Chief Executive Officer of BRS Group Financial Services Promoth Manghat talks about the future of financial services and how Blockchain and investing in startups is a must.
BRS Group holds today within its portfolio companies that include UAE Exchange, Travelex, Ditto, Remit2India and a digital Bank in France. It is no surprise that Promoth Manghat has embraced Blockchain and invested and joined various blockchain communities. He told UNLOCK, “We are a financial enabler and our growth is driven by the needs of emerging markets and the need to provide the unbanked with financial services.”
As Manghat explains to UNLOCK, “In the payments industry the ability to succeed is in the ability to scale and this needs a mindset that constantly embraces the new and is able to adapt to new technologies and mindsets. We did not want to take a wait and see approach so we chose to acquire new technologies and companies in our effort to expand our business.” He adds, “The world today has become more digital APIs, Cloud computing, Blockchain is changing the scene.”
BRS Group has allocated $250 million to investing in startups. Manghat states, “We are meeting and working with a lot of startups, accelerators, incubators and have invested in souqalmal for example, Loyal Blockchain and others. In addition, we have acquired companies even if it was just because we wanted the expertise of 18 engineers. We have already utilized 45% of the $250 million, but we are continuously on the lookout for interesting technology startups in line with our business strategy. Our investments are not carried out in traditional way and we don’t seek to create synergies we want to make the best of what we invest in and acquire. Startups that we invest in have to be solving a problem diligently and we want them to learn to be responsible with funds as they will quickly learn that one day they will become incumbents and cannot hang on to startup mentality”
When it comes to Blockchain Manghat explains, “We invest in ideas and technologies that are solving real problems of today like settlement payment issues. Settlements used to take anywhere between 48-72 hours can now be handled instantaneously. Blockchain has the potential to solve these problems and this is why we are partnering with Ripple as well as joining Bankchain community to explore build and implement Blockchain solutions.”
In January of 2018, BRS Group, through UAE Exchange joined HCNet the largest Blockchain network managed by Hashcash consultants. The exchange seeks to introduce real-time cross-border payments. It believes that integrating the technology into its processes would improve speed and reduce the cost of money transfers for its customers. UAE Exchange uses HC Remit®, HashCash’s remittance product built on Blockchain Technology that powers core IT systems of enterprises and allows instant low cost remittance for their customers. The product designed to work with regulatory and compliance environment of banks and exchanges integrates KYC and AML verification modules.
BRS Group, UAE Exchange has also created bilateral agreements for proof of concepts on Blockchain with counterparts in India.
According to Manghat retail banking will not go away anytime soon in the region. He explains, “Egypt for example is one of our biggest markets and the National Bank of Egypt will not vanish, as will be the case for India, Pakistan, Bangladesh and others. We cannot impose we just have to find solutions for the 2 billion unbanked.”
This is not easy as industry borders get blurred with social players such as Apple and What’s app getting into the online payments business as are telcos. What Manghat believes is “the world is an ecosystem and each player brings in a capability.”
As for the future, Manghat sees a much more connected world, “People are moving away from products to experiences. Taxi hailing apps have now become the largest payment institution. Apple has the biggest payment operation embedded in its offering. Today UAE Exchange offers international airtime transfer resulting in more than 100,000 transactions a month. This shows that payment will go into the background and will become seamlessly embedded in everything we do in a simple way.”