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MENA and Open Banking: A Conversation with Mohammed Aziz of Dapi

By David Penn Posted on August 7, 2020
Categories: Feedzai, Finastra, Finovate Global, Fiserv, Onfido, Salt Edge, Tinkoff Bank

This week for Finovate Global, we caught up with Mohammed Aziz, co-founder and CEO of Dapi, a fintech startup that offers a suite of open banking APIs to help connect customer bank accounts, initiate payments, and access data in real-time. Founded in 2019, the company currently operate in six countries in the Middle East and Africa, and is headquartered in both San Francisco, California, and the UAE.

We talked about the opportunity for open banking to fuel innovation in financial services in emerging economies, as well as the overall environment for fintech innovation in the MENA region. We also discussed the impact of the COVID-19 crisis on pre-existing trends such as digitization.

Finovate: Dapi is the third company you’ve founded, but your first fintech. What made you want to focus on the opportunities in this industry? What do you bring to fintech from your experience in other areas?

Mohammed Aziz: Dapi was the result of a problem that I personally faced when trying to build “Spendy” a hybrid between a peer to peer payment application and a personal financial management app. We were unable to build out Spendy for most emerging markets due to the lack of bank connectivity which got us super keen to build out the underlying infrastructure that would power the future of fintech in these markets.

Finovate: Tell us about Dapi. What problem does your company solve and who are your primary customers?

Aziz: Dapi’s mission is to provide the building blocks for a thriving fintech ecosystem in emerging markets around the world. Our API serves as the bridge between financial applications and banks, empowering developers to create digital wallets, budget trackers, investment applications and more. Our clients are developers working on fintech applications, businesses hoping to include financial services in their mobile and web offerings, and anyone that wants to include bank functionality within their digital offerings.

Finovate: Your business strategy relies on an embrace of open banking in the MENA region. How strong is the movement toward open banking there?

Aziz: The MENA region is a very exciting space to be operating in right now. Fintech is only beginning to develop here and the market is pretty much untapped, so we are hoping to serve as an influence towards the region embracing open banking and all the opportunities that come with that. I would also like to point out that we are able to activate and build connectivity regardless of open banking being present or not. We like to take the approach that companies like Plaid in the US or Truelayer in the UK did, whereby they were connected to banks despite frameworks and regulation being in place.

Finovate: Aside from open banking, what are some of the other exciting trends in the fintech industry in the Middle East/Abu Dhabi right now?

Aziz: There’s a general trend of growing interest for the kinds of applications that financial technology empowers, from digital wallets and peer to peer applications to investment platforms and digital banks. The market is new and rapidly evolving.

Finovate: We talk about the Middle East and North Africa as a region. But there is a great deal of variation among countries in MENA. How does this impact your ability to market your technology in the area?

Aziz: Beyond market considerations, the regulation surrounding the use of APIs in financial applications varies greatly from country to country. This is a new and mostly unregulated space, but we have had to consider completely separate approaches to integrating our services in the UAE as opposed to KSA, for example. Culture is also another important factor, as it varies between countries and impacts the products that you would want to launch along with the go-to-market approach.

Finovate: How has COVID-19 impacted the fintech industry in the region? Early in the crisis, we heard news from countries like Iran, but not as much since. How are businesses, especially fintech businesses, faring?

Aziz: The COVID-19 pandemic and its push towards social distancing and remote work has actually increased interest in digitization of financial services. For example, there have been a number of announcements within the UAE that the country will be moving towards enabling more online payments and other financial services without the need to physically go to a bank.

Finovate: You participated in the Y Combinator program. What was that experience like? What advice do you have for startups with the opportunity to pursue a similar path with a top-notch accelerator?

Aziz: Y Combinator has been a phenomenal experience for us. It really put us out there on the map and helped expand our network in silicon valley. From our experience, investors and VCs in the US are not usually convinced about investing in early stage MENA startups, but YC really helps establish that credibility.

Finovate: Tell us about your experience of setting up your business in Abu Dhabi.

