A Leapfrog Moment for Regional Fintechs: What's Next?

[Music] [Applause] thank you very much Flo I should um just admit that what a wonderful um introduction thank you thank you very much for the introduction and I can't agree with you more we have um a fantastic panel today with us today who would be able to share with us insights um experiences um as as you can see here on the stage a very quick introduction in the interest of time um we have here on the panel on my left side we have Mark shahwan the co-founder and group CEO of SWA um nepur M the co-founder of of OCTA we have Sumer ammer the co-founder of thunder and Co onozawa who's the founder of pumi starting with you um Mark and speaking more about SWA which I'm sure everyone knows very well so Mark SWA has a reputation for offering Tech driven investment Solutions how are emerging Technologies particularly Ai and machine learning transforming the way you offer financial services and what Innovations do you see as crucial for the growth of the fento ecosystem in the region awesome thanks for thanks for for being with us today so for those that don't know sarwa we're one of the uae's first and leading investment platforms we see AI as something that started before uh some of the more recent Hypes I think it played a big role in how we started by making it easier to open an account an investment account something that was very honorous and now it's becoming much more democratized so AI has a big role to play in democratizing investing making it much easier so for example opening an account with a selfie way back a couple years ago is very transformative today it's we got used to it I think now the next batch of AI is being developed that we're starting to see uh chat chat Bots uh is is a very common use case people are using it for customer service um I'm personally using it for Equity trade ideas there's a lot of insights research so the general Trend that I think AI is playing is that it's it's uh allowing people not to need advice ERS and it's giving more agency to uh people to make their own uh decisions their own research so I I expect that this is going to fuel uh a lot of a lot of people to that were a bit nervous about investing or trading to to take to take more confident investment decisions thank you very much and I can't agree with you more um we've seen several use cases even during this week and um AI is becoming and even machine learning is becoming BEC um you know part of our daily usage whether as individuals or as um institutions speaking about cryptocurrencies and crypto platforms and um Co allow me to ask you this question um but before that um digital asset overall is something which we representing here SE Ventures um um we've been investing a lot and it's part of future it's here to stay as we believe and maybe as a crypto platform with global reach how do you see the adoption of blockchain Technology reshaping traditional Financial Services in the Middle East and what opportunities does this create for both startups and investors in the region two very heavy questions thank you for that uh thank you guys for being here for those who are not familiar bit to me is was born in Spain we founded a company in 2015 were the largest crypto exchange and custodians in in in Spain but we have we have also exposure in Latin America as in Argentina Peru specifically and then now we're our Global expansion we're doing it here from Abu Dhabi we make crypto less weird and really really safe we've been doing it since 2015 with an Academy of more than 10 million alumni and and millions of users that enjoy our product over 100 different countries that's how we that's the problem we're solving right we're making it cheaper and safer and and and easier for normal people to understand cryptocurrency and then we shifted our Focus to Advanced users so people who want to trade people who want to take crypto back loans people who want to rewire the piping of crossb transactions that's what we're helping them also we're backed by several tier One banks in Spain and Latin America who are launching the crypto wallet with our infrastructure and that's making it easier for them to also do what I just said and so crypto and digital assets make things more more transparent faster and cheaper and everybody benefits from that both both the builders and the end user right especially here in the region where there's billions being transferred in remittances that's an area of disruption with digital assets and that's just the beginning so our goal is is so that everybody will have a wallet before their bank account or their bank account will have a wallet with it the O the the second question was opportunities for was it entrepreneurs was yeah so the other question was sorry um opportunities opportunities created for both startups and investors in the region okay so obviously as a nent industry there's a ton of problems that this technology can solve so I would the opportunities lie in identifying the different problems in the different regions and to be honest in in Europe it's in in Latin America it's is very different the problems are really really different right in the European Union we solve what we call interne like rich people problem or first world problems how to get exposure with Bitcoin how to trade more efficiently and then in Latin America we're helping the average person get easy easy exposure to the US dollar because their currency is um more volatile one for lack of a better word and so and then we make it cheaper for them to send