The move comes as the Emirates looks to shift to a cashless economy by adopting digital wallets and mobile payments.
Dubai Holdings’ digital bank will also serve the SMEs and mid-size corporate segment, saying that it will work towards addressing issues such as transparent reporting across all SME accounts, cash management platform linked to receivables, payroll and payments.
The lender’s first products are expected to debut in 2019.
Banks in the U.A.E. have invested massively in digitization drives in order to stay relevant with the customers.
In 2016, Commercial Bank of Dubai launched CBD Now, a digital only bank, to pander to millennials who are increasingly tech savvy. Another seasoned lender Mashreq launched Mashreq Neo in a bid to cut down its branches and appeal to a digitally savvy local population. Meanwhile Emirates NBD said that it has set apart AED 1 billion for its digital transformation.
Lenders in the U.A.E. are increasingly finding it hard to remain unaffected by the wave of digital transformation. A report by research firm Al Masah Capital indicated that the U.A.E. banks are at the forefront of adopting digital solutions. Such readiness to adopt the latest technologies have attracted a number of fintech firms too.
According to State of Fintech report, the number of fintech startups in the MENA region increased from 46 in 2013 to 105 in 2015. This number is expected to more than double to 250 by 2020.
Investment firm Dubai Holdings said that it planned to invest close to $270 million over the next five years to form a digital bank in the U.A.E. The new bank will be later expanded to the Middle East and North Africa.
https://www.forbesmiddleeast.com/en/dubai-holdings-reveals-plans-for-new-270-million-digital-bank/
