Hub71 has collaborated with two leading banks, Mashreq Bank and First Abu Dhabi Bank, to help identify and solve the pain points faced by startups and launched a whitepaper titled: Rethinking Banking for Startups, which explores the challenges that startups face when opening a UAE bank account.
The whitepaper aims to foster collaboration with more UAE banks to pioneer new banking solutions designed specifically for tech startups. The findings outline how it may be possible to reduce the time taken for a startup to open a bank account in the UAE – from an average of 63 days – to less than five days.
The whitepaper highlights that ‘30 percent of startups fail to open a bank account’, forcing them to conduct their daily transactions via non-UAE based foreign banks which subjects startups to high international fees and presents lost opportunities for UAE banks. Furthermore, the results revealed that startups who had a more complex shareholding structure, such as those who were funded by a VC, took a longer time on average – up to 105 days – to set up a local bank account
Despite UAE’s entrepreneurial drive, the delays experienced by startups were cited as due to stringent documentation processes and lengthy KYC procedures that differ from bank to bank. These are key areas that Hub71 and partners aim to help solve for startups across the UAE.
Nader Museitif, Head of Partnerships and Business Development, said “The UAE is experiencing significant digital transformation led by startups and setting up a UAE bank account is critical in order for startups to thrive. This whitepaper demonstrates Hub71’s ability to bring together key players to further improve the ease of doing business in the UAE. Hub71 recognises the need for startups to access efficient and reliable banking products and services; so we are looking forward to drive positive change by working closely with our financial institution and regulator partners, who have played a major role in the economic development of Abu Dhabi and the UAE.”
Hub71, is working closely with banks and ecosystem partners to roll-out banking products catered for UAE early-stage startups who have little financial records and history. The solutions will ensure that UAE banks fully comply with ‘Know Your Customer’ (KYC) regulations. They will also allow startups to quickly access funds from pre-approved investors as well as access a suite of banking services for their day-to-day business.
Aref Al-Ramli, Executive Vice President – Global Head of Digital Ecosystems, Mashreq Bank, said “Opening a bank account should be a hassle free and simple procedure for entrepreneurs and SMEs. Catering to this demand, we at Mashreq have radically transformed our KYC and account opening capabilities to offer individuals and businesses convenient and accessible platforms thus improving their digital onboarding journey. Our NEOBiz proposition for example, which has been developed exclusively for startups and SMEs, offers entrepreneurs the ability to get started with their banking account in the matter of minutes. Mashreq’s support to SMEs and new businesses is in line with the UAE’s Vision 2021, in terms of making the country a leader in ease of doing business. We are pleased to work with Hub71, who have brought this important issue to the forefront, and will collaborate with them to solve the challenges faced by startups today.”
Vikas Thapar, Head of Business Banking at FAB, commented “At FAB we are continuously working to support government initiatives to boost the local economy, and SMEs play a vital role in the UAE’s GDP. That being said, we are constantly looking for ways to innovate our services and establish an environment for entrepreneurs and SMEs to not only exist, but to also thrive. FAB is working with Hub71 to completely digitise the account opening process for Business Banking customers, offering a faster and hassle free platform for SMEs to bank with FAB, and fulfill their business financial needs digitally.”