By: Omnia Ahmed
Mubasher: Being the largest open banking infrastructure provider in the MENA region, Tarabut Gateway focuses on connecting banks, lenders, and fintech companies in various product segments.
Besides the UAE, the company's business covers more than 90% of Bahrain and over 60% of Saudi Arabia.
In an interview with Mubasher, Abdulla Almoayed, Founder and CEO of Tarabut Gateway, elaborated how the ecosystem in the MENA region, particularly Saudi Arabia, played an effective role in driving their growth.
Almoayed highlighted the needed regulations to scale their operations in the financial market and which markets they target to launch their business in.
The CEO also underlined the effects of the Metaverse and the current global recession on the fintech industry.
Tarabut Gateway witnessed a major boom since inception in December 2017 until now amid the fintech evolution across MENA. How do you perceive the growth process transition?
We have had a great opportunity, with three main drivers: progressive regulations in Saudi Arabia, Bahrain, and the UAE; a rapidly advancing fintech market; and strong consumer demand for digitised solutions in the financial sector.
Our rapid growth is a testament to the exceptional talent of our employees and invaluable regional customers and partners such as Visa, Qarar, and Tamam, to name a few. We also know the importance of in-depth knowledge about open banking and having best practices from the outset.
The ecosystem has played an important role in supporting our growth, and we are committed to reciprocating by supporting governments, banks, and fintechs in fostering innovation within the sector. With a dynamic, young, and digitally active consumer base in MENA, the high adoption rate presents an excellent opportunity for us to capitalise on and drive further success in the future.
Which markets in the MENA region would you target next, besides the UAE, Bahrain, and KSA?
We are open to any MENA jurisdiction with suitable regulations looking to join us in supporting open banking and following the path set by countries like Bahrain and Saudi Arabia. Security and compliance in our products are paramount, and in the realm of open banking, robust regulations are foundational requirements.
The regulations put in place to safeguard the sector are of utmost importance. These regulations not only create a level playing field for all participants but also instil confidence in both consumers and banks, encouraging adoption while mitigating the risk of misuse or fraud.
Finally, we monitor the region’s open banking regulations closely and move rapidly into new markets at the appropriate time. Our dedicated team works diligently to support banks in their compliance with open banking regulations, guiding them every step of the way as markets open up.
This steadfast commitment ensures that we are well-prepared to seize opportunities whenever any market unveils its regulatory framework for open banking.
Tarabut Gateway entered 2023 with robust partnerships and investments, including Rain and Visa. Could you brief us on the next growth plan?
Our strategy focuses on strengthening partnerships with banks, fintechs, and lenders - in Saudi Arabia in particular. A perfect example is Qarar, the technology arm of KSA’s first and largest credit bureau SIMAH. Our connectivity gives Qarar real-time access to financial data, enhancing its credit scoring and decision automation. This means quicker, more accurate credit decisions, and a more accessible, efficient, and inclusive financial sector.
We are prioritising Saudi Arabia and have progressed rapidly since our May Series A fundraise. Our Open Banking Certification from the Saudi Central Bank (SAMA) is the first for any open banking platform. We are now fully operational in SAMA's regulatory sandbox.
Do you consider the global recession merit or demerit regarding the fintech industry? And why?
Current global economic uncertainty creates challenges and opportunities. Regionally, we have seen huge demand for open banking, helped by a massive increased demand for digital services generally.
In tough economic times, disruptive innovation emerges, such as fintechs revolutionising traditional financial services. Open banking appeals as it enhances existing products and services, such as lending. Via open banking, financial institutions can streamline processes, be more efficient, and be more financially inclusive.
Open banking also saves money for customers and institutions. Secure sharing of data means customers access tailored financial solutions, while banks can offer personalised services and reduce operational costs. Cost savings are critical to encouraging resilience in the financial ecosystem.
Is Tarabut Gateway welcoming other investors besides the existing 13 ones including Pinnacle Capital and Visa?
We appreciate our current investors who have supported us and continue to be committed to our growth, and like any other company on a fast growth trajectory, we remain dedicated to exploring additional investments and actively engaging with both existing and potential future investors. This approach will drive our expansion efforts and pave the way for further achievements in the future.
Tarabut Gateway recently announced its first collaboration with a crypto asset service provider Rain. To what extent this partnership will foster digital payment in MENA?
The partnership has great potential. GCC governments have been progressive in attracting crypto businesses. The UAE's virtual assets regulatory authority (VARA) regulation, for instance, is widely recognised as a crucial milestone. Yet, crypto adoption has struggled with inefficient procedures for buying and selling them.
Rain is the first-ever collaboration of an open banking platform and a crypto assets trading platform in MENA. Primarily, it will enhance the speed and cost-effectiveness of fiat-to-crypto transactions. With funding payments taken directly from users' bank accounts, the process is streamlined and simple.
