Best digital banks and neobanks in the UAE
Do you want to seamlessly open a bank account and access banking services online? Consider these innovative digital banks and neobanks in the UAE.
Digital banking in the UAE explained
In an ever-increasing digital world, it’s no wonder that more and more people are looking to also take their banking online with digital banking services. The pandemic further accelerated the digital banking industry as many processes that would usually take place in person had to be moved online. In the UAE, nearly 20% of adults currently have a digital bank account and it’s estimated that more than one-third of residents will have a digital account by the end of the year. Digital banking lets you manage personal and business finances and is especially popular among tech-savvy young adults.
Digital banking allows you to open and access accounts via a computer or a mobile application and often has the following features:
Process automation
Web-based services
Application Programming Interfaces (APIs) that help two applications work together
Cryptocurrency and gold purchase
Stock market investment
Digital banks provide an alternative to traditional banking methods which require customers to conduct most activities in person or over the phone. These banks have a variety of benefits, but of course, come with some drawbacks as well.
Benefits of digital banking: | Drawbacks of digital banking: |
|---|---|
No need to visit a branch in person - open an account and use banking services fully online | Less personal assistance, especially for users that aren’t tech-savvy |
Securely manage your finances using the latest technology that ensures privacy, security, and safety | Less operational experience, ie. less confidence in and familiarity with the services |
User-friendly platforms with personalized features | Digital banks may operate independently and have fewer regulations |
More financial services geared towards specific populations like startups, self-employed people, and youth | |
Can often make payments and transfers locally and internationally |
A few traditional banks in the UAE have launched digital banking services for their users or developed separate online branches with a digital-only platform. More recently, non-banks have also begun to offer digital-only banking services in the UAE. Some of these entities offering digital banking services are fully licensed, while others don’t have a banking license and depend on collaboration with traditional banks.
What is a neobank?
The term “neobank” refers to a new-age bank that is entirely online. They may also be referred to as “challenger banks”. A neobank is often a financial technology (fintech) startup company that was formed with the goal of offering its services solely online, without any physical location.
The terms “neobank” and “digital bank” are often used interchangeably to refer to entities that offer digital banking services; however, there is a distinction between the two. In general, a digital bank is the online arm or branch of a traditional bank, whereas a neobank exists independently of a traditional bank.
Digital bank | Neobank |
|---|---|
An online arm of a traditional bank or partnered with a traditional bank | A fintech/startup that operates independently of a traditional bank and relies on innovative business models |
A fully licensed financial institution | May or may not be fully licensed |
Typically offers a broad range of services such as savings accounts, personal loans, credit cards, mortgages, etc. | Typically offers fewer, but more-personalized services, such as payment transfers, currency exchange, online account opening, debit cards, and budgeting tools |
No physical location so may be able to save costs and offer customers lower fees / higher interest rates | No physical location so may be able to save costs and offer customers lower fees / higher interest rates |
Best digital arms of traditional banks in the UAE
As mentioned above, there are several traditional banks that have opened up digital banks in the UAE. These digital arms, just like the traditional banks that own them, are regulated by the Central Bank of the UAE.
Mashreq Neo
Mashreq Neo is a digital banking service launched in 2017 by Mashreq Bank. They have over 400 ATMs across the UAE and allow their customers to send money to 40 countries.
Mashreq Neo offers current and savings accounts, as well as investment, foreign currency, and gold accounts. Their popular accounts are Neo Basic, Neo Smart, Neo Salary, Neo Savings, and Neo NXT. To open an account, you must have a valid Emirates ID and be 18 years or older; however, they also offer a Non-Resident Indian Account. Once you have an account, you have access to other services like loans, fixed deposits, investments, trading accounts, and more.
Mashreq NEOBiz is their solution for entrepreneurs and small business owners and offers specialized business accounts, foreign exchange/money transfer, and other valuable add-ons.
Liv. by Emirates NBD
Liv. was also launched in 2017 by Emirates NBD Bank and was designed for the digital generation (Millennials and Gen-Z) in the UAE. Their customers can send money to over 40 countries.
They offer two credit cards, a Platinum Credit Card and World Credit Card, with rewards programs and benefits from popular brands. They also have a USD account and a Goal Account to help you save. With a Liv. account, you can request and send money to friends and family via SMS or social media, or complete a bank transfer. There is also a Liv. Young debit card that’s available to kids and has its own application to help them learn to independently save money and track their spending.
Liv. is focused on helping young people reach their goals with rewards and benefits, and doesn’t offer other banking services yet. However, they plan to offer personal loans in the near future.
E20. by Emirates NBD
E20. is a digital business bank launched in 2019 by Emirates NBD Bank. It’s designed for entrepreneurs and small and medium-sized enterprises (SMEs), including LLCs, Sole Proprietorships, and more.