money to their families and faster so we're changing lives in that in that respect so the opportunities here in the GCC are kind somewhat similar you can bring in the these new technologies where it makes sense and partner with the incumbent so that you can do this much faster and if you implement AI what Mark was saying where it also makes sense then this can this can be accelerated right the beauty of this region the opp opportunity it's almost like a green field you can start building um you can start building based on use cases that you we've seen abroad and then get investors to to back you because it's it's there's so much there's so much to do here so I think the opportunity right now for Builders and investors the opportunity is right now thank you thank you very much and um maybe just a quick comment on what you've mentioned as well here you know the regulatory landscape is something which makes this region very unique and very um um you know optimistic for investors to be here especially when it comes to to digital assets and maybe um moving to nepur from OCTA maybe allow me to ask you a regulatory question I mean if if you've seen on certain panels today um the the the regulatory infrastructure and how well is the regulatory framework well established in in Abu Dhabi and in the region is is a key differentiator compared to many other regions so how do you ensure that you stay ahead and you stay always compliant with um the regulatory requirements um and how do you see it impacting the overall fench ecosystem uh thanks for the question so just a quick background on what OCTA does so it's a B2B SAS platform which help businesses to collect invoice payments on time it's a major issue uh there's less than 30% of the businesses actually receive money on time so we are using AI ml to actually work in this region to solve that major problem coming from the regulatory aspect in this region specifically in UA I think uh there is government initiative taking in place where they are helping fintex and specifically on the B2B space uh providing them full coverage on how we can navigate it and that's majorly through the partnership so the you'll see there are banks who are giving you regulatory license uh nooc is to actually work towards the advanced technology to take that case and secondly from the security and compliance side as well you'll see there are finex coming in the market who's actually helping to make your system secured from sock 2 ISO P PCI all these things which used to take like years to actually achieve can be done in few months based on the specific regulations being passed in UA as well as the other markets in the minor region thank you thank you very much save a very similar question um when it comes to regulatory advancements and and Mina region impacting your business how do you see working with The Regulators here in the region and how do you make sure that you always remain compliant with the regulations yeah thanks FES and thank you everyone for being here uh safe here from Thunder were an investment app that helps people invest in local stocks local gold and local fixed income we launched in Egypt four years ago and to they were leading the retail market in terms of market share where 10% of the local retail exchanges happening through Thunder and we actually account for 50% of the assets under management of gold ET mutual funds in Egypt um I think a big part to your question and you hit it right on the nail f is is the regulator we're fintex all of us and I think there's a world where it's either you're unregulated or regulated uh if you decide to go with the unregulated path even though you needed to go into the regulated path I think it's only a matter of time before you hit regulations but I think it it is smart to start it from the very beginning and I think what really matters is is making a partnership out of it with The Regulators I think we can all agree that our region is very behind when it comes to the global uh scene you have the US which is a very huge Market on its own regard you have Europe where one country unlocks all the other remaining countries then you have Mina where even though we're relatively smaller in comparison but we are growing very fast and I think a big part of this growth is the ecosystem whether it's Founders whether it's investors whether it's regulators and I think we can only uh Thrive if we all partner together I think this is the route that we took at Thunder um in Egypt we actually partnered with the regulator in changing 20 laws 20 laws that govern our business it was important for us to be able to scale but it was also important for this to happen that we partner with the regulator in the sense that the regulator is not a big bad guy you know it's not someone who just says no it's someone that actually has the best interest of the business but also needs to make sure that it has the best interest of the other ecosystem players including the the everyday users and once you change this relationship where I need this to do that and more of what are your concerns and what are your risks this opens the door for negotiations and life is all about negotiations you really understand what the other party wants what you want and how can we find the win-win I think this really helped us a lot in Egypt um if we take this into comparison to the UE which we are also regulated in I think what's nice about the UE is that The Regulators actually very Progressive here in the sense that the most of the conversations are not the problems that we