Hub71 collaborates with Mashreq and FAB for banking for startups
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. It has also 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 per cent 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 at Hub71, 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. 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.”
The whitepaper, which was developed after Hub71 facilitated several pilots with its own community startups, aimed to analyse and optimize account opening processes for startups. These pilots were done in partnership with First Abu Dhabi Bank (FAB) and Mashreq Bank.
In addition, Hub71, in collaboration with local banks, licensing entities and the local authorities, 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. Hub71 will be releasing additional results from the pilot programs and new banking solution for startups in Q4 2020.