In your opinion, what are the needed policies and regulations that can enable your business to expand on a global scale outside MENA?
We believe in global, harmonised open banking standards – to simplify compliance and allow fintech expansion. We advocate universal data privacy and protection regulations, akin to the EU's general data protection regulation (GDPR), to reduce costs/complexities and streamline cross-border data flow. Fintech-friendly policies, such as easier licensing and innovation incentives, are also welcome.
Expansion beyond MENA appeals, but strategically – we will target markets lacking a solid open banking infrastructure or with room for improving the existing one. Our objective is not just expansion, but growth where we can bring significant improvements and efficiency.
Fintech now includes various sectors and industries, such as education, fundraising, investment management, and more. Which segment -besides banking- is the main focus of Tarabut Gateway?
We collaborate with banks, lenders, and fintech companies in various product segments: personal finance tools, digital wallets, and lending services. Lending is experiencing significant growth. We help partners enhance credit risk assessment, streamline loan processing, detect and mitigate fraud, and improve accessibility to lending services.
In going beyond traditional banking, we help advance many sectors in the fintech ecosystem, ensuring open banking technology positively impacts many areas of financial services.
To what extent do you count on Artificial Intelligence (AI) in securing digital payment?
Machine learning (ML), a subset of AI, leverages algorithms to analyse data, learn from it, and make predictions or decisions. This can significantly enhance much of the banking experience within the realm of open banking and our business.
In the lending industry, it can streamline risk and credit scoring, by large data set analysis. ML is vital for fraud detection, spotting patterns in transactions, and achieving new levels of personalisation. User behaviour and preferences help banks provide tailored recommendations and services.
Tarabut Gateway reshaped the financial landscape in Saudi Arabia and fostered open banking infrastructure. What is the difference between KSA and other markets in MENA regarding the fintech ecosystem?
There are notable differences; KSA stands out due to its rapid progress and leapfrogging. The Kingdom has been very proactive - advancing its fintech ecosystem and promoting financial inclusivity – driven by Vision 2030, which emphasises digital transformation.
Several factors have contributed. The Kingdom has a progressive and competent regulator, SAMA; a digitally savvy and ambitious young population – quick to embrace technological advancements; and a significant influx of private and public sector investment in digital infrastructure, with domestic and foreign players contributing.
The market has progressed rapidly. SAMA led with its new Open Banking Framework in January 2021, followed by the regulatory sandbox launch in November 2022. There are plans to shortly introduce Payment Initiation Services regulation, showing the Kingdom’s continued evolution of its fintech landscape.
Last year, Tarabut Gateway announced four partnerships with Saudi-listed banks. What are the criteria you set to join forces with lenders in any country?
Core to our strategy is building strong alliances with diverse, leading banks in our active markets, including KSA, Bahrain, and the UAE.
Bank connectivity in open banking is very important, helping expand the range of accessible financial data and enriching our data-driven solutions. It benefits our banking partners and their customers, bringing the goals of financial inclusivity and transparency, ever closer.
We are very proud of our regional market coverage - over 90% in Bahrain and above 60% in KSA. This is due to a careful selection of partners: esteemed reputations, committed to digital innovation, and aligned with our mission.
We want a cohesive and interconnected financial ecosystem, giving consumers seamless access to broad services. Our partnerships are crucial for this, helping us foster innovation and grow in open banking.
Tarabut Gateway secured a total of $57 million in fundraising over five rounds. Do you believe startups can maintain a growing business without funding amid the global high inflation and aggressive interest rate hikes?
These are tough economic times, but startups’ viability still depends on fundamentals: the business model, controlling costs, generating revenue, and a clear path to profitability.
If a product meets a market need and the business model is robust, it is well-placed to navigate macroeconomic challenges and survive/thrive.
Do you think the Metaverse can impact the digital payments and fintech industry? And how?
Yes, possibly. The Metaverse is still nascent, but new payment methods and cryptocurrencies are plausible in this novel digital space. It could even spawn new business models and fintech-focused solely on the Metaverse.
What challenges did you face when you decided to launch the open banking wave in MENA?
When I embarked on the journey to establish Tarabut Gateway and introduce open banking in the region, it was met with complete novelty. The primary challenge educating varied audiences: regulators, banks, customers, media, and the public. This awareness-raising and building understanding took several years.
As a sole founder, I shouldered risks and took on multiple roles. A major milestone was our open banking license in Bahrain - the first company in the Middle East to achieve this - and we successfully launched our services in the Kingdom.
Expanding into larger markets such as the UAE and Saudi Arabia required rapid scaling and further growth - which was a new set of challenges. Thanks to the stamina and talent of our exceptional team, plus regulatory support, we have achieved great success. We remain committed to bringing open banking’s benefits to all of MENA and are excited about the opportunities ahead.
