An inclusive financial ecosystem? MAGNiTT interviews Lean's CEO and Co-Founder, Hisham Al-Falih

Lean Technologies ("Lean"), a Riyadh-based FinTech platform that builds developer-friendly APIs, recently raised $3.5M in their Seed funding round

Following the announcement, MAGNiTT took the opportunity to catch up with Lean's CEO and Co-Founder, Hisham Al-Falih to explore their growth plans, the largest challenges to scaling in MENA, if people in the region struggle to trust in such digital platforms, the benefits of an inclusive financial ecosystem, and more.

Check out the interview below. 

Q1. To start, tell us briefly about Lean. How does it work?

Lean is a Saudi B2B company that builds developer-friendly APIs, which provide Fintechs with access to customer financial data and payment initiation capabilities. Lean achieves this by partnering with Financial Institutions (i.e. Banks) to provide them with a state-of-the-art API integration layer to complement their existing infrastructure, thus ensuring full transparency, oversight, and control over the data being shared by their customers, while also accomplishing full Open Banking compliance. Fintechs can, therefore, integrate with a multitude of Financial Institutions through a single platform - the Lean Universal API.

Lean was built to provide secure, reliable, customer-consent-driven data access channels for the MENA Fintech ecosystem.

Our data access strategy is our fundamental differentiator. Other players have adopted methods such as screen scraping or reverse-engineering to gain access to customer data, which we believe exposes customers and banks to significant risk of fraud and cyber attacks. We therefore chose to adopt a strategy of partnering with banks and regulators to build robust, secure channels to achieve the objective of data accessibility without compromising customer privacy, data security, and ecosystem stability.

Q2. Do people in the region struggle to trust digital platforms such as Lean? And how have you overcome this?

Middle Eastern consumers are amongst the youngest, best-educated consumers in the world with some of the highest smartphone penetration rates. We, therefore, do not subscribe to the idea that regional consumers will be more averse to trusting digital platforms, especially given the overwhelming adoption of digital mediums in the region. Having said that, we fundamentally believe that the adoption of new technologies occurs in waves as Geoffrey Moore theorized in his seminal 1991 book “Crossing the Chasm.”

We are steadfast in our belief that B2B infrastructure enablers, such as Lean, are integral to the success and growth of any successful Fintech ecosystem. To that end, we aim to provide a solution that enables customers to benefit from cutting edge Fintech products without compromising their privacy or security.

At Lean, we go to great lengths to ensure that customers are well informed about their rights and privileges, as they ultimately are the beneficial owners of their own data and must make informed decisions on how to utilize it to their best advantage. Furthermore, we have taken each and every precaution to ensure that customer data is secure, private, and only shared with third parties explicitly authorized by the customer.

Q3. What are the benefits of an inclusive and accessible financial ecosystem? And why should customers have more control over their financial data?

Customer financial data such as transaction history and real-time balance can be greatly insightful. Fintechs could utilize customer data to provide cutting edge products including real-time budgeting advice, consolidated financial reports, alternative access to credit, and financial advisory. Leveraged correctly with the right intentions, access to customer financial data promotes financial welfare.

However, while common sense would suggest that customer data is the customer’s property, reality dictates otherwise. Customers in most MENA countries today are unable to share their data with third parties, which has created an insurmountable barrier to entry for Fintechs. Lean is on a mission to remedy this structural data imparity by providing the customer with more control over their financial data -- whether or not they decide to provide access to third parties is ultimately their decision.   

Q4. It is quite extraordinary that you managed to raise this round with the current COVID-19 crisis. Was this in the works from much earlier?

No, it was not premeditated. In fact, we began fundraising in April 2020, well past the beginning of the outbreak. We were fortunate enough to work with a group of investors who had deep sectoral expertise and understanding of the underlying trends driving Fintech growth in the region. The sophistication of our investor base allowed us all to see past short-term volatility in capital markets, recognize the long-term growth in the Fintech ecosystem, and the vitality of data aggregators like Lean to its success.

Q5. What were you looking for from your investors, beyond capital?

Our ideal investors would share our vision for the fintech ecosystem, align with our strategy for Lean, and support our operations to realize our goals. We were humbled by the level of interest we received from investors and are lucky to have found partners who have a great deal of experience in helping their startups succeed.

Q6. It’s safe to assume that after this round, you're going to have some exciting growth plans. Can you share some of Lean’s short-term plans for expansion with us? 

The proceeds from our seed round will be used towards hiring the best talent globally to provide a secure, reliable, and consistent way to access data.

We are in the process of integrating and going live with several banks in Saudi Arabia and Bahrain, and will soon be expanding to the UAE, Kuwait, and Egypt. We aim to be operational in most countries in the Middle East by 2021, which goes hand-in-hand with our mission of championing Fintech startups across the region.

Q7. What do you foresee as the largest challenges to scaling Lean in other markets in the Middle East?

As a financial data aggregator, Lean’s value to the ecosystem is derived from its ability to access and transmit valuable data to Fintechs in a safe and reliable manner. It is therefore imperative to Lean’s success that we integrate with Financial Institutions across the region swiftly and seamlessly. However, Financial Institution procurement processes can sometimes be lengthy and tedious, leading to prolonged discussions prior to implementation.

Thus far, we’ve faced great optimism and support from the Financial Institutions we’ve interacted with, who view Lean as an essential element to their digitization strategies. We hope to continuously expand our coverage over the coming months to ensure that customers of all banks can securely share their data with Fintechs.

Q8. What is your big-picture vision for the future of Lean?

Our vision is to enable the development of a strong FinTech ecosystem that can add value to and empower all its key stakeholders, namely:

1. Consumers, the rightful owner of the data, will get more access and control over their financial data, leading to more sound financial decisions.
2. FinTechs will get access to the financial data needed to make sound financial advice and recommendations to their customers.
3. Banks will have transparency and control over the types of data being accessed by third-party providers.
4. Regulators will maintain oversight on the entire ecosystem’s operations, ensuring customer protection, data privacy, and ecosystem stability.

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Despite the current crisis, H1 2020 has seen $659M invested in MENA-based startups, which is already 95% of total funding full-year 2019. Discover more data, including country and industry trends by purchasing our H1 2020 MENA Venture Investment Report