Every regulated fintech in the UAE has a board, but having one and having one that actually works are two very different things. As AI and stablecoins reshape business models and regulators raise the bar, the question is whether fintech boards in this region are built for what is coming next. Joining me to unpack it all is Akshay Chopra, Payments Co-Chair at MFTA, Independent Director, and Managing Partner at 237 Ventures. Akshay, welcome back to the show.
Thanks for having me.
You coined the term Dinos, or directors in name only. How common is that in fintech in this region?
It used to be more common in the past across the world. Board appointments were almost considered honorary, where people would show up to a board meeting here or there, approve some board resolutions, and give some advice to founders. That was it. The term I coined is directors in name only, Dinos. The pun is intentional, because that model of directorship is obsolete, especially in the world today where things like AI and stablecoins are changing the landscape. Regulatory expectations are ridiculously high, and you require a governance model and a panel of directors that is more than directors in name only. Something more modern than Dinos.
If a payments platform goes down, people cannot access their wages. If an AI lending model misfires, entire segments get rejected. Is fintech governance a national security risk now?
Absolutely. It is financial security, economic security, and national security. It has happened. When a payment platform goes down, people cannot access their wages. If an AI model that your company adopts suddenly starts rejecting loans for an entire segment of people, or if your onboarding team starts onboarding sanctioned customers, those can all have disastrous consequences, much more than a technology simply going wrong. The responsibility on governance and effective directorship is critical, especially in fintechs.
You talk about productive tension between management and the board. What does that look like in practice?
One of the hallmarks of any successful fintech is a healthy tension. The sales team should be feeling some tension from the compliance team or the onboarding team that they are not letting them onboard customers as fast. Product teams should be feeling some tension from the cybersecurity and technology teams to not ship too fast. That tension is healthy because it means the person on the other end is holding the rope tight. The opposite of tension is not harmony. The opposite of tension is slack. In the same way, the board and management should have some healthy tension, where the board is challenging and questioning proposals from management on direction, major investments, and major pivots. That way you make sure the company is not just growing, it is growing at a sustainable rate.
Most fintech founders see a board as a box to tick for regulators. How do you change that mindset?
Unfortunately it is a regulatory requirement, so they just hire someone who signs some things and shows up to some board meetings. That really has to change. Firstly, you are losing access to great minds and great networks that a director can bring. Secondly, by surrounding yourself with yes men, nobody is challenging your decisions, especially really experienced people. You are leading yourself into more dangerous territory. A board is not inimical to management interests. Independent directors and independent chairs want to see the company grow and succeed in the right way. They are your conscience in doing so. You need to set it up in a way where you are welcoming criticism, welcoming challenge, and growing in the best interest of the shareholders.
In the UAE we have a lot of regulators. As fintechs expand across them, what happens to a board that cannot keep pace?
Suppose you are a payments fintech and you started off with a central bank retail payment services licence. Then your ambitions expand into the digital assets world and you get a wider licence. In a multi-regulatory environment like the UAE, your company is answerable to multiple regulators. Your board needs to keep pace and evolve to handle those responsibilities, because if it fails to do so the consequences are disastrous. With every licence you get and every new regime you become part of, you need to ask whether your board bench is of the right calibre. Do they have the technical, regulatory, and strategic skills to help you expand?
AI is now sitting on fintech boards as an advisory tool in some companies globally. Is that governance or is that a risk?
It could be both, an opportunity and a risk if not governed well. If I am not mistaken, the GCC Board Directors Institute published a study recently that said only 5% of enterprises in the region have a board-ratified AI strategy. If you are in the 95%, where you are doing a couple of side projects here and there but it has not become a board-level issue to evolve with AI, then that is an existential threat, I would say, and something you need to do something about.
How can boards navigate that situation?
The first thing is that at the board level you need to be educated about AI. One of the things I often tell boards is that the best way to learn AI is to use AI. Make sure everybody on the board has at least some experience with these tools, so that they know what we are talking about. They can see the efficiency gains, but also the temptation to take your foot off the pedal and let AI do the thinking for you. Exposure is really important. One thing I have often done is bring in external experts, consultants, and people from tech companies who are well versed in AI and can give a really rounded perspective on the opportunity as well as the risks. They need an independent perspective on AI and not just what management wants to sell.
For fintech founders building their first board, what are the common mistakes to avoid?
One mistake is waiting until the regulator forces them to have a board and then getting directors in name only. My recommendation is always to start before the regulator even asks. Even if you are a fintech that does not require a statutory board of directors, build an advisory board anyway. Ideally hire an independent chair, so that from the ground up you get the practice of being challenged, preparing board minutes and board papers, and being very structured in how you present growth opportunities. Your investors will also love it because they will see someone who is proactively governing themselves. Start very early. And when you build the board, make sure you are building not just impressive sounding names, but people who have the skill sets for the future of your company. If you are in fintech, understand not just banking but also the new payment rails, national networks, stablecoin, and AI. Build for the future.
Thank you so much for being here with us again. It is always great to have you.
Always a pleasure.