To open an account, you must be a UAE resident and provide your passport, Emirates ID, trade license number, and a copy of your written signature. They offer 3 packages with different fees and services that require an average monthly balance of AED 10,000, AED 50,000, or AED 75,000. An E20. bank account is accessible to the Department of Economic Development (DED) which regulates all mainland areas in the UAE. They currently don’t offer interest on the account balance, only do local transfers, and only allow accounts opened in AED. E20. is working to offer international payments and onboard in UAE free trade zones soon. They also have expense management, instant invoicing, cash deposit, and cheque deposit services.
ADIB SmartBanking
ADIB SmartBanking was launched in 2019 by Abu Dhabi Islamic Bank (ADIB). Customers can open a Mudarabah-based savings account (a type of Islamic financing).
Their services are aimed at Millenials, for personal and non-commercial uses. To open an account, you must be a UAE resident and more than 18 years old. With a SmartBanking account, you can transfer money locally and internationally, track transactions, manage credit card payments, send payments via SMS, and more. Customers can also undergo pre-approval and apply for customized personal financing via the mobile application.
Every SmartBanking account is also linked with Money Smart, a digital community for personal finance. This is a space dedicated to sharing information and advice among peers and experts.
ADIB Amwali
ADIB Amwali is a digital banking platform for kids launched by ADIB in 2021.
An ADIB Amwali account and debit card are available for children from 8 to 18 years of age, given that their parent has an existing ADIB bank account. Its services are limited to receiving allowances, sending money to friends and family, setting savings goals, and making purchases. The application also has financial planning features and informational videos.
Best neobanks in the UAE
Now, let’s look at some of the neobanks providing digital banking services in the UAE.
Wio Bank
Wio was licensed by the UAE Central Bank in 2022 and is owned in part by the First Abu Dhabi Bank (FAB). They are headquartered in Abu Dhabi.
Wio offers both personal and business accounts (for SMEs and freelancers), as well as embedded finance for e-commerce businesses and banking-as-a-service solutions (BaaS solutions). Their products include a current account, saving spaces, debit cards, virtual debit cards, and online transfers in both AED and USD.
YAP
YAP was launched in 2021 as the first independent digital banking platform in the UAE and is partnered with RAKBank.
Their services are available to UAE residents. YAP is a digital payment services platform that you can link your debit or credit card to and offers services such as instant bank transfers (local and international) and spending analytics. They are not licensed on their own but provide products from RAKBank. All of their users can get an IBAN issued from RAKBank and a virtual card. Some of their product offers include equity trading, loans, and more.
YAP is available in the UAE, Pakistan, and Ghana and works with multiple established and new banks in these regions.
Zand Bank
Zand was licensed by the UAE Central Bank to become a fully independent commercial bank in 2022. They are headquartered in Dubai but have no physical branches. Zand caters to retail and corporate clients and is modeled after the most successful European digital banks.
All you need to open a Zand account is an Emirates ID. Their services include accounts, cards, loans, money transfers, and financial management tools. Zand Corporate has account opening and lending solutions for UAE businesses, currently on an invite-only basis. They also have personal banking services coming soon.
Best neobanks in other GCC countries
The digital banking sector continues to skyrocket in the UAE, but there are also innovative entities stepping in to fill the gap in other countries in the region.
Here are some of the top digital banks and neobanks in other Gulf Cooperation Council (GCC) countries.
STC Pay in Saudi Arabia
Fintech licensed by the Saudi Central Bank (SAMA)
International money transfers in partnership with Western Union
ila in Bahrain
Licensed by the Central Bank of Bahrain
meem in Saudi Arabia
Retail banking arm of Gulf International Bank (GIB)
Saudi Digital Bank (SDB)
Licensed by SAMA, not on the market yet
Licensed by SAMA, not on the market yet
To sum up
Digital banking is on the rise and doesn’t seem to have an end in sight as customers increasingly prefer the ease that online banking provides. There are plenty of good digital-only banking options in the UAE, whether you already bank with a financial institution and want to take advantage of their new digital online options or are interested in specialized services from a neobank.
Other banks in the UAE, such as the Commercial Bank of Dubai (CBD), Dubai Islamic Bank (DIB), and Abu Dhabi Commercial Bank (ADCB), also offer digital account opening services to their current customers. These are, respectively, the CBD Digital Current Account, DIB Smarter Banking, and ADCB Hayyak. The Anglo-Gulf Trade Bank (AGTB) is another up-and-coming neobank that is licensed and regulated by the Abu Dhabi Global Market (ADGM). AGTB is a digital trade bank with the goal of addressing the financial issues of high-growth businesses in the UAE and GCC. Discover the best way to set up a business in the UAE, from trade licenses and setup costs to the most popular licensing zones.
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