Wio, a state-backed digital bank, made its debut in the United Arab Emirates, unveiling its strategic focus on serving small and medium enterprises (SMEs) as an initial step, while keeping an eye on a potential public listing in the future.
Describing itself as a “platform bank,” Wio has established three key business lines: digital banking apps, embedded finance, and banking-as-a-service—offering banking services through third-party distributors.
Major stakeholders in Wio include Abu Dhabi sovereign wealth fund ADQ and Alpha Dhabi, collectively owning 65%. Etisalat holds a 25% stake, and First Abu Dhabi Bank accounts for 10%. With the preliminary endorsement from the UAE central bank in February, Wio received the green light to commence its operations.
The Chairman of Wio, Salem Al Nuaimi, underscored the importance of catering to the historically under-addressed pain points of SMEs. He highlighted in an interview with Reuters that SMEs had a lot of pain points that had been under-catered to historically for various reasons. He further emphasized that beginning by being in close proximity to them and comprehending their needs was of great significance. Al Nuaimi further emphasized the bank’s commitment to finding diverse funding solutions for SMEs.
Wio’s CEO, Jayesh Patel, outlined the bank’s strategy to support SMEs through its Wio Business division. Patel revealed that Wio has the capacity to extend its own funding to SMEs, along with facilitating their access to alternate financing avenues. Currently, the establishment of the Wio Business division takes precedence, as per Al Nuaimi.
Elaborating on its distribution strategy, Patel noted that Wio is engaged in discussions with various businesses, including a regional e-commerce player, to expand its service offerings through partnerships.
While Wio is currently concentrating on serving the SME segment, it plans to broaden its reach to retail customers in the forthcoming quarters. The vision extends beyond serving specific customer segments—Wio aspires to position itself as the premier platform bank in the Middle East, with potential acquisitions on the horizon.
Acknowledging the substantial backing from its shareholders, Al Nuaimi affirmed that Wio is well-capitalized and does not require an initial public offering (IPO) for immediate fundraising needs. However, he hinted at the potential for an IPO at a later point, driven by the growth trajectory of the bank. Al Nuaimi commented, “I think here in the UAE there is a good market that has been and will continue to grow for listed companies. And so I think eventually we will get there.” He added that while there isn’t a fixed timeline for an IPO, the focus is on ensuring the right steps are taken to lay a solid foundation.
The arrival of Wio as a platform bank in the UAE signals a significant development in the region’s financial landscape. With its unique approach catering to SMEs and plans to diversify its offerings across various customer segments, Wio is poised to make an impact. The potential for a public listing down the line reflects the organization’s aspirations for growth and its confidence in the evolving financial markets of the UAE. As Wio navigates this multifaceted journey, its role in shaping the future of banking in the Middle East becomes increasingly evident.
