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Exclusive: Global fintech Nium brings regulatory compliance, KYC, unique BaaS solutions to region

On October 5th, 2020 Nium, a global financial technology (fintech) platform, announced its expansion into the Middle East. This big-time company has its reasons and here we find out why

The MENA fintech market is estimated to reach a value of $2.5 bn Working with third-party BaaS providers can allow clients to bypass developmental complications Nium's end-to-end data encryption system safely transfers digital information between two parties

On October 5th, 2020 Nium, a global financial technology (fintech) platform, announced its expansion into the Middle East, with the appointment of Ayoub Jemail as its new General Manager, Business Development for the region.

AMEinfo was intrigued by Nium’s offerings and went ahead with an exclusive interview with Prajit Nanu, co-founder and CEO of Nium.

Follow the interview below for insights into banking as a service (BaaS) and the reasons behind the company’s continued forays into the region.

1. What is the reason behind Nium’s expansion into the Middle East?

“Fintech across the Middle East is set to grow at a compounded annual growth rate of 30% and expected to raise over $2 billion in venture capital funding by 2020.

With Fintech steadily growing across the region, we have extended our uniquely diversified payment infrastructure offering for large enterprises, as well as banks and financial institutions in the Middle East. Our expansion will help fintechs, banks and financial institutions digitize their solutions much faster, and, in turn, provide better digital financial service offerings to their customers.”

2. With the proliferation of fintech around the world, how does the Middle East’s landscape differ, if at all, from the rest of the world?

“The Middle East is emerging as one of the world’s most innovative markets, with many players disrupting the financial services industry through the provision of consumer-centric payments, e-commerce, banking, insurance, and wealth management. With the MENA fintech market estimated to reach a value of $2.5 bn, coupled with the launch of 5G later this year to help boost Internet speed and usage, there is tremendous room for growth regionally.”

Read: Abu Dhabi’s neobank project a virtual win for UAE’s digital natives

3. What are some of the main benefits for institutions utilizing and implementing BaaS?

“BaaS makes it much easier for anyone (including start-ups, fintech unicorns, multinational technology corporations, and banks to access and create simple, fast, secure, and transparent banking experiences. BaaS promise new revenue streams, expanded customer bases, and improved experiences across a wide range of banking and financial services including; account and transaction services, e-wallets, loan processing and even shoring up compliance and trust. The new world of banking is a plug-and-play model for banking services.

“However, while many look to become a FinTech or offer FinTech solutions, they may not have the existing technologies and capabilities to build and go live quickly enough before someone else does so. Working with third-party BaaS providers can allow clients to bypass much of these developmental complications. With an existing tech stack that you can just plug-and-play, Nium allows banks, other financial service providers, and even enterprises to anticipate demand and scale up or down as needed, customize product offering, and enter new markets. 

“A second challenge for businesses intent on providing financial services products is dealing with complicated regulation and compliance. Partnering with financial technology solution providers that have a large portfolio of licenses under their belt reduces the burden of this cumbersome process. Nium’s network is powered by a portfolio of licenses, hard-earned by building trust with financial regulators in nearly 40 countries.”

4. With remittances on the decline, what can the fintech industry do to assist businesses and customers alike?

“For incumbent players in the market, this new reality requires a new way of thinking to offer customers’ greater choice and improved services. For instance, we recently partnered with Mashreq Bank to offer instant and same-day credit facility to more than 30 countries across the world including the United Kingdom, Singapore, Philippines, Australia, Canada, Sri Lanka, and most European countries. The partnership aims at leveraging the immediate payment capability of recipient countries to deliver payments instantly.” 

Read: Cryptos are Gen Z’s, millennials’ favorites but is the US presidency spurring a Bitcoin boom?

5. The rise of Fintech replacing traditional financial services has heightened the need for better technology to manage risk. What does Nium bring to the table in this regard?

“The COVID-19 lockdowns have propelled e-payments further among consumers and business entities. Nium’s operations are bolstered with stringent security measures. Our onboarding procedure is streamlined to sift out dubious profiles and validate genuine applicants without compromising on their convenience. Even after the initial Know Your Customer (KYC) process, we continue to screen our database of users periodically to verify the authenticity of individuals on an ongoing basis, screening for anti-money laundering, financing of terrorism, and other crimes. 

“We adopt a comprehensive, risk-based approach to prevent malpractices by: 

a) Conducting essential checks with regulators’ lists to identify politically exposed persons (PEP), as well as cybercriminals and those barred for fraudulent activities such as money laundering. 

b) Employing a wide range of tracking tools that monitor suspicious behavior, such as irregular spikes in activity, usage of new email accounts or phone numbers for signups, unusual cross-border transactions, changing purchase patterns, etc.  Our end-to-end data encryption system safely transfers digital information between two parties, protecting your data from intermediates such as internet service providers and merchants whose systems it passes through. 

“Nium’s infrastructure also stores, manages, and processes data using a cloud-based system leading to secure storage, interoperability, and 24/7 uptime.”