Digital bank Wio starts operations with focus on SMEs

The Abu Dhabi lender will expand its reach to retail clientele next year, chief executive says

Wio Bank aims to expand operations regionally and globally, chief executive Jayesh Patel says. Khushnum Bhandari / The National

Wio Bank, an Abu Dhabi-based digital lender, launched operations in the UAE on Tuesday, with plans to focus on small and medium enterprises in its first year.

The bank will expand its operations to retail clientele next year to become a full-service digital bank, its chief executive Jayesh Patel told The National on the sidelines of its launch in Abu Dhabi.

“We are investing a lot of time trying to make sure our experience with our customer is right," Mr Patel said.

"We did a beta [experimental version of the app] with 800 customers, continuously getting feedback and changing it … we want to grow, and at some point, become the biggest.”

Lenders are increasingly focusing on SMEs, which account for about 98 per cent of companies operating in the UAE.

Developing the sector and accelerating the growth of the start-up ecosystem are priorities for the UAE government, under its development strategy for the next 50 years.

Last month, Emirates Development Bank, the state-owned lender focused on financing companies in key industrial sectors, launched a new lending feature that allows businesses to apply for loans of up to Dh5 million ($1.3m) and receive approval feedback within five days.

With a total invested capital of Dh2.3 billion, 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.

Wio Bank secured approval from the UAE Central Bank in February to start operations.

The lender's app offers customers all the banking services, including opening an account, making transfers, tracking expenses and saving money.

“We let you do all the banking services that you already have … debit card … transfers,” Mr Patel said.

"You have your account that opens fairly quickly compared to all other experiences you have out there. We also provide other tools to save money, to manage expenses."

The bank's expansion into retail will come "once we have our SME product right", Mr Patel said.

“We have some interesting concepts we are working on, and sometime next year, you will see our retail proposition."

Wio also plans to expand regionally and globally as “there are a lot of opportunities", he said.

“We will expand globally but right now our focus is UAE and as we mature we will start looking at other markets.”

Mr Patel did not disclose information on revenue targets for the bank, nor when it plans to become profitable.

“We believe revenues and profitability will come if we get our product to fit what the customers’ needs are,” he said. "We have great shareholders and they have invested for the long term."

The launch of a new digital bank comes as cashless payments and FinTech services gain traction amid the pandemic.

Traditional banks are also focusing on boosting digital services.

Abu Dhabi Commercial Bank, Emirates NBD, Mashreq Bank and Abu Dhabi Islamic Bank, the biggest Sharia-compliant lender in the emirate, have already set up digital banks.

Zand, the Emirates’ first digital bank that aims to cater to retail and corporate clients, was also granted a banking licence this year.

Mohamed Alabbar, Emaar Properties' founder and former chairman, heads Zand. It is backed by a number of companies, including India's Aditya Birla Group (Solfrid Investments), global investment manager Franklin Templeton and UAE's Al Hail Holding.