have today but most of the conversations are the problems that we probably hit collectively and maybe a year or two or three years uh in time but it really gives this buffer zone where we can work a lot uh together and and yeah this is how we mainly think of it thank you thank you very much safe and um very well summarized I should I should say and maybe just before moving away from the regulatory perspective um you know very similarly to what everyone mentioned on the panel um SE Ventures you know the focus is purely on um ensuring sustainable and um um you know longer term growth of our fentex and Ventures and that's impossible without a proper regulatory framework and proper compliance with um you know the regulatory requirements so thank you all for for your views on the regulatory requirements Mark I'll I'll come back and you know SWA is is very well known in the in the region um on on making significant strides um in democratizing Investments how do you see the role of investment platforms evolving in the region especially with um you know the the different uh you know impact to the investors and the investment ecosystem how do you personally see it um from a sarwa um lens yeah I think there's been so it's our seventh year seventh year this year and it's evolved quite a lot since we started when we started um hey Nick good to see you we had great Partners like ni Nick and constantinos at saxo and everyone around Focus partnering and offering one thing which is call it digital wealth management I think what we've learned with time is that once it's not just about unbundling what banks are doing it's about adding additional products that customers uh would love to use whether it's uh gold and commodities to safes Point earlier uh fixed income uh having more decision- making being able to trade on your own um so there's many asset classes and if I were to simplify it if you look at family offices so the billion dollar plus if you look at their portfolio uh it has a wide variety of asset classes they're not just in public equities uh they have a broad range of assets and I think fintech is is mapping with that uh with that vision in mind so that eventually when once all these uh Technology Solutions all the regulatory Solutions have have happened the there's a bigger democratization of um of investing where you have one platform that offers you many different solutions and I'm not having to I don't unless I decide that I want to use many apps I I benefit from having one app where I can use and and and the sum of all of the these products provide more value than just using it this one thing so in in a nutshell it's we're we're strong Believers of that One-Stop shop uh evolution of Finch from where it began where you had the specialization thank you thank you very much Mark and um going back to you co and you know speaking about digital assets um being viewed as um a disruptive product in the market to certain uh traditional service providers and financial um um you know institutions how do you make sure that you know you engage with the wider ecosystem um especially coming up with um you know a you know a crypto platform which is which is something still new in the market in the ecosystem and when I refer to the ecosystem here um you know parties including for example investors um regulators and the entire ecosystem H how do you do it so when we're expanding to different markets it's not a copy paste that's number one right so we're in Argentina we're in Peru we're in Spain Portugal now in abudhabi for the GCC I believe that just how banks have corresponding Banks crypto will have to work with corresponding vasp or virtual asset service providers there's no use coming here and building another competitor local competitor where so you can buy Bitcoin safely and easily we all have to be the best in our demograph in our territory and work together so that we get more liquidity on chain because more liquidity on chain is just better for everybody I feel um so here in particular in Abu Dhabi or in the UAE for example we've because of our regulatory Pro um advances in Europe both in Securities and and and and crypto like Bitcoin we've appied all of that so that we can connect to the different Brokers and exchanges here so they can then distribute some of the digital assets that are available in Europe are otherwise unavailable here or they can have access to cheaper liquidity through our order book and and I think that's a way to do it and then vice versa we can also offer as a distribution channel for UAE or GCC assets that are either tokenized or or or stable coin uh money movements to get in and out of deam to Euro easily so that's how we look at different markets um Partnerships is a really important aspect for our business and um we try to work with the different players in each value chain so just to summarize that value chain is for example emission of the first of the token so that's with a Launchpad or stable coin isure and then you have the broker and exchange and then you have the the banks for settlement so if we cover all three in different markets with the different uh leaders in each area then things flow faster there so here we have we're very proud of our Partnerships with our UAE with our UAE um not otherwise people think we're competitors they're not they're they're they're our real partners and we've been and that's been good for business since Landing here about a year ago thank you and maybe allow me to um reemphasize on two different statements you've you've made so not copy