Money transfer company LuLu Financial Group has teamed up with Abu Dhabi-based digital lender Wio Bank to allow its corporate customers to make cash deposits through the exchange's network of 89 branches.
The partnership diversifies the scope of financial services provided by LuLu Exchange, allowing it to embed banking services to transform its network as an enablement centre for financial institutions, the company said on Tuesday.
The move comes as UAE exchange houses increasingly partner with FinTechs to cater to a bigger pool of customers and expand their business offerings since the Covid-19 pandemic.
The collaboration with Wio will establish a “phygital” experience for customers in the UAE, said Adeeb Ahamed, managing director of LuLu Financial Group.
"As early adopters of open banking, our enablement platform now equips us to partner seamlessly with financial institutions that want to design hyper-local customer experiences," Mr Ahamed said.
“Our partnership with Wio is a real-world use case of how our FinTech capabilities, combined with our network, can better serve customers across the financial ecosystem.”
Open banking is one of the technologies that lenders have embraced to revolutionise the traditional banking model and boost bottom lines. It allows banks to share customer data, such as transaction history and spending patterns, with regulated third-party providers — with the account holder’s consent.
Third-party FinTech platforms point customers to financial services and products that are tailored by analysing their spending habits.
The global open banking industry is forecast to reach $43.15 billion by 2026 at a compound annual growth rate of 24.4 per cent, according to Allied Market Research.
LuLu Exchange has activated a cash deposit service in the first phase of its partnership with Wio, with cash withdrawals set to be launched soon.
Wio Bank launched operations in the UAE last month, with plans to focus on small and medium enterprises in its first year. It will expand its operations to retail clientele next year to become a full-service digital bank.
With a total invested capital of Dh2.3bn ($626 million), Wio Bank is jointly owned by Abu Dhabi holding company ADQ, Alpha Dhabi Holding, telecoms operator e& (formerly known as Etisalat) and First Abu Dhabi Bank, the UAE’s largest lender by assets.
The lender’s app offers customers all banking services, including opening an account, making transfers, tracking expenses and saving money.
Wio Bank secured approval from the Central Bank of the UAE in February to start operations. Wio Business is the bank’s first digital app that enables freelancers and SMEs access to business banking services.
The digital lender will leverage Lulu Exchange’s network in the UAE to help Wio Business customers deposit and withdraw funds, said Prateek Vahie, chief commercial officer of Wio Bank.
“With this new provision, we expect to further improve access for customers and, in turn, transform the banking sector in the country,” he added.
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Meanwhile, LuLu Exchange aims to onboard more financial institutions on its open banking service platform to expand the “phygital” experience to retail and corporate customers, the company said.
The remittance company already caters to a substantial customer base of micro, small and medium enterprises that can benefit from such partnerships as it is a facilitator of the UAE’s Wage Protection System, it added.
Virtual banks explained
What is a virtual bank?
The Hong Kong Monetary Authority defines it as a bank that delivers services through the internet or other electronic channels instead of physical branches. That means not only facilitating payments but accepting deposits and making loans, just like traditional ones. Other terms used interchangeably include digital or digital-only banks or neobanks. By contrast, so-called digital wallets or e-wallets such as Apple Pay, PayPal or Google Pay usually serve as intermediaries between a consumer’s traditional account or credit card and a merchant, usually via a smartphone or computer.
What’s the draw in Asia?
Hundreds of millions of people under-served by traditional institutions, for one thing. In China, India and elsewhere, digital wallets such as Alipay, WeChat Pay and Paytm have already become ubiquitous, offering millions of people an easy way to store and spend their money via mobile phone. Indonesia, Vietnam and the Philippines are also among the world’s biggest under-banked countries; together they have almost half a billion people.
Is Hong Kong short of banks?
No, but the city is among the most cash-reliant major economies, leaving room for newcomers to disrupt the entrenched industry. Ant Financial, an Alibaba Group Holding affiliate that runs Alipay and MYBank, and Tencent Holdings, the company behind WeBank and WeChat Pay, are among the owners of the eight ventures licensed to create virtual banks in Hong Kong, with operations expected to start as early as the end of the year.
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if you go
The flights
The closest international airport to the TMB trail is Geneva (just over an hour’s drive from the French ski town of Chamonix where most people start and end the walk). Direct flights from the UAE to Geneva are available with Etihad and Emirates from about Dh2,790 including taxes.
The trek
The Tour du Mont Blanc takes about 10 to 14 days to complete if walked in its entirety, but by using the services of a tour operator such as Raw Travel, a shorter “highlights” version allows you to complete the best of the route in a week, from Dh6,750 per person. The trails are blocked by snow from about late October to early May. Most people walk in July and August, but be warned that trails are often uncomfortably busy at this time and it can be very hot. The prime months are June and September.
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