Aziz: Abu Dhabi is an exciting place to work, since it is a rapidly growing and developing market, as mentioned above. Furthermore, we have received a lot of support from our involvement in ADGM and Hub71, which provided resources for us to establish and grow our operations in these beginning stages.

Finovate: What can we expect from Dapi over the balance of 2020 and beyond?

Aziz: We are very excited to continue growing and expanding into a variety of developing markets, beyond the UAE. At the same time, we have a number of exciting partnerships in our sights for the UAE, which we hope will bring our vision of a strong fintech ecosystem in the MENA region closer to reality.

Here is our look at fintech around the world.

Asia-Pacific

Singapore-based MatchMove launches cross-border remittance platform for businesses.
Clik, a payment aggregator and merchant acquirer based in Cambodia, raises $3.7 million in seed funding.
Leading Asian financial services platform GoBear teams up with UnionBank to launch lending-as-a-service solution in the Philippines; announces new Chief Financial Officer.

Sub-Saharan Africa

Fiserv inks partnership with Absa Regional Operations (ARO) to enhance credit card management and processing in nine African countries.
Ecobank Group unveils the finalists for its fintech challenge, now in its third year. Ten African startups from seven different countries made the cut out of an applicant pool of more than 600.
Salaam Gateway looks at the development of Islamic fintech in Kenya.

Central and Eastern Europe

Onfido to streamline digital identity verification for Poland’s Alior Bank.
Russia’s Tinkoff Bank launches new charitable program, Cashback to Give Back.
Austrian regtech kompany lands $7.14 million in funding.

Middle East and Northern Africa

Salt Edge partners with Jordan Ahli Bank Cyprus, making it one of the first banking groups in Cyprus to achieve PSD2 compliance.
Israeli fintech Approve.com raises $5 million in seed funding for its technology that automates the procurement process.
Infosys Finacle to deploy its Liquidity Management platform with National Bank of Bahrain.

Central and Southern Asia

Uzbekistan’s People’s Bank partners with Finastra to automate its risk management business.
TerraPay collaborates with Bank Alfalah to enable instant money transfers to Pakistan.
Indian B2B fintech Signzy announces plans to hire “close to 70” employees over the next six moths in response to increased demand.

Latin America and the Caribbean

Feedzai expands partnership with PayU, enabling the company to enhance its fraud prevention capabilities in Latin America and the EMEA region.
TechCrunch profiles Mozper, a digital banking service based in Latin America that caters to parents and Gen Z kids.
MercadoLibre announces plans to launch branded credit cards in Brazil and Chile “in the near future.”

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Five Ways Partnerships Between Banks and Fintechs Help Drive Innovation

By David Penn Posted on July 27, 2020
Categories: Bankjoy, Compass Plus, Finastra, Fiserv, Minna Technologies, Partnership Outlook, Temenos

To steal a line from Rob Base and DJ EZ Rock, when it comes to innovation in fintech, it takes two to make a thing go right. Whether the “thing” is an end-to-end digital transformation or creating the technology infrastructure to enable firms to build and market their own innovations, collaboration and partnership with fintechs increasingly seems to be the path that the most forward-looking banks and other financial institutions are pursuing.

With this in mind, here’s a look at some of the more interesting recent partnership announcements over the past month – with an eye toward what these collaborations might be saying about the near-term future of fintech.

DBS Bank: Headquartered in Singapore. Total assets of $420 billion (SGD 579 billion) in 2019. Largest bank in Southeast Asia. Operates in 18 markets around the world.

Partner: Infor
Project: Digital trade financing
Objective: Faster “more cost efficient” financing for the 68,000+ SMEs on Infor’s Nexus network.

Royal Bank of Canada (RBC): Headquartered in Toronto, Ontario, Canada. Has 17 million clients in Canada, the U.S., and 34 other countries. Total assets of $1.2 trillion (1.49 trillion CAD) as of 2019.

