Zand, which aims to be the first fully independent digital bank in the UAE, gears up to launch both retail and corporate services later this year.

The new digital bank aims to challenge traditional banking rivals as the Covid-19 pandemic drives a wave of digital adoption across the Gulf.

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Zand plans to offer interest rates of “around 2%” on deposits, according to CEO Olivier Crespin, as it seeks to attract users and compete in the crowded UAE market.

Some 48 banks are already catering to the 10 million people in the federation of seven emirates, consisting of Abu Dhabi (which serves as the capital), Ajman, Dubai, Fujairah, Ras Al Khaimah, Sharjah, and Umm Al Quwain.

Keeping pace with consumers in a fast-moving marketplace

As consumers in the Gulf go digital, they are creating opportunities for innovative financial services providers to disrupt the market.

“We think there is a huge opportunity,” Crespin said. “We are onboarding friends and family on both the retail and corporate side, and we should be ready to go to market in the next couple of months.”

Zand will offer cards, loans, accounts, and personal financial management products “comparable to N26 or Revolut” for new retail customers, Crespin said, drawing a comparison with some of Europe’s established neobanks.

“We’re also focusing on the corporate side, where we are going to work primarily on supply chain finance,” he added.

Gearing up for intense competition

The launch comes as Covid-19 accelerates the adoption of digital services across the Gulf region. Demand for financial technology products among its young and mobile enabled population is rising, particularly in the UAE and Saudi Arabia.

However, the rising competition underscores the challenge for Zand — a start-up that will need to compete on product, service, and back-end technology, while still being subject to the same capital requirements and regulations as its traditional bank rivals.