History was made in the UAE last Sunday when the first independent digital banking platform in the United Arab Emirates was launched. This neobank aims to lead the digital banking innovation in Africa, South Asia, and the Middle East.
YAP, which is based in Dubai does not possess an independent banking license, instead, it has partnered with RAK Bank which has the job of providing YAP users with international account numbers. Users’ funds are secured under RAK Bank’s banking license.
Just like most neobanks that do not operate physical branches, YAP does not provide any traditional banking services like mortgages and loans, instead, it provides customers with budgeting and spending analytics, bill payments, remittance services, and peer-to-peer payments.
To expand their operations beyond the UAE, YAP has begun the process of partnering with other banks in other countries like Pakistan, Ghana, and Saudi Arabia, according to Katral-Nada Hassan, head of product.
Notable players in the digital banking sphere like Revolut, which is currently one of the best-known digital banking apps, have no presence in the UAE.
To cover the digital banking gap, some UAE banks have begun to launch their digital banking opportunities aimed at supporting the younger, digitally savvy generation. Some of these digital banking offerings include Mashreq Neo launched by Mashreq Bank and Liv, launched by Emirates NBD.
ADQ, an Abu Dhabi state-owned holding company, made public its plans to launch a neobank –which is yet unnamed- by utilizing the banking license of First Abu Dhabi Bank (FAB), the nation’s biggest lender.
According to Marwan Hachem, YAP’s CEO and founder, “The fintech revolution has become very popular in other parts of the world and we saw a gap and unique need for this service in the Middle East.”
Hassan believes that several challenges confront all fintech looking to get a foothold in the UAE.
She states; “There are a lot of fintech’s right now looking at partnering with banks, but that requires a lot of discussions, relationship building… it is not an easy thing to do,” she also said that YAP’s founders had a prior relationship with RAK Bank.
Hassan intimates that YAP is currently at the seed funding stage in its development. The neobank is being funded by private equity firms, private investors, and its founders. She also states that accounts with the neobank will be going live in the coming weeks with over 20,000 customers already pre-registered.
