow.”
OG Bank’s goal is clear: “to turn a mobile device into a terminal for receiving and processing payments.”
Along with the UK and Germany, OG Bank and OG Pay will also launch in Pakistan, Egypt, Malaysia and Indonesia.
Xpence
Founded in 2017 by Saad Ansari (CEO) and Konstantin Danilkov (CTO) in 2017, Xpence calls itself “the first neobank in the Gulf region created by entrepreneurs for entrepreneurs.” The founders say the bank was born out of frustration – they couldn’t open a bank account for their own startup.
Xpence is aimed at freelancers, sole proprietors and startups, and combines accounting and banking in an app. It provides automatic tags and categorizes all income and expenses in real time.
Users can click and add a receipt image every time they use their card. Notes and files can be added to transactions, and users can create their own tags. A Visa card is attached to the invoice.
Xpence uses a variety of technologies including Microsoft and open source technologies such as Apache. The backend was built using micro service architecture. In addition to developing its own internal functionality, it also integrates with various third party technical partners to provide services to users, such as Paymentology from the UK.
Xpence raised $ 1.1 million in a preliminary round from investors in the UK, including UFP Fintech (one of Revolut’s early investors), as well as from UHNW’s family offices in Saudi Arabia. Its roadmap includes expansion to Bahrain and Saudi Arabia.
To conclude
Digital banking is largely created by IT experts, not financial experts. Therefore, the entire interface is designed specifically for the convenience and flexibility of the user.
The customer stays in sight, so digital banking is rapidly evolving to meet their needs as they arise. The bank does not have to be purely digital, it can also have a physical branch, but its services can be completely managed online.
The application is easy to use, contains all the information a customer might need, and changes according to needs.
Digital banking saw a gap in the market and quickly began to fill it. The traditional boring image of the bank no longer satisfies the needs of the people. This is what online banking aims to achieve.
Where will this lead us in the future? Many digital banks are now trying to implement simpler payment systems. You can also chat with the assistant in real time. This is what online banking tried to implement, but many queries require a trip to the branch to answer.
Digital banking hopes to eliminate this. In the future, digital banks may team up with social media and instant messaging services to send money quickly. This will benefit from the fast-paced world of instant communication that we currently live in.
While many older users may still choose to talk to someone of flesh and blood, digital banks are cashing in on younger users. The world lives through the mobile phone screen, so why not do your banking?
Further Reading
I often post on Quora and respond to readers questions on there and on adamfayed.com.
In the answer below I focused on:
- What kinds of people become rich or wealthy?
- Is it a good idea for a start up company to copy the ideas of other, often more established, firms?
- Should people invest in AirBnb at all or wait a few weeks?
Click the article below to read more
