Empowering economies: e& and the fintech revolution

According to a McKinsey report from 2023, MENAP fintech revenue is expected to nearly triple by 2025, reaching USD 3.5-4.5 billion. This upswing is fuelled by a young, tech-savvy population, a growing digital economy, and supportive government regulations. The region is also witnessing a rise in fintech hubs, with Dubai International Financial Centre (DIFC) being a prime example, attracting global players and fostering innovation within the MENAP fintech space.

Across the region, e& is leading the charge in this fintech revolution. The global technology and investment powerhouse empowers customers in both sophisticated and underserved territories to reap the rewards of the digital age with easily accessible financial services delivered through smartphone apps and challenger banks.

“In the Middle East, digital consumer behaviour has evolved rapidly, driven by high mobile adoption, increasing online activities, and shifting consumer preferences towards digital platforms,” says Khalifa Al Shamsi, CEO of e& life and Acting CEO of e& international. “Our priority is to empower every customer with the necessary tools and opportunities to access the digital economy.”

Empowering communities with digital payments

Before fintech solutions like e&’s financial super-app, Wio Bank, and Careem Everything App emerged, financial options for underserved populations were significantly less and a barrier to growth.

“In many of our markets, banks are often scarce, especially in rural areas, making it difficult and expensive to open accounts and process payments,” Al Shamsi explains. “When people live in remote areas, they’re highly dependent on cash, which brings its own costs and inefficiencies such as security risks, transportation expenses, and the inconvenience of managing large amounts of physical money.”

Fintech solutions like e&’s mobile payment and digital wallet options are significantly reducing these costs by offering low transaction fees and more convenient, on-demand payment methods. They also reduce the reliance on physical cash by providing a secure digital payment platform. The Careem Everything App is rapidly expanding its fintech features, with payments and remittances growing at an unprecedented rate. Careem has grown digital remittances by 283 per cent compared to the previous quarter. It operates across 74 cities in the MENA and is one of the region’s most prominent consumer digital brands.

e& life’s fintech arm, e& money, has established itself as a major player in the UAE’s financial landscape – with over 1.1 million subscribers, it is the country’s most-used fintech app based on monthly active users. This rapid growth is further bolstered by the issuance of more than half a million exclusive prepaid cards in collaboration with Mastercard, offering users a convenient payment solution.

“e& money is the first card issuer in the UAE supported by a telecom operator. Launched in early 2023, we’ve issued over half a million cards. Our programme stands out with a competitive one per cent cashback reward on purchases, a benefit usually reserved for credit cards,” Al Shamsi says.

Highlighting its regional dominance, e& money has seen a staggering six-fold increase in international money transfer volume, alongside expanding its remittance services to over 200 countries. This solidifies its position as a major player in the fast-growing fintech scene.

e& money has partnered with Samsung, Apple, and Google to enable secure, contactless payments via their wallets, enhancing convenience for UAE residents shopping online and in stores globally. These collaborations aim to integrate flexible mobile payment solutions seamlessly.

Additionally, e& money users can transfer funds between wallets in countries where e& operates, such as Etisalat Cash in Egypt, UPaisa in Pakistan, mHawala in Afghanistan, Mobily in KSA, and MT Cash in Morocco.

Establishing partnerships with commercial banks can empower fintechs to provide a broader spectrum of financial services, encompassing lending, investment opportunities, and customised products. Such alliances enable smoother regulatory compliance and expedite market entry, driving greater accessibility and financial inclusion.

Al Shamsi says fintech’s agility and innovation-driven approach, blended with the scale, regulatory expertise, and reach of established banks, offers significant scope for collaborations, especially in developing innovative financial services that cater to underserved or unbanked populations.

“Strategic partnerships forged between fintechs, financial institutions, and regulatory bodies in different countries can leverage local expertise, navigate regulatory hurdles, and build trust within communities. Mobile networks, banks, and fintechs have formed powerful partnerships to drive financial inclusion by leveraging each other’s strengths.”

In Egypt, e& enables access to mobile wallets, which is estimated to financially include more than six million customers with affordable and safe payment methods by 2025.

In Pakistan, it provides card issuance capabilities to accelerate the shift from cash to digital payments. “This is not limited to card issuance; we are facilitating online payments for e& operating countries like KSA, Egypt, and Pakistan, thus enabling millions of customers to pay their bills and more online,” Al Shamsi says.

In Pakistan, where an estimated 70 per cent of its 240 million people lack access to formal financial services due to various socio-economic barriers, e&’s microfinance business, U Microfinance Bank (owned by PTCL, an e& subsidiary), is at the forefront of bridging the financial inclusion gap.

By offering secure, accessible, and affordable financial services like micro-loans and savings programmes, it empowers the underserved and unbanked population and directly supports Pakistan’s National Financial Inclusion Strategy, which aims to bring half the country’s adult population into the banking system.

“Our fintech services help resolve meaningful problems for the large unbanked population in Pakistan. With U Bank, we’ve increased financial inclusion across rural and urban Pakistan through branch and branchless (U Paisa) solutions and agent networks. We strive to do more to achieve Pakistan’s financial inclusion goals and address the need for microfinance.”

In Egypt, e& and The Sovereign Fund of Egypt (TSFE) launched Erada Microfinance to provide MSMEs with access to a wide range of financial services. The partnership aligns with Egypt’s Vision 2030 of supporting financial inclusion and creating opportunities for the youth by providing innovative financial services and digitally-enabled lending products.

