Shift to digital currencies is coming: DIFC Fintech Hive wants to be at the centre

Raja Al Mazrouei is the executive vice president of the DIFC Fintech Hive, and she has also been elected onto the board of the newly minted Dubai Chamber of Digital Economy.

In an exclusive interview, she talks with Arabian Business about cryptocurrencies, what’s next for digital coins and the work DIFC is doing to empower an ecosystem of fintech start-ups.

AB: Crypto always has our audience super engaged, so where do you stand on it? Are you bull or bear on its potential as a form of currency, or should it just be a store of value?

Al Mazrouei: I was offered to buy bitcoin back in 2014 at $200. And guess what? I didn’t buy it. I work in the financial centre, and the financial services executives said: “Forget it. It’s a waste of your money, it will disappear.”

I believe in digital, but not so much in crypto. And this is why I have recently written an article about central bank digital currencies (CBDCs). I believe digital is the future for the currency, however [it must be] a regulated and protected kind of currency, which would be issued by central banks.

We’ve seen lots of central banks in different countries and jurisdictions experimenting with the technology, because they know and they believe that it is going to disrupt the way the financial systems work today.

Crypto is very volatile, because it’s not pegged to any assets. But central bank digital currencies are going to be in the future. The public and consumers will trust them because they’re issued by a government-backed entity that guarantees its availability.

That volatility is what works for the brokers. Bitcoin, or cryptocurrency, is not a long-time investment. I think it’s like a hype that you’re just in for the thrill of it. But you need to exit, you can’t keep all your investments there because it could burst one day, just like the Dotcom bubble.

But the regulation will be there to stop it, because we know all the issues that are attached to the cryptocurrency and governments are working to protect the consumers from those issues.

Bitcoin, or cryptocurrency, is not a long-time investment.

AB: You’ve been writing lately about CBDCs, a digital form of traditional currency. Is your view of these much more confident, is it inevitable that one day we’ll all be using digital currency?

Al Mazrouei: Absolutely, like gold and silver coins disappeared a while ago, this will disappear for sure. And we will shift to completely digital.

AB: You could make the argument that many of us are already using digital payments, paying with our faces etc – so where does fintech go next, what is exciting you most?

Al Mazrouei: We will not have to go to any middleman to get any transaction done. Most of the financial institutions, which are playing the role of the broker, or the middleman, their roles will be disrupted, and we will be able to access the service directly from the provider at a much faster pace and for lower fees.

AB: So give us your helicopter view of the DIFC Fintech Hive, what is it, where are you based, what’s the mission and how are you doing?

Al Mazrouei: The fintech hive was launched back in 2017, as the DIFC was looking at the future of finance as a strategy and as a leading financial hub. We looked at the opportunities of transformation and disruption for our key clients, which are financial services institutions.

Technology was a very evident contributor to that transformation, and we set up the fintech hive at that time, because we wanted the financial institutions to understand that technology is coming.

DIFC Fintech Hive was launched back in 2017.

We wanted those institutions to leverage on the size and speed of these start-ups to be able to integrate all of that information, or maybe collaborate with these solutions to provide competitive services to their clients.

And since 2017, we have accelerated more than 100 fintech start-ups through our different programs. These start-ups have raised collectively around AED1 billion today. We’ve launched more than 50 products in the UAE market through the fintech hub.

AB: Fintech is possibility one of the hottest investment areas globally right now, where is Dubai in that mix in terms of its status as a hub?

Al Mazrouei: If you look at the region, there are multiple fintech hubs that have been established and they’re all working together towards enabling start-ups to benefit from the regulatory framework, access to investment funds, and access to business opportunities.

The way Dubai does this by building an ecosystem to support that. We’ve really removed most of the barriers of entry and enabled those start-ups to experiment.

Even if they fail, it doesn’t cost them so much to fail, and they start again and validate those technology solutions with their peers in the market.

AB: Is this the most exciting time to be starting out on your own? And with the old statistic that only one in 10 start-ups will succeed, what are your golden rules for entrepreneurs?

