NOW Money raises $7m in capital for Gulf digital expansion
The Dubai-based company, which has become a main GCC banking solution for the nation’s large population of low-income migrant workers, was founded in 2016 and uses mobile banking technology to provide accounts, low-cost remittance and a wide range of other financial services to the migrant worker demographic.
The fintech operates through a cooperative network. NOW Money partners with businesses to provide an end-to-end digital payroll solution for workers. Every company has access to a payroll portal to transfer employee salaries and other financial-based rewards and every employee is issued with a contactless-enabled Visa card and receives their salary directly into the NOW Money app.
Gulf expansion plan
The innovative solutions provided by NOW Money have been embraced by consumers and businesses alike in the UAE, where there is a large population of underserved people.
According to reports, the raised funds will be used by NOW Money, to enter the Saudi marketplace, with plans already in place to open an office with new staff in Riyadh. The company will also develop its products and services and will continue its growth strategy in the UAE.
Other investors in the fintech include Knuru Capital, Wamda, Commercial Bank of Dubai, Accion Venture Lab, DIFC FinTech Fund, and Hambro Perks Oryx Fund. NOW Money has also received investment from Expo 2020 and Visa.
Speaking about the latest funding drive, NOW Money co-founder Ian Dillon explained, “This funding is a si gnificant milestone for NOW Money. We are eager to build on our progress to date and realise our vision of creating a world where everyone has instant access to financial services they can, and want, to use. The investment has brought us the financial support needed to scale our expansion plans across the GCC, as well as strategic value and partnerships from each of our investors.”
Alain Dib, CEO of Knuru Capital said the fintech had made fina ncial transactions far easier for both businesses and employees. “We were impressed by how NOW Money has solved many challenges and pain points, working with numerous stakeholders and partners to now be in a position to scale dramatically and bank millions of unbanked. We are very excited to be part of the journey.”
Katharine Budd, co-founder of NOW Money agreed but pointed out that initially, reception to the fintech’s services were lukewarm. “When we started NOW Money in 2016, our mission was clear; simplify the world’s financial services. Initially, we were met with skepticism about a digital financial service, but the success of mobile money in South and East Asia gave us faith that mobile banking would be a sustainable solution for the millions of people who find themselves overlooked by traditional Middle Eastern banking options. We are excited to expand our team and build our customer and partnership base to truly democratise financial services and make money easy, for everyone, every day.”
Vica Manos, Partner at Anthemis Group pointed out that one of the most imp actful actions a company can take is to provide fair and sustainable access to finance. “NOW Money does exactly that,” she said “By opening up financial services to some of the most deeply left-out individuals, we’re confident that Katharine, Ian and the rest of the team can achieve genuine impact, changing the face of financial services in a region that right now is showing tremendous promise.”
Dillon continued, “There is no venture capital better placed than Anthemis Exponential Ventures to have led this deal, especially alongside other such high calibre Western and Middle Eastern funds. Two of our key partners, Commercial Bank of Dubai and Visa, have also played a critical role.”
Zafin: Banking is now in the era of the tech ecosystem
The development of tech ecosystems is placing the future of post-COVID banking in jeopardy. At a time when Big Tech can replicate the functions of traditional financial institutions, what can banks do to retain a grip on the market?
John Smith, EVP Ecosystem at Zafin, has a few ideas. A SaaS cloud-native product and pricing platform for financial institutions, Zafin is preparing the next generation of banks to cope with this precise challenge.
Smith is responsible for the strategic and tactical management of the company’s ecosystem, including the creation of new business models to support growth and differentiation. We asked him four questions:
Q. Have the events of the pandemic caused an irreversible shift in the digitalisation of banks? If so, is COVID the sole cause or are there other factors?
It’s a great question and one that I am asked a lot. Without a doubt, the COVID-19 pandemic has driven a significant shift in the acceleration of digital. In fact, I’ve seen some estimates show there to have been as much as four to six years of digital adoption growth since the initial lockdown started.
While the pandemic may be the primary reason for this growth, two other drivers include fintech disruption and the high costs of operating a traditional retail bank. Both of these factors have caught the attention of banking executives as they set their minds on accelerating digital transformation with a focus on high return, low risk.
Q. Some commentators believe banks must learn from Big Tech in order to survive. Do you agree? Please expand.
I agree completely; we’re living in the era of the ‘ecosystem’. All the seismic shifts we’re seeing in technology, be it aggregation, embedded finance, DeFi or hyper-personalisation are all enabled by the foundation of an ecosystem.
When financial institutions work with a strategic partner like Zafin, which has made the strategic investments in a best-in-class ecosystem, they’re able to capitalise on opportunities more quickly and safely, and will be better positioned for growth now and at the other side of the pandemic.
Q. What are currently the obstacles to adopting Open Banking? Is it more likely to 'take off' in some regions rather than others?
I would argue that Open Banking has been in the US for some time and will only continue to grow there. By definition, Open Banking is about the secure sharing of financial information that customers are aware of and have authorised. Under that definition, we’re seeing aspects of this well underway even though its full potential remains to be seen.
Third-Party Providers are a natural outcome of Open Banking, whereby they can create propositions beyond what a bank normally does to enable banking functions such as payments, borrowing, saving and so on. Once again, some of these are already present through industry-led initiatives, whereas regions such as the EU have taken the pathway of regulation such as PSD2.
The industry-led initiatives we’ve seen in the US have also had the added advantage of guard-rails that regulatory bodies like FFIEC and CFPB provide. There are also other technology-led initiatives such as API definitions that are set out through the FS-ISAC.
I would argue the future of Open Banking in North America will be through the natural evolution of the guidelines and API definitions that have been published, as well as the natural progression of industry initiatives.
Q. Are there any other bank tech trends you'd like to discuss?
Coreless banking. Zafin has been pioneering some of the work around externalising functions out of the legacy core to drive a more ‘fintech nimble’ bank, while not having to deliver a ‘heart and lungs’ core bank replacement.
Real life examples of this include moving some of the core functions of a banking system, such as product and pricing to a platform like Zafin. Origination, onboarding, KYC, risk, and compliance are all other examples of externalising banking functions for added agility.