Dear banks, put aside the legacy and meet the fintechs where they are

An opinion piece by Hany Fekry, Group Managing Director - Processing Business, Network International

Some weeks ago, I was at a fintech conference chatting with the top management of a bank in East Africa when I noticed a young man lingering around our table, seeming to be waiting for one of us.

As I watched him, I was reminded of all the times I’d stood waiting on the sidelines just for a chance to meet one of the big players in the business for even just a minute to pitch them our company’s unique selling proposition.

Excusing myself for a moment, I walked over to the young man and asked if he was waiting to speak with me.

He said yes, but was honest in sharing that he – a fintech entrepreneur – was more interested in speaking to one of the bankers in our circle, and that he had traveled from a different city just for an opportunity to approach him.

I proceeded to tell the banking execs that I’d like to defer the rest of my meeting time to the startup founder because (and I speak from experience) a meeting like this could change his life.

Make no mistake, of course I would like to have kept talking with them. I’d likely even have negotiated a few extra million dollars’ worth in deals over that meeting. But as a business with more than 200 financial institution clients and a few hundred million dollars in revenue, I could also afford to help the new founder get a foot in the door.[1]

Because, we need fintechs to fill gaps in the market and, for all we know, this guy could be the next unicorn.

Supporting the next wave of unicorns

The global fintech market share across 48 fintech ‘unicorns’ – late-stage startups that are valued at over $1 billion and are either private or have gone through an IPO – was worth over $187 billion in 2019.[2]

And with the staggering pace of change in fintech, a 2022 Vantage Market Research report predicts that the global fintech market size will reach US$332.5 billion by the year 2028.[3]

The rise of numerous fintech startups also contributes to the growth of other sectors, ultimately fuelling the growth of our economies.

At Network International, we believe our role as an engine of the economy means we must be willing to forego short-term gains in order to support the growth of startups.

Building a fintech isn’t easy. The path to market is riddled with obstacles and we know that they simply cannot operate on their own, which is why we are investing millions of dollars to modernize and standardize our APIs to cope with the new era of fintechs, creating sandboxes for them, reducing on-boarding times, and removing cost barriers to help them start up their business and push revenues to a later stage so we can win together.

More importantly, successful startups bring innovative solutions to the market and supporting fintechs means supporting national visions across the region to become smart and innovation-driven economies.

It’s no coincidence that the UAE aims to be home to 20 unicorns by 2031 and I am certain that these will include a number of fintechs.[4]

Among the biggest fintech products is digital payments, which holds 25% of the fintech market globally.[5]

Fintech partnerships could become your biggest strength

As I recall the hurdles we had to jump over when we first started out building our fintech 25 years ago – a company that went from a humble local payments processor to listing on the London Stock Exchange (LSE) in 2019 with a valuation of $2.8 billion, becoming the largest-ever technology IPO from a Middle East and Africa-based firm globally and the largest tech company to list on LSE since 2015 – I urge traditional financial players to put aside their legacy pride and be bold enough to meet startups where they are today.[6]

Ultimately, it could very well be the innovation and agility of these fintechs that will enable you to showcase your strength.