Fintech visionaries will descend on the Saudi Arabian capital of Riyadh on 5 to 6 December as the World Fintech Show puts the spotlight on the Kingdom’s thriving fintech ecosystem.
The event will connect global fintech innovators with enterprises, investors, policymakers, government authorities, and collaborators to redefine and re-energise financial services by adopting the most impactful technologies.
Wanting to understand more about the significance of this event, and in turn, why the Kingdom of Saudi Arabia’s (KSA’s) fintech ecosystem is so exciting, The Fintech Times sat down with Abe Karar, chief product officer at Fintech Galaxy, and moderator and speaker at The World Fintech Show.
Having previously worked for global financial organisations such as Bank of America, JP Morgan Chase and Bank of Montreal, Karar has over 17 years of experience in the financial industry, across data analytics, digital transformation and open banking/open finance.
Having shifted his focus to financial technology, he now works for Fintech Galaxy, a global platform that fuels innovation in financial services, drives ecosystem collaboration, and facilitates open banking and open finance API integration between financial institutions and fintech companies.
Tell us about Fintech Galaxy
Fintech Galaxy was founded five years ago with a mission to move the needle on financial inclusion through open innovation and open finance. Our core mandate is to drive open innovation in financial services within the MENA region. We provide a secure, reliable, and developer-friendly open banking and open finance infrastructure that facilitates seamless integration between financial institutions and fintech, driving collaboration and developing use cases that deliver value for businesses and end consumers.
I am the chief product officer at Fintech Galaxy, responsible for the design and development of our FINX open finance platform. FINX provides two key offerings: FINX Connect, which is our open finance aggregation platform, and FINX Comply, which is our open finance compliance suite.
We work very closely with clients such as financial institutions, fintechs, and regulators, so I do a lot of direct consulting them in order to facilitate the adoption of open finance and open banking in the region, and to really drive the open innovation agenda across the stakeholders.
Fintech Galaxy recently became the first central bank-regulated open finance platform in the MENA region. Why was it important to be granted the AISP licence and what can we expect now from the company?
This is a huge milestone since there aren’t any other central bank-regulated open finance companies in the region. We worked very closely with the Central Bank of Bahrain to understand some of the Bahraini market’s key needs beyond open banking, which is one of the key facilitators for this success.
Being a licenced, open finance entity allows us to focus on creating broader use cases that deliver more integrated value for businesses and consumers. As a licensed account information service provider (AISP) with an open finance scope, we’re using the fundamental capabilities and flows of data APIs derived from open banking but extending it beyond payment accounts: the traditional scope of open banking.
We want to introduce other mortgages, loans, pensions, insurance, investments, etc. This is just the initial step in terms of what we want to achieve with this type of license. Then comes the use cases that exploit the expanded value of open finance. We also plan on becoming a licensed PISP, a payment initiation service provider, to bring the movement of money into the use cases, and avail more integrated journeys that combine data APIs, payment APIs, and action APIs: Banking-as-a-Service (BaaS).
I would say you can expect Fintech Galaxy to bring new high-quality, safe, secure and scalable technical capabilities that accelerate the deployment of innovative and value-added use cases across a wider gamut of financial products and services for retail consumers and businesses. I know it will be a long and exciting journey, and I’m sure that we will be celebrating along the journey as we unlock the full potential of open finance in the region.
What are some of the hot topics you are looking forward to at the World Fintech Show?
As a speaker, I am really looking forward to discussing how we’re moving from open banking today to open finance tomorrow, and how we could leverage this type of phenomenon to provide access to responsible credit, making more informed decisions regarding the use and management of money, and, of course, moving from cash-based transactions to digital transactions.
I am very much looking forward to the World Fintech Show because it’s one of the main events happening in KSA that attracts many industry leaders and practitioners to share knowledge, experience and views on recent trends. We are seeing KSA become the leading innovation hub and a new northern star when it comes to open banking in the region.
I know that there will be a lot of interesting discussions around moving towards a cashless society, embedded finance, decentralised finance, and, of course, open banking and how SAMA is going about its implementation; on that note, I do want to say kudos to SAMA for taking a very structured and collaborative approach to bringing open banking to the Kingdom.
