What is the concept and idea behind Wio Bank? What would inspire you to make it the key region player?
If you look at the digital economy, it’s growing significantly. I think the UAE wants to become a hub of digital, they have a very clear strategy for it. But one of the first things they realized is as they build these capabilities, what they needed to enable digital was a bank, that was digitally native. There are fantastic banks in the region. In the UAE, especially quite a few innovative banks. But the digital economy requires a fundamentally different bank.
And when they approached me, this to me was incredibly exciting. I think banking is changing at a pace that it’s never changed before I had. I find it very exciting trying to figure out how banks need to evolve to serve tomorrow’s businesses and consumers. So I joined about two and a half years ago to set up this concept.
And what does tomorrow’s bank look like?
From our perspective, we see tomorrow’s bank having three core aspects which are the ones we want to follow. The first one is – we believe there’s an opportunity to serve customers better with smarter, simpler and more seamless apps. Therefore we launched our business banking app which is doing very well. We are just doing the beta of our retail app. These are genuine products going into the market serving our consumers.
The second big strategy we are adopting is embedded finance. And here we believe digital platforms will continue to rise whether it’s full delivery, whether it’s e-commerce, whether it’s trade, whether it’s healthcare. We believe they’ll be dominant platforms across every industry. And we want to serve our customers on those platforms. So, embedded finance is our capability where we work with one of these partners or many of these partners to create customized solutions for their clients.
The third key thing we want to do is launch banking as a service and this focuses on two parts. One we build incredible tech. Two is with our capabilities. We have compliance risk security. How can we build technology that helps the industry? This way we reduce overall costs and drive more innovation.
Considering the products you have already launched, have you run into any issues with them?
I always say the difference between traditional and digital banking is traditional banks launch products. Digital banks launch versions. Our product journey never ends. What is right for today doesn’t mean it’s right for tomorrow. So I think you have to continuously iterate. I think we’ve had fantastic responses from our customers and if you just go to social media, you’ll see all the positive comments we have.
Currently, we were acquiring more new business customers than any other bank in the country. I believe this to be a testament to how well our customers are receiving our proposition. We continue to be the leading bank for new account opening for businesses, and that’s incredibly rewarding for us.
What have you learned so far from your experience?
I think we’ve learned a lot. We’ve learned a lot about UI and UX and how to improve the customers’ journey. We’ve learned a lot about meeting the needs that our customers have. For example: when we started, we hadn’t prioritized things like post terminals or payment gateways. But as we started working with customers, they got increasingly more interested in this area and we had to quickly go and find a solution for that. We continue to improve our product pipeline; we need to enhance it.
When we started, we focused on small businesses and very soon we started seeing interest from larger companies – which was obviously fantastic for us. But the question suddenly became: Are we ready to serve them? Because to serve them – we need to build more complex capabilities. So you have multiple approvers, multiple signatories, joint approvers, different limits, and multiple accountants.
As in every business there is a lot of competition and you may be even considering acquiring some competition. Is that something that’s on your roadmap?
I think in today’s digital economy we have to realize nobody has a monopoly. I think there’s a lot of really smart people working on a lot of things. And I think aggregating these capabilities is definitely a strength for any company. So for us in a long term, we absolutely think we will acquire companies. inn the shorter term – We are just starting out. Banking is complex, we need to make sure we are right in our governance. We are right with our customers. We are right with our regulators. We are right in our service.
So for us, the first few months of the first year, we are focused on building the core foundation. Once we have the foundation, we will look at companies to acquire or partnerships, but I think it’ll be more opportunistic based on what our customer needs are. It will be a core part of our strategy, but for right now we need to build the foundation. So that when we acquire a company we can integrate them.
You don’t just provide SME’s with banking accounts, but there’s also a possibility to provide them with funding. Can you just please elaborate on that a bit?
With digital we have been able to identify ways in which we can do this better. The more digital commerce you have, the better data you have and based on better data, you can provide financing. We plan to launch financing. We’ll do that first on the working capital side. Because we see businesses shifting from large fixed costs to move variable costs. And the need we see growing will be more operating capital rather than capex. So this is something we are very keenly working on.
But if we can’t provide you access to funding because it might be outside our risk appetite or we might not be rightly quick for it. Then we want to bring the partners. There is not just one way of funding a company and that’s the bank. There are venture funds, there are Angel investment funds. How can we bring this to you as a customer and you can access it on one singular platform? So you can get addressed the need you have so – this we think is a very exciting space.
Do you plan to expand in the region or even to Europe? Is that something that’s on your roadmap?
We have been designed and built to scale. And that is to scale in the UAE, but scale into other markets, so that is one of our core strategies. We plan to grow into new markets, but I think before we do that, we need to get our fundamentals. We need to serve our customers as well. Build our core platform so that it’s robust. And then start looking at other markets.
The region has some fantastic markets which are incredibly attractive. Africa, South Asia, and possibly even Europe have some very interesting markets for us. Where we go, depends on how much value can we add to the consumer base there. So we want to go into the markets where we add value to the customers and we have a very clear distinction of our value proposition.
Considering your partnership with Abu Dhabi Department of Economic Development. Do plan on to maybe partner with so many more institutions, maybe even brands?
I think the partnership with ADDED is incredibly important. They bring a lot of insight into what companies are looking for. They are licensed issuing authority. In the UAE, we have about 52 authorities where you can register a company and we partnered with almost all of them. I think strategic partnerships are key. If you look at a digital economy, we believe the partnerships will help you drive growth, but more importantly – a better understanding of consumer needs and better servicing of consumer needs.
We’ve partnered with Stripe to provide our customers with an e-payment gateway. And it’s very simple. The customer has their stripe account set up in a few hours so they can focus on their business and we continue to do that with different brands. So where we can add value to our customers will partner and collaborate.
What do you believe would be your major revenue stream? Can it eventually be your banking as a service option?
We think banking revenue pools are very strong. So where do we make money? That’s obviously interest in the income we are generating from deposits and when we will start lending we’ll start generating interest from landing.
There’s fee income from fx to some of the other services that we will start providing including supply, chain, financing and trade. So we think we will focus on our core revenue streams. These are banking-related but as we mature and grow, we see that becoming maybe half of our revenue streams, the other half of our revenue streams come from the two elements – one you talked about is banking as a service.
If you’ve built the tech and it’s good, you have the capability to support, not just the technology but elements like compliance, anti-money laundering, and fraud. Then there is a lot of value to be generated and we plan to see this becoming a strong revenue stream.
The last revenue stream is the revenue we generate from embedded finance. This is more like banking revenues but just generated from a different revenue-sharing model. We think banking revenues will stay strong. We think that’s what makes us profitable. The other half of the revenues come from embedded finance and banking as a service.
Thank you very much. Is there anything that you would like to add?
I think the space we were talking about is very interesting. I think it’s going to evolve rapidly and I think there is no one right business model. But I believe that as digital players we all learn from each other.
I’m sure there’s a very exciting time ahead. There’s a lot of innovation and the customers will win, because they will get better service. They will get a true partnership and hopefully, it will help them achieve more of their goals.