Mashreq, the UAE’s oldest bank, and Emirates NBD, Dubai’s biggest lender by assets, both rolled out online banks for small and medium-sized enterprises (SMEs) and start-ups as they invest in digital transformation and address challenges faced by new businesses.

Mashreq’s NeoBiz is a business account version of Mashreq Neo, the digital bank it started in October 2017. Meanwhile, Emirates NBD’s E20. is its second digital bank after the millennial-targeting Liv., which launched in the first half of 2017.

“SMEs have been frustrated by the amount of time, personal involvement and multiple visits it takes to open an account and conduct transactions. Another complaint is that the experience is not uniform,” Rohit Garg, Mashreq’s head of business banking and NeoBiz, told The National. “So we came up with a solution which provides an absolutely uniform, digital experience with speed and predictability.”

Emirates NBD on Monday reported a 24 per cent decline in its first quarter net income. Pawan Singh / The National

Similarly, Hesham Abdulla Al Qassim, vice chairman and managing director of Emirates NBD, said in a statement on Wednesday: “We are pleased to be launching E20., a custom-built digital business bank that will support the courage of entrepreneurs and enable start-ups as well as emerging and established small business owners to access banking services and more, seamlessly and conveniently, helping them focus more of their time on growing their business.”

While NeoBiz is now available for customers through its website and in the app store as of this week, E20. will be initially available by invitation-only to a select group of entrepreneurs to test key features and provide feedback. It is expected to be open to UAE business customers by Q1 2020, following the successful completion of the beta phase.

SMEs account for about 98 per cent of businesses in the UAE, according to AIM Start-up, a UAE Ministry of Economy initiative. They represent over 60 per cent of the country’s gross domestic product, according to the UAE Banks Federation.

Almost two thirds of entrepreneurs consider banking their biggest obstacle when setting up a business, according to a 2018 white paper from the Dubai Chamber of Commerce and Industry. Opening a bank account can take new companies at least a month and up to three months, “making the commencement of commercial operations difficult”, said the government study.

The paper urged banks to provide basic accounts for new ventures, introduce simple and transparent guidelines and adopt technology to reduce costs and improve operations.

“The requirements of getting a trade licence and getting a bank account were not synchronised in the past. I think that’s changing quite dramatically,” Mr Garg said.

Both Mashreq and Emirates NBD have been spending on technology and shifting away from physical infrastructure in recent years. Mashreq chief executive Abdul Aziz Al Ghurair told The National in March that the lender will spend at least Dh500 million over the next five years on digitisation and plans to shut half of its UAE branches this year. Emirates NBD is spending more than Dh1 billion on digitisation.

A NeoBiz account can be opened online “in just 20 minutes,” according to its website. Businesses with a minimum average monthly balance of Dh50,000 in their accounts will not be charged a fee, while any balance below that incurs a Dh200 monthly fee. The requirements include having a UAE trade licence and annual sales turnover of less than Dh30m.

NeoBiz offers three types of accounts: Trader Pro, Basic and Advance. Advance is for businesses whose minimum average balance is above Dh50,000.

Trader Pro is exclusively for customers with an e-trading license issued by Dubai’s Department of Economic Development. Benefits include 10 free fund transfers a month, a six-month, free subscription to Zoho Books online accounting software and point-of-sale (POS) terminals provided through Noqodi, a digital wallet from Dubai’s Department of Finance.

The Basic account also includes free fund transfers and the free trial Zoho Books subscription, but charges Dh750 for mobile POS set-up, as well as Dh100 monthly rental and 2.25 per cent per transaction cost.

Mashreq has also rolled out two technological initiatives in conjunction with the NeoBiz launch: a digital assistant chatbot named Emma and a digital Know-Your-Customer (KYC) platform.

Emma can answer questions about account openings and guide business owners through the steps to submit their documents. If customers require further assistance, Emma will connect them with a human agent.

The e-KYC platform allows business customers to update information and upload documents online rather than having to visit a branch.

Emirates NBD’s E20. will allow business customers to open a bank account, carry out local and international transfers, make bill payments, generate invoices, track receivables and view profit-and-loss statements from their smartphones.

E20. customers will also have 24/7 access to in-app live chat, be able to submit information through an e-KYC platform and use the new UAE Pass for digital biometric-based identification.

“The financial service industry in the Mena region has plenty of room for innovation,” said Philip Bahoshy, the founder of Magnitt. “It is refreshing to see incumbents digitalising their propositions to meet the continually evolving needs of customers, whether it be retail or SME.”

XPence founder Saad Ansari looking at the plans for the business account app for freelancers, solo entrepreneurs and start-ups. Reem Mohammed / The National

XPence provides a ‘banking alternative’ for entrepreneurs

XPence, which calls itself the region’s first digital business account for freelancers, entrepreneurs and start-ups, was established in early 2017. The start-up was supported by Abu Dhabi-based accelerator StartAD, received over $1 million (Dh3.67m) in pre-seed funding and is regulated by Abu Dhabi Global Market.

“Anywhere else, perhaps if were in Europe, we’d call ourselves a neobank but use of the word ‘bank’ is restricted here. So we call ourselves an alternative to a business bank account,” Saad Ansari, the founder and chief executive of XPence, tells The National. “For all intents and purposes, it looks, feels, smells like a bank account.”

XPence is not yet live, but it has a “waiting list” on its website. It will be available in the UAE towards the end of this year and in other regional markets, such as Saudi Arabia and Bahrain, next year.

The XPence app provides solo entrepreneurs, start-ups and small businesses with tools to categorise income and expenditure, keep track of receipts and create paperless invoicing. XPence also offers either physical contactless Visa cards or virtual cards, depending on the plan. Plans vary from a freemium model to a subscription model at $99 (Dh364) a month.