This week The BIG5D Podcast talks to Katharine Budd about NOW Money, the Dubai-based company she co-founded in 2016.
Kat, a former data analyst and banking executive, launched NOW Money in 2016 with her former university classmate Ian Dillon, who was working as an investment banker in Dubai.
Kat and Ian saw a huge opportunity in helping the overwhelming number of migrant workers in the Gulf region gain access to banking services. And in the process of giving migrant workers access to financial services, NOW Money gains the ability to earn fees off of the Gulf region’s enormous outbound remittances market.
Earlier this year, NOW Money raised a $7 million funding round led by Anthemis Exponential Ventures to fuel its expansion throughout the Gulf region.
Now money works with organizations employing larger numbers of lower-wage workers to provide financial services to their employees, including a bank account, early access to wages, a debit card, and remittances, all accessed through a mobile app.
Here are some key excerpts from the episode.
On the migrant worker opportunity
“There are actually a relatively low number of banked customers in the UAE. When we dug into that more, it turns out, there's really quite a high minimum salary requirement to have an account at all in the Gulf.
“In 2015, we started scoping it out and realizing there was a real opportunity around creating something that was uniquely designed for the needs of lower-income people. We'd seen digital-only banks in the US and in Europe really started to take off. And we thought, why is nobody doing that here?”
On the remittances opportunity
“The outbound remittance market from the Gulf is 100 billion US dollars a year. That's massive. And the only place that's only slightly bigger is the US who do $140 billion. So we really are in prime position for outbound remittance, and that's what attracted us.
“This is something that banks are not doing very well. It tends to be priced badly when people remit out of banks. This is something again that migrant workers need that's different from what banks have on offer at the moment. That always has been the anchor product in our app.”
On why NOW Money’s model is sticky
“One thing that's notably different about NOW Money customers vs. challenger banking products in the US and Europe is that those banks are often not customers’ primary bank accounts. So they have to spend a lot of money on marketing to those customers to try and get them to switch to having their salary deposited into the new account versus their old traditional bank. And a lot of those customers just tend to use those accounts as pocket money accounts.
“That's something that's different about NOW Money customers. We are our customers’ number one bank account. And because we work with their employer, we know that every single account is going to get funded every single month with all their salary. And then from that, we know that we're going to capture all their transactions. So that's an extremely sticky model to have.”
Episode 15: Katharine Budd, NOW Money