Past few months, we observed major power-plays in MENA. Big banking players celebrating tech platforms in (e-commerce & Fintech) partnerships, where the platform will become a financial product offering platform!

To the untrained eye, it looks like those bankers are throwing the towel. For those close to the banking sector, it looks like banking evolution (AKA: regulator’s pressure). For those who know, that’s banking channels & terminals 4.0!

A few actual examples to think about...

One bank increased its new cash deposits by 16%, of which 70% new-to-bank, without expanding its terminals network!

Another managed to increase its loan volumes by 11% plus establishing additional transaction revenues from new loans processing fees without printing a single piece of paper.

We all saw great announcements like Bank Misr and Talabat in Egypt where Talabat qualifies merchant for micro loans, and Bank Misr owns the financing, all done digitally. Bank Misr is establishing a new loan revenue stream all while decreasing CAC, especially that SMEs lending accounts for 27.5% of the total credit portfolio

One can only imagine how this move will put the SOHO and SME’s lending on steroids, or will it?

The Challenge

If you have tech problems, I feel bad for you, son

I’ve got 99% problems but the platform ain’t one!

While all announcements made are steps in the right direction, I always wonder why aren't banks scaling these partnerships and unlocking them for all? Why are we still celebrating 1-O-1 partnerships?

I mean in MENA we have +200 banks, +900 tech platforms (of which 500 Fintech’s) and more than +500k SME!

For skeptics out there, I understand “local culture” and “regulations” play a role but let's not forget that a one payment management app in Egypt (AKA: Fawry) became a benchmark for payment disruption in developing markets. UAE ride-hailing app (Careem) changed how MENA

commutes and even influenced global giants to adapt their ways of working, and both culture and regulations adapted to the disruption.

Conventional banking is under immense challenge; I think it comes down to two driving forces:

• Strategy & Culture: Back in the day expanding your geo-presence entailed opening new branches, today you just need to figure out: (a) what’s the most used app there. (b) how many pumps do I need in my storage.
• Your ecosystem has a bigger influence on your business outcomes. Will my bank expand to a point where all my payments are made using biometrics?

A Sounds expensive, not really... Remember a lot of phone users still pay more to Apple for status and “well-platformed” ecosystem. Despite Apple sourcing screens from Samsung and cameras from Sony, users gladly pay more to Apple.

Seamless Ecosystem Always Wins

Platformed ecosystem with big ROI isn’t just good tech, while a solid tech stack matters for sure, an ecosystem mandates interoperability between people, process, and Tech.

To help digest that idea I always reflect on Tesla. Despite being the newest car maker out there, they dominate Electronic Vehicle’s market share and it’s not for acceleration … it’s the ecosystem.

Tesla has its own charging network, they didn’t take the Carplay software shortcut, but sourced their own. So, unlike their competition, Tesla’s map factors your power usage, trip distance, and can self-drive to charging station.

Also, since EV’s are low on maintenance and call to Tesla service they come to your location and do the job while you go on with your day. You can even pay to unlock car performance boosters without changing cars... sounds familiar, yes they are doing to cars what Apple did to mobile phones!

Unlocking 'Banking as a Service' (BaaS) for financial institutions must have interoperability. Thinking about the celebrated partnership earlier, how can I register my Fintech with the Bank to offer same capability to my end users? Is there a free space to understand capability mandates and prerequisites? or do I need to know someone, who knows someone that can get me a meeting?

We have seen great success stories from those aiming to a BaaS ecosystem like;

• Permata Bank accessing new segments driving 5X increase in new accounts with transaction volume CAGR 274%
• Commerz Bank API marketplace usage surged from average of 2 mil requests/month to 10 mil per day and becoming the new revenue stream
• Accendo Banco (Mexico) witnessed 5X multiplication of annual transactions revenue between 2019 and 2020

Realizing a 25-30% growth in revenues or 15% increase in the customer base is now a realistic target. Leveraging your existing assets, transformative user-friendly experiences are the right source of monetization.

This allows for exponential growth in channels that don’t take long to grow & feel their impact.

Thinking about digital channels, you should be thinking big. Your platform must allow you to on-board +10 partners in 90 days or less otherwise you are risking speed which is an integral part of today's “now” economy and user behavior. With dynamic onboarding capability, you slash 60% of delivery time, we saw it happen so many times. Treat your partner as you treat your customers

Zero Customer Acquisition is live through successful partnerships. Banks accordingly deliver their value to new customers without any extra geographic widespread. Eco-system business model grows organically at zero extra resources.

MENA $5B+ untapped partnership opportunities through Banking-as-a-Service is only available digitally for those who can offer financial services in a Blinq.