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
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