Jan 8, 2021

What does 2021 have in store for fintech?

Yobota
Fintech
2021
Open banking
Ammar Akhtar, CEO, Yobota
4 min
What does 2021 have in store for fintech?
Like all industries, the fintech sector has experienced its fair share of challenges in 2020...

Like all industries, the fintech sector has experienced its fair share of challenges in 2020. Although there were many obstacles to overcome, COVID-19 has also triggered (or accelerated) new opportunities. 

While it is never easy to predict the future, particularly in uncertain times like these, there are undoubtedly a number of important trends that are likely to become more prominent in the coming 12 months. 

Fintech's unavoidable 'new normal'

Starting with the most obvious one: COVID-19 will continue to have a significant effect on fintech. Important questions must be answered as finance companies consider their priorities for 2021. Most notably, given fintech will remain a crucial part of consumers’ and businesses’ day-to-day lives, how are firms going to deliver services that meet the evolving needs of their customers? 

An unprecedented reliance on technology means that banks offering a poor user experience and services via their apps or online platforms will quickly fall out of favour. This point will only become more pronounced in 2021. The sad reality is that many bank branches may never reopen, and fintech solutions will have a key role to play in improving the availability and accessibility of financial services. 

Eyeing up the competition

The path to profitability will be a key consideration for fintechs in 2021. The sector has gained considerable traction in recent years, both in terms of public support and investment, and new players are entering the market on a regular basis. 

As the industry becomes yet more established, the clarity and validation of business models will become much more important. After all, not all existing banks, lenders and fintech vendors will survive in their current form. 

Players that are looking to enter and establish themselves in the field must acknowledge the importance of having a solid value proposition – one which is clearly differentiated from their competitors. To do so, fintech vendors will need to demonstrate that their products work at scale. Key determinants of success will be whether their target groups are large enough, and whether the technology architecture can handle large scale growth. 

Unlocking the promise of Open Banking

Despite its attention, Open Banking is still very much in its infancy, particularly when it comes to consumer awareness. In fact, at present only 18% of UK banking customers know what it means. 

Now comes the time for Open Banking solutions to go beyond simple use cases. In the coming months and years, the apps we will build on top of it will become increasingly more sophisticated. 

Furthermore, the impact of data sharing will soon extend into all financial markets and unlock a host of new financial products. In the coming 12 months, we will see the mortgage, pension and insurance markets all joining the Open Banking revolution to create a truly sophisticated financial ecosystem. It ought to pave the way for more personalised, responsive banking experiences. 

Breaking down international barriers

Last but certainly not least, 2021 will see a further dissolution of international barriers. New methods for people to pay their bills and make purchases cross-border will be among the key priorities for banks and fintech vendors. The ability to transfer funds easily, without the requirement to switch accounts in order to do so, is one example of the kind of innovations that we are sure to see more of. Such solutions will serve to significantly reduce the fees and the time it takes to make cross-border payments. 

2020 has been very difficult for many people and businesses. Despite the challenges, however, the fintech sector is looking to enter 2021 in a position of strength as developments are accelerated and new trends come to the fore. No doubt, the coming months will require a lot of thoughtful responsibility from fintech, as it will be one of the key factors to bringing stability into the “new normal” and setting the economy back on track. 

Ammar Akhtar is the co-founder and CEO of Yobota, a London-based technology company. Founded in 2016, Yobota has built a fast, flexible, cloud-native core banking platform, which allows clients to create and run innovative financial products.

Share article

Jun 24, 2021

Islamic fintech Wahed plans UK expansion: Hires expert GM

wahed
islamicfinance
Fintech
Sharia
4 min
The world’s leading Islamic fintech company has hired top industry expert Umer Suleman to oversee Wahed Inc’s UK-wide expansion plans

Wahed Inc has hired a leading industry expert to take Islamic finance forward in the UK marketplace. 

Umer Suleman has been appointed as General Manager of UK operations for Wahed Inc.. His role will include overseeing Wahed Invest’s nationwide growth strategy and strengthening the firm’s position as a leading provider of ethically focused investment services. 

Suleman’s track record includes over 15 years of regulatory, risk, and strategy consultancy roles, as well as advisory positions across a variety of businesses and sectors including positions at UKIFC, Daiwa Capital Management, and Ernst & Young (EY).

He also spent seven years at HSBC as Head of KYC Risk globally within their Global Banking and Markets business, Head of Business and Conduct Risk for MENA within Retail Banking, and headed up the CCO function for Digital (GLCM) within the UK with a global remit.

Wahed and the growing role of Islamic finance

The startup fintech was founded in 2017 and is an American company based in New York City. Since its inception,  it has grown from strength to strength and in July 2019, launched the first exchange-traded fund in the US that was compliant with Sharia law. 

Islamic finance typically refers to the way businesses and individuals raise capital in accordance with Sharia, or Islamic law. It also refers to the types of investments that are permissible under Islam. 

Wahed currently operates in 130 countries and has offices in Washington D.C, New York, London and Dubai. It has also developed an easily accessible digital platform that balances ethical finance with modern investments, attracting over 200,000 active clients from around the world with features such as free portfolio recommendations and no hidden fees.

Wahed UK expansion plans

According to reports, the UK is highly receptive to services in the Islamic finance sector and is also one of the fastest-growing markets globally.  It has a three million-strong Muslim population and one of the most developed Islamic finance sectors outside of the traditional Muslim regions, with global population figures projected to double over the next forty years. 

It is hoped Suleman’s leadership of Wahed will address the underbanked needs of the Muslim community while also serving the increasing number of retail investors currently seeking ethical alternatives to wealth creation. 

Speaking about the new role, Wahed CEO, Junaid Wahedna, explained  “Mr. Suleman’s appointment reaffirms our commitment to providing innovative and outstanding ethically driven financial services to a market that, historically, has been underserved.

“We’re delighted to welcome Umer to the team and firmly believe that with him at the helm, our operations in the UK will continue to go from strength to strength and provide customers seeking ethical investments with accessible, trustworthy and innovative solutions.”

The appointment follows on from Wahed’s recent investment round and its acquisition of the UK-based fintech Niyah.

These events will support the company in its plans to build an Islamic marketplace that meets growing demand for socially conscious investors – and not just those of Islamic faith. 

The fintech firm also plans to utilise the UK’s position as a leading hub for Islamic finance as a springboard into other European cities, and believes it has a central role to play in providing Shariah-compliant services that address inclusion and inequality.

The Islamic finance industry is currently valued at around US$2.4trn and is expected to grow steadily by 10-12% over 2021 and 2022, having experienced rapid growth in recent years.

THREE reasons why Islamic finance is a growing sector

  1. The UK Muslim population is growing - and has been traditionally underserved by incumbent banks. The Muslim population is growing twice as fast the world’s non-Muslim population and Islamic finance address this group’s needfor  Shariah compliant financial products.
  2. It encourages financial inclusion. According to the World Bank, financial inclusion is defined as individuals and businesses having access to useful and affordable financial products and services that meet their needs – transactions, payments, savings, credit and insurance – delivered in a responsible and sustainable way.
  3. It supports Sharia compliant products. Transactions that work with industries forbidden in Islam (gambling, usury and speculation) are forbidden. Islamic banking only works with businesses that adhere to their ethical and moral standards.

 

Image credit: Wahed Inc team

 

Share article