How the GCC aims to be­come a leader in the world of Fin­Tech

With ad­vances in fi­nan­cial tech­nol­ogy de­vel­op­ing at pace, we look at how the GCC fits into the global pic­ture

Gulf Business - - FRONT PAGE - By Neil King

Even by su­per­fi­cial mea­sures, the scope of in­flu­ence that Fin­Tech has is vast. Banks, stock ex­changes, pay­ments, dig­i­tal cur­ren­cies, se­cu­rity, in­no­va­tion, star­tups, em­ploy­ment, and many other ar­eas are all im­pacted by the rise of new tech­nolo­gies cen­tred around fi­nance.

It’s an in­dus­try that is blos­som­ing in earnest across the world, with in­vest­ments worth $7.7bn tak­ing place in China last year, $6.2bn in the US, and $1.5bn in the UK. It’s an in­dus­try that was val­ued at a stag­ger­ing $867bn in 2016.

To date, the Mid­dle East has ac­counted for only a small pro­por­tion of this, with re­gional Fin­Tech com­pa­nies ex­pected to raise $50m in 2017, ac­cord­ing to a report by Wamda Re­search Lab and Pay­fort – a marked im­prove­ment on last year’s $18m. In to­tal, the report shows that only $100m has been raised in the past 10 years, while a 2016 report by Fin­Tech Week said less than 0.1 per cent of global Fin­Tech in­vest­ments orig­i­nated in the Mid­dle East.

In re­cent months, how­ever, things have started to change. The GCC has staked its claim as an emerg­ing leader for Fin­Tech – with de­signs on be­ing among the world’s most in­no­va­tive mar­kets.

“For shifts in tech­nol­ogy in the past, there was al­ways a lag be­tween the on­set of the trend in West­ern coun­tries and their adop­tion in the GCC,” says Sudeep Nair, se­nior direc­tor at Cedar Man­age­ment Con­sult­ing In­ter­na­tional.

“How­ever, by virtue of be­ing lo­ca­tion ag­nos­tic and not de­pen­dent on any premise in­fra­struc­ture, the Fin­Tech boom is spread­ing in the GCC at the same speed as in West­ern coun­tries.”

A port­man­teau for ‘ fi­nan­cial tech­nol­ogy’, Fin­Tech can be ap­plied to any in­dus­try, but un­der­stand­ably en­joys a par­tic­u­larly strong fo­cus in pay­ments, ecom­merce, bank­ing, wealth man­age­ment, se­cu­ri­ties and in­sur­ance.

As such, some Gulf states’ reg­u­la­tors have rolled out new rules to not only sure up the le­gal­i­ties of the in­dus­try, but also bid for re­gional promi­nence in the field.

Dubai, Abu Dhabi and Bahrain have all launched reg­u­la­tory frame­works and li­censes that aim to boost in­no­va­tion, start-ups and in­vest­ment, with Saudi Ara­bia also plac­ing Fin­Tech as a fo­cus of its King Ab­dul­lah Fi­nan­cial Dis­trict in Riyadh, as well as hav­ing it as a core

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