Fintech solutions are rapidly improving, how we experience financial services and how quickly regional banks adopt new technology will ultimately define their legacy and market share.
In Kuwait, strong digital infrastructure and an entrepreneurial mindset have positioned the nation as a high-potential incubator for fintech.
Fahad AlSharekh, Founder of TechInvest, a VC and Private Equity firm based in Kuwait City, spoke with us about Kuwait’s inherent fintech advantages, including the fact that Kuwait offers the “cheapest 5G in the world.”
AlSharekh’s father founded Sakhr Software, which put out the world’s first Arabic operating system in 1982.
Today, Kuwait can still be a place of tech visionaries, he concedes, if the market adapts to the needs of its up-and-coming tech savvy generation.
Simply put: The future of banking, AlSharekh says, is in the app. “If the mobile app is not 30% of business, the bank will be obsolete soon,” AlSharekh asserts.
Going forward, the COVID-19 pandemic has turbocharged many trends in fintech, opening up digital challenges for regional banks. “
Over the next five years, SMEs and startups are going to be acquiring business loans through mobile apps,” AlSharekh observes.
“We need these micro-financing solutions — including small business loans for $200 or $500.”
FinFirst has also anticipated this demand, which is why our mobile app has been specifically designed to better enable easy applications for SME business loans.
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In Kuwait, the tech market has long been developed due to the entrepreneurial nature of Kuwaitis and the fact that it’s a free market; we have three telcos and five other ISP providers. On top of that, we’re generally early adopters. With a lot of the apps that blow up such as Snapchat, Twitter, WhatsApp and more — the growth in Kuwait is always first.
My father founded Sakhr Software in 1981, so Kuwaitis have been thinking about the tech space for a while. We developed the first Arabic operating system for MSX computers, which was pre-DOS Windows.
Fast forward to 2020, it’s now 40 years later and the market has matured in a way where you have a lot of potential customers who are willing to adopt the latest fintech.
In finance, the banks are pretty advanced with offering online services. This has helped a lot of young people who come back from college and find similar services available to them here compared with what they have used from banks in North America or Europe.
Look, the big banks are going to be made obsolete if they don’t jump on the bandwagon quickly and start transferring their business from branches and corporate offices into the app.
If you are still counting on people to show up to your branch, you’re definitely not realizing that someone took your lunch. I don’t think this is Baby Boomer stuff.
A platform that builds collaboration between banks will enable each bank to be more customer centric. Instead of putting their brand first, they’ll be putting their service first.
The best way for banks to fast track their transformation into the digital online world is to acquire or join forces with an aggregating platform that’s already out there. Finding a company that’s done all the technical work, research and development will save them a lot of time.
Old brands really are going to be irrelevant going forward. Big established brands have disappeared overnight. No one cares about the old brands except the Baby Boomers.
But for the new generation technologies like augmented reality are the future, and they want a certain service to match that is efficient, productive and user friendly.
Over the past 10 years, most of the new tech has come from young people that are more in touch with the digital world.
Just looking at credit cards in the U.S. now, you have companies like Brex. They’re backers are all the big companies; they are betting on the new guys, not their guys.
“The only way for banks to survive is to invest directly in the current fintech leaders”
Let’s say that during the pandemic somebody had a business idea about how to solve a problem. However, that startup idea requires financing. You wouldn’t be able to acquire that funding because the banks were closed. However, if the world of microlending and financing was alive online, nothing would stop anybody, right? The economy would continue and the business could still be launched.
Over the next five years, SMEs and startups are going to be acquiring business loans through mobile apps.
Regional banks really need to get into microlending and online banking to finance these growing companies.
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