By leveraging digital technologies, Erada streamlines loan application processes disburses funds digitally and facilitates repayments for underbanked Egyptians. So far, in just over 12 months of commercial operations, Erada has served more than 25,000 clients and approved over EGP 750 million in loans.

This strong foundation isn’t just about fintech solutions. The key is the extensive network and infrastructure that e& has built. This vast reach enables e& to connect with a massive customer base, creating a powerful springboard for its financial inclusion ambitions.

Telco/tech-co crossovers can cross borders

e&’s core telecommunications business and its expansive customer real estate give it an advantage for optimising its fintech solutions. Telecom data can provide valuable consumer insights, and by leveraging this data in conjunction with advanced analytics and machine learning algorithms, e& can develop innovative financial products tailored to the needs of its customers.

“We already have the necessary infrastructure to support digital payments, including networks, payment gateways, and customer service capabilities. This existing infrastructure gives us a competitive edge in the fintech space, enabling us to offer comprehensive financial services seamlessly,” says Al Shamsi. “Our vast customer bases spread over various territories give us a unique understanding of different consumers’ financial behaviour, enabling us to customise and optimise fintech solutions.”

In today’s global economy, seamless data movement is integral to economic growth and innovation, acting as a catalyst for technological progress, digital trade, and enhanced business efficiency. Cross-border data sharing continues to be one of the key components of digital transformation and an important factor in unlocking economic growth opportunities, and favourable regulations play a key role in this area.

MENA countries rank 1-3 on the Cross-Border Data Policy Index, reflecting a regulated yet supportive environment for cross-border data sharing in most cases. In MENA, the Algerian, Moroccan, and Tunisian economies are making progress in enabling cross-border data sharing and Al Shamsi believes similar initiatives can further drive and facilitate digital inclusion across the wider region.

This openness to data sharing, evident in the strong rankings of MENA countries on the Cross-Border Data Policy Index, is essential for AI’s success in the region’s financial sector. Large datasets fuel AI, and streamlined data exchange across borders unlocks the potential for AI-powered financial services to reach a wider audience.

Fintech and the AI angle

AI is revolutionising the fintech landscape, transforming everything from fraud detection to financial inclusion. By analysing vast amounts of data, AI streamlines processes, personalises services, and empowers institutions to make smarter decisions. Ultimately, this is making digital financial services faster, safer, and more accessible for everyone.

Gone are the days of frustrating branch visits and time-sensitive physical Know-Your-Customer (KYC) procedures. Thanks to AI, the entire process is now streamlined and accessible. Advanced AI-powered Optical Character Recognition (OCR) flawlessly scans documents, and real-time authentication against government databases ensures accuracy. This allows for remote KYC completion at any time, eliminating friction and inefficiency.

Al Shamsi highlights the precision and scalability of AI when applied to credit-scoring scenarios. “Our AI-driven credit scoring and fraud detection systems are streamlining financial services and introducing a new standard of precision and security that can scale across international markets,” he says.

e& money is planning on launching an AI-driven credit scoring system which broadens data inputs for instant loan approvals and improves precision, ensuring financial inclusivity and efficiency in lending.

Its KYC solution, enhanced through AI, offers a seamless, fully digital onboarding experience. It reduces processing time to two minutes, enhances security with real-time authentication, and is the fastest onboarding experience in the UAE.

e& money is also planning on launching an Automated Fraud Detection Solution that leverages AI for real-time analysis of transactional data. It will enable proactive identification and mitigation of fraudulent activities, enhancing platform trust and security. This shift goes beyond bolstering trust and security. By leveraging AI, the company can proactively identify and prevent fraud with real-time insights, marking a significant leap from traditional reactive methods.

The human purpose behind the tech

The primary value of financial inclusion is that it empowers individuals and businesses by providing access to essential financial services, thereby fostering economic growth, reducing poverty, and promoting social equality.

“No matter how fast and amazing technology is, it must always serve a human purpose, which is why we are constantly increasing the utility of our fintech platforms. When guided responsibly, innovations like AI will magnify our capabilities to an enormous degree. At e&, we know that it is essential for us as a company to keep up with the changes in the digital world and take the lead in driving them.”

The company focuses on executing ethically and responsibly. Long-term growth is always based on ways of working that consider the impact on customers and stakeholders beyond finance, such as avoiding bias and inappropriate usage.

The future of finance is inclusive

The rise of fintech in MENAP is about more than offering a sleek mobile app for payments. It’s a seismic shift in the very foundation of financial services. Traditionally, access to capital was limited due to the nature of the financial system, with established banks focusing on specific criteria. Fintech, with its agile and data-driven approach, complements these existing structures, offering new ways to expand financial inclusion for a wider audience.

Imagine millions of previously unbanked individuals in remote villages, now empowered to access credit, invest, and manage their finances from their smartphones. This decentralisation of finance breaks down barriers, fosters entrepreneurship, and injects vitality into stagnant economies.

The trajectory of e&’s fintech activities serves as an example of this evolving dynamic. By leveraging their telecom infrastructure and customer insights, they’re tailoring financial products to underserved communities. This benefits individuals and creates a data-rich ecosystem that can inform future financial products and services.

The future of finance in MENAP is about convenience, empowering individuals, unlocking economic growth, and rewriting the rules of financial inclusion. It’s a story of a region embracing innovation to create a more equitable and prosperous future, one digital transaction at a time.

Khalifa Al Shamsi is the CEO of e& life and Acting CEO of e& international