Partner: Red Hat, Nvidia
Project: In-house, AI-based private cloud platform
Objective: The new build will allow the bank to develop “transformative intelligent applications” and to bring those solutions to market faster.

Orange: Telecommunications corporation headquartered in Paris, France. Fourth largest telecom in Europe and one of the ten largest in the world with 26 million customers. Total assets of $124 billion (€106 billion) and revenues of $49 billion (€42 billion) as of 2019.

Partner: Temenos, NSIA
Project: Orange Bank Africa launch
Objective: Partnership will bring savings and micro credit services to underserved customers in Cote d’Ivoire, Burkina Faso, Mali, and Senegal.

Lloyds Banking Group Headquartered in London, U.K., Lloyds is the country’s largest digital bank with 16.9 million active customers online and 11.5 million on mobile. Founded in 1765, the bank currently has total assets of more than $1 billion (£833 billion).

Partner: Form3
Project: Along with partners Google Cloud and Microsoft, Form3 will help the U.K.-based bank “investigate and develop” a cloud-payments-as-a-service platform.
Objective: The collaboration, which also includes a minority equity stake in Form3, will simplify Lloyd’s payment capabilities and support enhanced data and new overlay services.

Banca Ifis: Specialty commercial and corporate banking firm for SMEs headquartered in Venice, Italy. The firm has more than 130,000 retail clients in the country, and online funding and deposits totaling more than $4.7 billion (€4 billion).

Partner: Raisin
Project: New deposit products
Objective: Raisin’s customers in Germany will gain access to deposit solutions available from Banca Ifis. The collaboration will enable German customers to take advantage of relatively higher interest rates available in Italy.

Other fintech/financial institution partnerships of note this month:

Bankjoy and CACL FCU and SIU CU
Compass Plus and Xalq Bank
Finastra and Educational Systems FCU, The Peoples Community Bank
Fiserv and American Eagle Financial Credit Union
Minna Technologies, Visa, and Lloyds

Photo by maitree rimthong from Pexels

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Helping Secure Digital Identities; Managing Financial Crime Risk

By David Penn Posted on March 1, 2020
Categories: 3E Software, Bazaarvoice, Blackhawk Network, ClickSWITCH, Currency Cloud, Daily news, Featurespace, Finastra, Fiserv, Flybits, ID R&D, InComm, iProov, Jack Henry, Lending Club, Lighter Capital, M1 Finance, MasterCard, nCino, Pindrop Security, Salt Edge, Sezzle, Temenos, Trustly, Venmo, Yseop

Two of the biggest themes in fintech – digital identity and the rise of fintech in Central and Eastern Europe – meet in the latest announcement from biometric authentication specialist and Finovate Best of Show winner iProov. The company’s facial recognition technology now makes it easier for users of SK ID Solutions’ Smart-ID Service in countries like Estonia, Latvia, and Lithuania to renew their accounts without having to visit a physical bank branch.

“This is a major development for all digital identity providers,” iProov CEO Andrew Bud said. “Estonia has proved, for the first time, that a remote, automated, biometric ID verification service can deliver the highest possible levels of security.”

Recognized as equal to a handwritten signature throughout Europe, Smart-IDs enable users to authenticate themselves and provide permissions online using a smartphone app. iProov’s facial recognition technology adds a three-second scan to compare the image of the user to the image on their presented ID document to help defend against fraud and identity theft.

Smart-ID also leverages NFC-based ReadID document verification technology from InnoValor.

Financial crime risk management innovator Featurespace will be helping Enfuce combat fraud and money laundering courtesy of a newly announced partnership. Enfuce, a financial services firm based in Finland, will use Featurespace’s ARIC Risk Hub to enhance its ability to protect its customers from fraud and financial crime.

“Our clients deserve industry-leading services that allow them to freely and fully concentrate on the success of their core business, without worrying about ever-evolving fraud,” Enfuce co-founder and chair Monika Liikamaa said.

