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Bassim Haidar on Web Summit 2021: traditional banking will go fully digital

27 September 2022

Speaking at the MoneyConf stage of Web Summit 2021 last week, our founder and CEO Bassim Haidar appeared convinced that traditional banking in the future will go exclusively digitally. Participating in the panel “How Covid-19 put inclusive finance to the test”, Mr. Haidar predicted that we will see a complete separation of banking into layers in the coming years, with Banks operating exclusively in large corporate and investment banking. On the other hand, fintech companies and neobanks will take the additional layer.

Especially for emerging markets, Mr. Haidar noted that it is an area that has not yet been exploited. “We are talking about a 100 billion market, and not even 3 billion is being addressed today. You can imagine the scale we are talking about,” he said. As Mr. Haidar noted, companies such as Channel VAS, try not to disrupt the banking system since this system does not target these customers. “This is a layer of 1.7 billion people, who never had access to the financial system,” he said, adding that this is the true meaning of financial inclusion. “Financial inclusion is it for the banked or the unbanked? For the served or the underserved? Who is it for? “In our world, financial inclusion is getting people to the financial system, that they were never into it.”

Mr. Haidar also referred to the issue of personal data, stressing that in emerging markets consumers are more willing (than those in the developed ones) to share their data, as they realize they will take something in return. He expressed his hope that in the future companies would be able to measure their impact by collecting data that are not able to collect due to regulation. “I hope the regulators will help us so that we can create additional services or increase the amount of loans we offer” he concluded.

Channel VAS growth rate during the pandemic reached 30% 

Bassim Haidar’s above estimations are the result of the impressive growth rates experienced by Channel VAS, from the beginning of the pandemic onwards. Mr. Haidar noted that the company’s growth rates during 2020 reached 30% due to the success of the services it offers in emerging markets.

Mr. Haidar referred especially to the microloans offered by Channel VAS, giving specific examples of the purpose they serve. As he described, a woman in Bangladesh, through these services, can borrow small amounts of up to $100 to buy fabrics for her business and repay it in 30 or 45 days. A traditional bank cannot serve such a need, as borrowing costs go up to $150. As a result, Banks are reluctant to deal with such lending applications.

He noted that Channel VAS’ customers resort to microloans an average of seven times a year, adding that the total amount of loans during 2021 will reach $ 3 billion.