Just as two entities made public their intentions to roll out digital banks in the UAE over the last week, the group behind the Emirates’s first Islamic crypto exchange has also come forward with its Islamic digital bank plan, heating up the competition.
Zurich Capital Funds, in a statement, revealed that it has launched a Shariah compliant digital bank in the UAE, with a view of expanding into the rest of the MENA region. Zurich Capital operates in the private corporate finance space and is no stranger to the Islamic fintech realm, albeit being a new entrant. The company took its first plunge into the digital finance space in 2020 by launching Sustain Exchange, a digital asset trading platform compliant with Islamic law. It was part of its strategy to anchor itself in the space of fintech and blockchain.
The app, known as RIZQ/BARAKA, is part of the bigger digital narrative of Zurich Capital. The regulatory status of the bank is not revealed; however, it is understood that the bank is likely to adopt blockchain technology. While the company noted that the app is now available through Apple Store and Google Play, IFN Fintech could not locate the app. IFN Fintech has reached out to the firm for confirmation.
The bank will offer, among others, Murabahah-based services, payment and remittance services as well as a virtual debit card service. Zurich Capital CEO Dr Fahd Al Marabi in the statement to the media said that the group has partnered with incumbent Islamic banks and financial institutions to meet the needs of the domestic market.
If launched, the bank could be the UAE’s first fully-fledged Islamic digital bank, joining a niche vertical globally. According to the IFN Islamic Fintech Landscape, there are 12 start-ups operating in the Shariah challenger banking space worldwide as at the 19th April 2021.
Zurich Capital’s announcement comes hard on the heels of two other similar developments in the last week. Al Maryah Community Bank confirmed it has received regulatory approval to launch as a specialized digital bank, while Zand revealed it is to launch “soon”, subject to final regulatory approvals, and will be chaired by Emaar Properties Founder Mohamed Alabbar.
This spur in challenger banks is against a backdrop of surging affinity with digital finance propositions among the nine million-strong UAE population, a majority of which are expatriates, triggered particularly during the COVID-19 pandemic.