pasting what we have in other markets here because it does not always work that's one um and then then the the second Point um you've mentioned was about Partnerships and this is something which you know Forum such Abu Dhabi Finance week is is is a fantastic Forum to partner and sign M us and um to work with strategic Partners neur moving moving to you and um asking um a question about the Technologies um such as AI machine learning and you know again how is that disrupting our businesses and our ICS how do you deal with that and how do you make sure that you know you stay ahead um from from your perspective thanks vus I think especially in finance space and if you are dealing with Finance team the technology has become stagnant to using accounting software and excels so the idea to use Ai and it's it's companies like OCTA where we are actually not being a platform or a tool but a Catal L IST for those fin fintech ecosystem we are helping businesses here to transition from reactive to a proactive State what does that mean is basically if you reach to any business when do they see from a finance perspective and issue when they have huge invoices due they have high accounts receivables and they have a major cash flow problem and that's where they start taking action on it uh so in Octa what we are trying to do is that from day one when you are actually signing a contract creating the invoices the full process can be automated using AI at this stage from the creation of the contract till the final stage of reconcilation of payment everything can be automated at this stage using Ai and then on that on top of that this improves the efficiency of the team you can have a better cash flow prediction model the predictability of your risk credit risk analysis at this stage just using Excel won't help when the uh age is moving on towards AI the real time insights it's where it helps that's the second thing and third thing is the personalized way of doing the financing if you have to reach out to anyone for the collection for the payments the same old gentle reminder doesn't work there needs to be an element of personalization you see how sales or the account manager actually dealing and trying to get the ARR numbers high right on the same way if you have to achieve from a finance team perspective from a collection angle it cannot be the same standard way to do it so the personalized angle of AI similar to how chat GPD is doing you can actually achieve doing using the AI language in the system itself so those are the three main things I feel uh which is actually new age from the way how we are dealing from the finance perspective well said thank you very much um safe Finance IAL inclusion is something which is um you know very close to us at SC Venture and um you know it's it's one of the convection themes we focus on so we have four themes and one of the main themes is financial inclusion one of our homegrown Ventures myo is is focusing on financial inclusion and um within Financial inclusion we have financial literacy I mean we still um see a need in in certain markets where the financial education is not yet at expected level what's your views in terms of the educational role overall um when it comes to financial um education and um how do you how how do you contribute or how do you solve the issue from a thunder perspective yeah thanks Fus look I I'll talk a little bit about our space and if you took if you look a little bit on the US front you're going to find that 60% of adults are actually participating in the financial markets whether they're invested they they're involved in one way or another if we actually take this statistic and look into the Mina region it's it's less than 5% and I think a big part of that to your point Fus relates to education I think people in the US and the developed world they're groomed into a certain manner when it comes to managing their budgets and finances you in school you're taught how to uh how to manage your finances your money that investing makes a lot of sense then University the same thing with your friends and your family and all of that and then you have all the access in the world to do that I don't think we have that in in in in the Mina region uh definitely when I was going up FYI I'm an engineer by training so have nothing to do with the finance World um and I I saw a lot of these obstacles early on um and to that point I think most of the market is not served and is not tapped into what offering that we're offering and I think education plays a very big role and if I can give a few examples on how we do it in Thunder and potentially like um have an open discussion on it at a later point after the panel when we started off to me and to us at the team education is not download the app figure out yourself in the app and then we'll just help you once you're in the app most of the people are not even thinking of investing you need to catch catch them at the point where they're at their homes watching Netflix not even thinking of anything and then at that point FYI there is this world C investment it is related to you because of X Y and Z and you take them from the consideration phase give plan the seed inside their head when we started off with that we relied a lot on brand and content for this we actually have our own internet studio for for that um but we also fac a big hassle especially in the early phase and to Mark's point on trust trust in a financial instution is a very big thing so even in the early stages no one knows SWA no one knows Thunder in