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FinMaze on KSA’s FinTech Landscape and Their Stance At LEAP 2023

FinaMaze is the MENA’s Hybrid hybrid human/robot digital wealth manager in the MENA. It is dedicated to addressing persistent issues facing the investment sector in the area and beyond. FinaMaze links machine learning with human behavioural science to offer individualised investing solutions by combining sophisticated AI with Data Scientists, Quantitative Finance, and Software Engineers. The central concept behind FinaMaze is ‘AI at the service of Humans,’ with a strict code of ethics, transparency, and a dedication to realistic investing situations and results. They also have an extended Investment Management License and are regulated by ADGM’s Financial Services Regulatory Authority (FSRA).

Here, Mehdi El Amine Fichtali, Founder and Chief Executive Officer of FinaMaze shares his insights on the ever-evolving Saudian market…

  • Please walk us through the services you offer.

FinaMaze is setting a new standard in personal investments, providing unparalleled personalisation and performance for both our B2C and white-label B2B2C clients. Our unique hybrid human/AI framework creates, manages, and executes trades for custom investment portfolios that span global and regional stocks, fixed income and sukuks, commodities, and long/short hedge fund strategies. Our solution also offers investors unprecedented access to private equity and VCs, with a minimum investment of 10k USD. FinaMaze’s dynamic rebalancing model considers over 4,000 possible risk profiles, allowing us to deliver superior risk-adjusted returns while respecting each investor’s tailored risk controls. With our cost-effective and diversified portfolios, clients can rest assured that they are getting the most out of their investments.

  • How would you describe the FinTech landscape shaping in KSA?

The FinTech landscape in KSA is undergoing rapid evolution, driven by a convergence of four key factors:

  1. The government and regulators are prioritising promoting a digital economy, creating an environment conducive to the growth of FinTech startups.
  2. The availability of funding from family offices and venture capitalists provides a vital injection of capital into the sector.
  3. The market potential in KSA is attracting founders from within the country, the region, and beyond.
  4. Consumers’ increasing adoption of digital financial services is creating a receptive market for FinTech innovations.

These converging factors shape a dynamic and rapidly evolving FinTech landscape in KSA, with significant potential for further growth and innovation.

  • How was it participating for FinaMaze in LEAP 2023? Could you walk us through your experience?

We had the opportunity to connect with the regional stakeholders we already know and with players from outside the region with whom we shared lessons learnt and explored opportunities for global partnerships and cross-pollination.

One notable event was our participation with other fintech leaders in a roundtable hosted by Fintech Saudi and the CMA, which focused on the crucial role of fintechs in driving KSA’s economic transformation. During the roundtable, we discussed the necessary ecosystem evolutions to unlock the full potential of the fintechs in the Kingdom and position the region as a FinTech hub. Additionally, the conversation highlighted the importance of regulatory frameworks and policies that encourage the growth of a thriving FinTech ecosystem by promoting R&D and innovation.

  • What are the core challenges the FinTech industry is currently facing?

The FinTech industry is currently encountering challenges both globally and regionally. A global challenge is a shift in investor mindset from a ‘grow your market share at any cost’ to a more cost-conscious approach. Venture capitalists are closely monitoring B2C customer acquisition and retention costs, which could lead to reduced funding for some fintechs and may require painful reorganisation.

On the regional level, regulators know they need to devote more resources to keep up with the rapid pace of innovation and gradually ease some restrictions to prevent a complex and fragmented regulatory environment. The absence of a robust strong pan-regional license passporting creates additional hurdles and expenses for the regional fintechs, impeding their competitiveness with the European fintechs that can attain scalability faster thanks to their more integrated regulatory landscape. Furthermore, there is intense competition for local talent as not only FinTech but also banks and governments compete for the same pool of highly skilled workers.

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  • Where do you see the FinTech industry moving forward in the future?

During the 2020-2021 era, venture capitalists prioritised B2C startups that grow at any cost, but in 2022-2023 the narrative abruptly pivoted to controlling expenses and surviving. Looking ahead, I anticipate more interest towards resilient, multi-year-income and profitable startups, which you find more in the B2B space.

For the fintechs in the GCC region, I predict a shift towards the players that focus on adding value to incumbent banks and financial institutions through flexible and easy-to-implement technology and new faster-better-automated processes that assist them in their digital transformation.

For me, 2023 will be the year of Intellectual Property, favouring B2B FinTech with unique proprietary technology and processes over B2C companies that rely heavily on social media and mass marketing.

  • Are there any strategic alliances made for 2023?

Consolidation within the FinTech industry has begun globally, with larger fintechs acquiring smaller ones to bolster their offerings and achieve technology and marketing synergies.

I anticipate seeing some M&A activity in the MENA region, but more from established financial institutions acquiring minority stakes in select B2B fintechs rather than majority stakes. These financial institutions will target fintechs with whom they already engage at the business level and possess unique Intellectual Property or Technology. Their B2B contracts will ensure continued growth and create value for startup shareholders.

As a result, pure venture capitalists will face competition from these financial institutions’ strategic corporate venture capital arms when it comes to capital deployment and deal origination.

From Logistics News ME March 2023 Issue