Al Mazrouei: They really need to validate the idea or the solution that they are providing – you can’t provide a solution that nobody is going to use. Make sure that you do the right research on the market demographics. If it doesn’t save anyone time or money, it will not make the profits that will make it scalable and sustainable.

AB: How do you feel about the opportunities right now in Dubai for fintech start-ups and businesses?

Al Mazrouei: It’s really like the gold rush. It’s so easy to grab these opportunities, especially in the UAE, looking at the 50-year plans that has been announced.

DIFC Fintech Hive launched more than 50 products in the UAE market through the fintech hub.

The opportunities are massive. And now with all these special visas and residency conditions that have been introduced to retain the talent, I think it makes it much easier for start-ups to do it here.

If you look at all the accelerator programs that are offered, you really can set up something at no cost, and once that’s validated, access investment.

AB: Are you seeing a lot more people are saying: “You know, I worked for the man 9am to 5pm, five days a week, for 10 to 20 years. Now, I want to be my own boss”?

Al Mazrouei: We’ve seen that and it’s evident in the number of start-ups that have grown to become unicorns out of Dubai.

The fintech hive and innovation hub is really filled with individuals who have left their day jobs, traditionally, mainly in financial institutions, and paired with the co-founders and started setting up their own fintechs.

AB: What’s been the secret to your success, and what mistakes have you made along the way? What would you tell Raja back in 2007 if you could?

Al Mazrouei: If I would give myself one [piece of] advice, it’d be that it’s okay to ask questions and that it would actually accelerate my learning process. Back then I wasn’t as confident or as open to asking questions, I thought it would reflect as a weakness.

But today when I don’t understand something, I go and ask questions and I get the answer and it’s much faster than figuring it out on my own.

Raja Al Mazrouei.

I believe in mentorship that really accelerates the experience of young individuals within the workforce. If I have to relive all my experiences to get where I am today, it will take me a very long time, but if I can share this through mentorship with aspiring talent, it’s a shortcut.

AB: On Arabian Business we reported how Majid Al Futtaim were looking to train 5,000 female coders. How big of an impact will this make, is it a big step forward or just one of many needed?

Al Mazrouei: So much needs to be done. There’s a lot that is going on to enable women, or even youth, to access technical and coding skills, because that’s the future. Technology is here to stay; we’re shifting from physical to digital as much as possible.

We need to grow this talent organically from the region and [Majid Al Futtaim’s programme] is a much needed initiative. I am sure we will see many more now, especially with that announcement of the recent projects.

AB: As a father of a young daughter, I believe that success should have nothing to do with chromosomes. In the tech sector what do you believe the ROI is on basically doing the right thing and encouraging female talent?

Al Mazrouei: If you look at the gender balance you are bringing a proper balance to the table because both genders think differently.

You are also enabling the economy and by enabling the economy you’re enabling purchasing power, and you’re enabling more individuals to access those talents.

There’s been a lot of research done on start-ups that are co-founded by women that are generating higher returns.

On top of that you are leveraging on the detail, orientation and focus that females in general have more of compared to their [male] counterparts.

There’s been a lot of research done on start-ups that are co-founded by women that are generating higher returns. It’s not really about male or female, it’s all about balance, balancing both sides to make sure that you are contributing equally to the benefit of the organisation and the community.

AB: You’ve recently been invited onto the board of the Dubai Chamber of the Digital Economy, what do you want the legacy of your work there to be?

Al Mazrouei: Enabling access to e-commerce to any single individual that could provide their services from home from anywhere in the world using or leveraging a device network would be a great achievement.

We know today that there are lots of regulations and restrictions or guidelines to set up a business in the UAE. If we look at the UAE in general and Dubai in particular, if we are able to bring all of this online and enable a lady who is sitting in Ajman to provide her services online, open a bank account, get the commercial license, provide the services, and receive the feedback through a seamless digital experience – this will be an ultimate objective for me to really look forward to see happening in the very near future.