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As the Middle East builds a cashless tech infrastructure, Arundhoti Banerjee, associate vice-president at Xpress Money, tells Computer Weekly about the foundations being laid for cashless payment systems.
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Xpress Money, a money transfer brand and subsidiary of UAE Exchange Group, said businesses across the region need to embrace digital currency, cashless payments and smart products if they are to curb fraudulent activities that cyber criminals are using to steal money or demand a ransom.
Cashless transactions offer several benefit, such as leaving a digital trail that is very effective in combating money laundering, according to Banerjee.
She said going cashless reduces counterfeiting risks, and also lessens the overheads of replacing damaged currency. “For both business and consumers, cashless transactions deliver convenience and the ability to manage payments more effectively,” she said.
“Digital transactions leave a perfect record, which really helps with anti-money laundering and enhances financial transparency.”
Banerjee added that another way the term digital currency is used is to refer to cryptocurrencies such as Bitcoin, which are run through a system of global ledgers called blockchains.
“Blockchain technology is seeing adoption in the United Arab Emirates [UAE] already, with well-known banks exploring ways of using it to benefit their clients,” she said.
However, Banerjee pointed out that bitcoin, which is a specific type of cryptocurrency, has yet to gain tremendous traction at institutional level in the region, although there are reports of some local businesses accepting the currency.
“In fact, earlier this year, the UAE Central Bank explicitly clarified that virtual currencies such as bitcoin are not illegal, paving the way for future adoption and innovation, which is largely being driven by fintech [financial technology],” she said.
As a company playing in the financial services space, Xpress Money is excited about the security and transparency possibilities created by the blockchain technology, where ledgers leave a clear trail, said Banerjee.
“We are looking at ways to embrace the technology. We are also looking closely at the cryptocurrency milieu for opportunities to create innovation there,” she added.
Bringing innovation to customers
Banerjee said Xpress Money prides itself on being an agile brand that is always looking to help its customers take advantage of innovation.
“We are harnessing the power of fintech in several ways to improve our own service offerings. First, we are enabling mobile wallets in some of our international markets and giving customers the option of remitting straight to a smartphone,” she said.
She said mobile wallets have seen tremendous success in the African continent, with Kenya, Tanzania and Uganda leading the way: “The mobile wallet technology is extending financial empowerment and convenience to previously unbanked audiences, and improving the quality of life there.”
According to Banerjee, Xpress Money is also working on larger scale fintech offerings that allow financial partners to use the company’s systems for services to their customers.
“Our virtual agency model offers an open application programming interface [API] that banks and other financial services providers can plug straight into so they can start offering very competitive international transfers to their customers through their own portals,” she said.
She said the company is also looking at innovative ways of enabling remittances through social media channels.
“Xopoto, our social remittance platform, is currently available in the UK, and allows young audiences to combine financial transactions with a social network,” she said. “It enables users to wish someone a happy birthday, and send them money for a gift on the same channel, which makes the experience very intuitive.”
Collaborating in the fintech space
Xpress Money is well known in the Middle East financial services sector for its openness towards collaborations with companies of all sizes. For example, it works with large banks and financial institutions as well as agile fintech startups.
“For instance, we have recently collaborated with WorldRemit, an online money transfer firm with a global reach,” said Banerjee. “The partnership was easy for the company because they are already compliant with financial regulations, and have a very customer-centric culture that gels with ours.”
She said the fintech space remains an exciting sector in the Middle East, with a lot of startups working on better first mile and last mile customer experiences. “What the fintech firms operating in the Middle East are very good at is creating innovative channels and interfaces for customers to request financial services,” she said.
But Banerjee said some startups often find it a challenge to clear the regulatory and legal requirements for offering financial services. “Quite often they don’t have the resources to scale towards critical mass, and we’ve seen promising startups emerge and begin offering services but haven’t seen explosive growth in their businesses.”
Despite this, Banerjee said company is seeing tremendous scope for partnerships where fintech firms take financial services to new audiences through really intuitive platforms, and the conventional provider then steps in to actually process the transaction.
“Established players such as ourselves are benefiting from the innovation fintech firms are bringing to the table, while startups equally benefit from the size, scale and regulatory safety that conventional remittance brands offer,” she said.
In the future, Banerjee said Xpress Money will use big data and analytics to improve customer experiences as this is at the core of what the company does.
“While we tend to think of fintech in terms of apps and social media, many of the world’s largest fintech concerns are actually addressing CRM [customer relationship management] and big data needs,” she said.
“In the Middle East, headlines are often grabbed by novel apps and platforms, but fintech firms are doing very advanced work on bridging the analytics gap and helping conventional financial providers make sense of the data they collect.”
Read more about fintech in the Middle East
- The financial technology industry could be at the start of a period of rapid growth in the Middle East.
- The Middle East has been slow to join the fintech revolution, but there is an opportunity for CIOs to help banks stride ahead as demand picks up.
- The CIO of Standard Chartered bank in the Middle East tells Computer Weekly about the challenges of keeping customers happy through IT.
- Abu Dhabi Securities Exchange offers controlled access to the AGM information of listed companies through a blockchain-based service.