the very beginning days you know um so we quickly found out that in the beginning days you wanted to have spill over trust and yeah if if I try to convince someone that I don't know about investing it's one thing if I try to convince my best friend about investing it's another thing so with that we relied heavily on on uh Mega influencers and celebrities uh to send across the message they know how to talk to their own user base they know how important it is and they can actually spin it in a manner where this is actually right for you and it's coming from someone you trust but also we relied heavily on building a community uh Egypt is very big on Facebook um and one of the biggest Egyptian Facebook groups on uh on Facebook is is thunder it's more than 200,000 people and these are just organic content that are just being generated and people genuinely talking to each other for this F over effect really pushed and then I guess once this is there they have the Thunder app or whatever app that they're using uh it's all about how do you convert them into like some active user and I think this point it makes a lot of sense to try to influence it as much as possible so gamification was a very big thing for us uh where we allowed people to go into a simulator mode just have 100,000 fake currencies just do buy whatever you need to buy and figure things out it it softens the blow of actually having to put my money and taking risk on something that I don't understand um and then what we quickly found out so the very very V1 phase of this me and hamuda my partner we were writing learn content for people to read we would find that people would just open them and then five seconds later they would just close it and we quickly found out that attention spans are very low people have intent but they just don't want to go through the process and then it's all about how do you actually like Hammer the message and then we found that microlearning is a very big thing where don't just like send a lot of material in their faces and like read this do that and it's more of with every step of the way you just give them this extra little hint that they need okay I'm I'm doing my account opening form this is why it's important for you on average someone makes x% per year and this is beating inflation okay I'm I'm buying into this one single asset F I need to diversify why is diversification important as such to be honest I don't think we've cracked it uh I think this is the beauty of Education if we have 5% versus 60% in the US means that there's so much more to to go and I think sending the message is a hyper tailored experience if you vus are getting a piece of input from me if I can't say the exact same thing to mark and it would actually resonate for them but we keep iterating and we keep trying things out and with every piece that we try we keep unlocking an addition later ler retail is hard huh retail is hard it's beautiful and it's um makes you very proud you know when you see your family and friends and everyone investing like maybe very quickly we should recognize the effort done by by the UA when it comes to financial literacy and financial education we've seen many examples and um you know I thought of recognizing the efforts um we are running out of time we have one more minute so any final um you know views comments you want to share with the audience in few seconds Mark will start with you yeah I would say um you know since we're in adgm just might might as well highlight there's a lot of credit that goes to them as well where it's they're a very easy entity to talk to share your business model with and U end up with a quite quite a custom arrangement for your business so there's not enough time but just please reach reach out to me for all things crypto tokenization Europe Latin America and and and these guys are super smart too so kb.com I think going with the co approach if you struggle in in your business to collect payments please reach out to me but in general I wanted to say that I think the efforts which government has taken especially in Abu Dhabi itself it's it's been recognized at Global level so we are actually talking to customers investors from us side and they recognize adgm at that scale so that's commendable in just few years we are uh in Abu Dhabi being able to match the standards of us it's it's amazing yeah and the one thing I would say is and obviously in our space the regulator is a very important partner if you start with no I shouldn't reach out to the regulator then you already failed I think if we look at our region one there is a very big point of in intent from The Regulators to make changes so that they unlock their own kpis as well but also we're very lucky that we have ecosystem players like we have someone like up 71 they're very generous with their time they're very uh knowledgeable of the space they love making these connections and they can actually bridge the gap between not just the regulator but also uh other partners and if there's anything that myself can help with I'm more than happy to do that I'm pretty sure the same with the other um other individuals here yeah maybe to conclude here um indeed adgm Abu Dhabi and the UA is more and more becoming um not just a regional Hub but it's it's an international Hub and um thank you very much for um the the thorough conversation I personally enjoyed the input shared by the panel um our audience thank you very much for your time and um enjoy the remaining sessions of this week thank you thank you thank you [Applause] [Music] I