Why is this such an important date on your calendar? What is the significance of the event?
We at Fintech Galaxy are very optimistic about the Saudi market, and we take every opportunity to share our experience and knowledge at these events. Recently, for example, we had three contributions to Seamless KSA: myself and two of my other colleagues.
We feel that Saudi is one of the most fertile grounds for innovation, advancements in digital infrastructure, strong talent, adoption of digital technologies, and a strong-visioned government focused on transforming the ecosystem with its FSDP, financial sector development program, and ultimately transforming the Kingdom under Vision 2030.
In fact, on that last note, one of the focus areas that the Kingdom’s FSDP tackles, which is quite near and dear to our hearts at Fintech Galaxy, is financial inclusion. Our mission at Fintech Galaxy is to reimagine the future of inclusive financial services, with the key word here being “inclusive.” However, our experience has taught us that typical approaches don’t really yield the expected outcomes. Hence, we started to focus more on adopting learnings from financial citizenship to tackle gaps in financial literacy and financial inclusion.
This event is about contributing knowledge and expertise, meeting various stakeholders in the ecosystem, and identifying opportunities to collaborate with and support them, whether SAMA, Saudi payments, financial institutions, fintechs or others. We know that the number of ecosystem players in KSA has been growing significantly year over year.
By offering our knowledge and expertise, in combination with our regional open finance platform, FINX, we believe we can help the ecosystem by abstracting technical complexities, facilitating seamless and secure integration with financial institutions in the Kingdom and beyond, allow fintechs to deliver on SAMA use cases efficiently, scale their offerings in other markets quickly, and create value for consumers and businesses.
We feel very strongly about the direction the Kingdom is going, and contributing to these events
is one of the ways we show our bullish support.
What is financial citizenship?
Originating in Latin America, financial citizenship is about providing individuals with the proper financial knowledge and competency, helping them feel more empowered and entitled to the appropriate financial products and services they need that were initially out of reach. It is every human’s right to have the right level of education on the details.
The concept of “citizenship” here is derived from some of the core characteristics of “citizens,” being justice-oriented, personally responsible, and participatory. Therefore, each individual’s perspective can impact his/her financial life. This is pivotal for financial citizenship.
It’s no longer about the underbanked or the unbanked being in a position of weakness. They are now citizens, and as such, they are empowered with the knowledge, and are entitled to pursue the products and services that they need, to access better credit facilities, to buy a home, to grow their businesses, to afford better education for their children, etc.
It’s a very interesting phenomenon, and I recommend that readers look into Brazil and its implementation of open finance, especially how it structured its financial citizenship program around three key pillars: financial education, financial inclusion, and financial protection. It’s one of those markets that has opened my eyes with its bold achievements and best practices that we can learn from for the MENA region.
What are you looking forward to in 2023?
Financial citizenship is at the top of my list, as the MENA region has high rates of unbanked and underbanked across both consumer and business segments, particularly within the Arab countries. So taking the financial citizenship play over the traditional financial inclusion angle will create a wave of awareness and empowerment for individuals and businesses to go out and get the help they need.
Another fascinating area that I hope we’ll see more of in 2023 is the concept of “integrated” use cases that combines open banking, open finance, and BaaS to augment, extend and enhance base AIS and PIS use cases or even introduce new innovative use cases that solve real-life challenges more holistically.
I am also very much looking forward to seeing how the various markets will approach VRPs (variable recurring payments) and the different use cases that will be deployed and commercialised. VRPs are considered by many as the most significant step forward for open banking, and it will have a substantial impact on the future of payments.
VRPs allow customers to safely connect authorised PISPs to their bank account to make a series of flexible payments on their behalf, within agreed parameters, while removing the need for strong customer authentication for every payment, offering more control and transparency, and enabling sweeping (i.e., automatic movement of money between accounts). This form of payment is an innovation that can result in a myriad of value-added use cases, and it will definitely be on my radar for next year.
And finally, I’m excited about the potential for how open banking and open finance will facilitate and accelerate cross-border collaboration, opening up incredible new opportunities to better serve consumers and businesses who need to manage their finances, including account aggregation and money movement, across financial institutions in different jurisdictions seamlessly and securely.