ARIC Risk Hub offers real-time transaction monitoring for fraud and financial crime, enabling institutions to identify and act against anomalous and potentially dangerous behavior as it occurs. The technology also reduces the number of false positives by as much as 70%, keeping anti-fraud processes efficient. Featurespace introduced its fraud-fighting technology to Finovate audiences at FinovateEurope 2016.

Here is a round up of recent news from our Finovate alumni.

Sezzle unveils new logo along with its first annual report.
Flybits expands its executive team in New York, Toronto, the U.K., and Dubai.
ID R&D updates voice biometric solution IDVoice.
M1 Finance surpasses $1 billion in assets on its platform.
Armor Bank selects Teslar Software’s automated workflow and portfolio management tools.
Mastercard partners with myPOS to boost adoption of card payment solutions among European SMEs.
Black Hills FCU selects nCino’s Bank Operating System.
Bazaarvoice launches partnership program with Yotpo as the piloting partner.
Keysafe inks partnership with Salt Edge to access tenants’ bank data without the need to acquire its own PSD2 license.
Lending Club appoints Annie Armstrong as Chief Risk Officer.
Assaray Trade and Investment Bank selects Temenos Infinity and Transact to power its digital transformation.
Long John Silver’s chooses Blackhawk Network for gift card program.
Trustly and Fly Norwegian team up to let travelers pay directly from their bank accounts.
Pindrop launches Deep Voice 3, the new version of its voice recognition technology.
Mastercard CEO Ajay Banga steps down, replaced by Chief Product Officer Michael Miebach.
Venmo to launch debit card for teens.
Almost 600 banks select Fiserv’s Turnkey Service for Zelle.
Finastra to offer ClickSWITCH’s account switching technolkogy to its clients.
Simmons Bank partners with Jack Henry to leverage its Banno platform to build a digital presence.
Currencycloud and Currensea team up.
Yseop and Automation Anywhere join forces to scale intelligent automation.
Lighter Capital appoints Kevin Fink at CTO and Patricia Elliott as CSO.
InComm launches Roblox gift cards in France and Germany.

Finovate Alum Features and Profiles

Revolut’s $500 Million Round Boosts Valuation to $5.5 Billion – Global financial platform Revolut has secured its place as the U.K.’s most valuable fintech.

Dealing with Deepfakes in Fintech – The fintech industry is ripe with security firms, such as iProov, that use AI to combat both video and audio deepfakes with anti-spoofing technologies.

Envestnet | Yodlee Acquires Indian Data Aggregator FinBit.io – Envestnet | Yodlee has acquired another asset in its strategy to further grow and develop its data aggregation and analytics business.

Meet Sonect: Cash Network Builder, Finovate Newcomer, Best of Show Winner – What’s better than having a large pizza with all your favorite toppings delivered to your front door? How about a side order of cash, saving you a trip to the ATM or bank branch?

Azimo Taps Ripple for Cross-Border Payments to the Philippines – Fueling these payment transfers is Ripple’s On-Demand Liquidity (ODL) solution that uses XRP to source liquidity and complete money transfers within three seconds.

Lendio Lands $55 Million to Match Small Businesses with Lenders – The investment more than doubles the company’s previous funding, bringing its total to $108.5 million.

SheerID Expands Identity Marketing Platform – The move enables brands to identify and acquire new customers across the globe.

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Japan’s Digital Yen; Visa, Plaid, and the Opportunity for African Fintechs

By David Penn Posted on January 24, 2020
Categories: Finastra, Finovate Global

With FinovateEurope less than a month away, Finovate Research has been busily putting together a variety of features looking at different issues surrounding fintech in Europe. These insights will be published in an upcoming special supplement; stay tuned for our celebration of and reflection on PSD2’s second birthday, our look at venture capital’s impact on the surging challenger bank movement, and more.

This week on the Finovate blog we covered the $115 million raised by French challenger bank Qonto, looked at the new banking license U.K. challenger bank Vive Bank just scored from the Bank of England, and reported on Nigeria-based mobile money operator Paga’s acquisition of U.S.-based Apposit.

Here is our weekly look at fintech around the world.