The Rise of Fintech Companies in the UAE
Author: Daniyal Chishti
The UAE’s fintech landscape was in its infancy a few years ago. Today, all of that has changed; as one of the region’s top financial technology centres, Dubai alone is home to over 80 fintech start-ups. That’s 20% of the world’s fintech businesses in one city!
The expanding digital economy, combined with regional innovation initiatives, makes UAE an attractive place to launch and scale a start-up. Read more to find out about the current environment, government initiatives and how fintech startups can use our help to thrive in this marketplace.
What is Fintech?
Fintech is a ‘portmanteau’ of financial technology. It’s used to describe new tech that seeks to improve and automate the delivery and use of financial services. For example, financial technology could help you make payments via your smartphone or monitor the performance of your investments in real-time.
There is a growing need for financial technology in the region. For example, the UAE eCommerce sector is expected to see continued growth as more UAE consumers demand online payment options and merchants increasingly recognize the need for an online presence as reported by a joint study by Dubai Economy and Visa, one of the world’s leader in digital payments.
49% of UAE consumers surveyed have been shopping more online because of the pandemic. Moreover, three out of five (61%) now use digital wallets more to make payments online instead of cash on delivery.
The increased adoption of digital payments has expanded UAE’s payments market to include fintech companies. Most of these start-ups have effectively set up their operations or are soon planning to set up operations in the region to take advantage of this positive shift.
UAE Government Initiatives Bolstering Fintech Sector
The UAE’s economy was largely driven by oil exports, but now it has also been successful in creating a global financial hub with robust banking services and innovative technologies such as blockchain-based payment platforms. The UAE government has taken several initiatives to bolster this sector, including the launch of “Fintech Strategy 2021” in 2016 and the establishment of Dubai Smart City as well as a National Financial Technology Lab in Abu Dhabi.
The Abu Dhabi Global Market (ADGM) established the Middle East’s first regulatory framework and fintech sandbox in 2016. The sandbox, which is the world’s second most active, is a low-risk area in which fintech companies can test their innovations. As a result, it is an ideal location for innovation, which can lead to the region’s development and progress.
DIFC Fintech Hive, the region’s first and largest fintech accelerator, was inaugurated in Dubai in 2017. The accelerator has a dedicated US$100 million budget and has assisted over 120 start-ups. These start-ups have raised more than $350 million in funding.
With its progressive laws towards innovation, flexible regulatory framework coupled with zero tax regime for start-ups, Dubai has become one of the most attractive destinations for foreign investment over time – especially when it comes to fintech start-ups. Firms such as Transferwise, Revolut and WorldRemit are just some examples from an ever-growing list of companies who have chosen Dubai as their base for expansion into other markets across Africa or the Asia Pacific region.
UAE’s Fintech Environment
Fintech has become an important part of the country’s economy and its expected to grow further in the coming years. The UAE ranked first globally among fintech hubs in terms of innovation, market size and growth potential. There are over 134+ fintech companies based in the UAE, which employ more than 2,000 people!
UAE is home to many innovative start-ups and companies that focus on promoting financial inclusion through technology. Some of them are:
MenaPay provides customers with a digital wallet that works everywhere. The platform accepts MasterCard, and also offers instant bill payments using an app called MenaPay Inbox. The application has an integrated chatbot service where consumers may get answers from within their messaging applications.
Tarabut Gateway is Middle East’s largest Open Banking platform, that revolutionizes the way banks and financial technology engage. The platform provides an account aggregation and payment initiation offering, that allows users to see information about all of their accounts in one location and even initiate account-to-account payments without having to open several banking apps.
NymCard recently developed an Open API that will allow fintech and banks to create new, creative payment services. This payment service reduces friction in the process of issuing card programs and payment solutions.
Ayoba Cashless Wallet System allows users to link their bank accounts or credit cards to make one-click payments online. Users can also scan QR codes at merchant locations.
Finextra estimates that by 2022, 465 fintech firms in the UAE will generate about $2 billion in investment capital funding, compared to $80 million in 2017.
Your Fintech Partner In Growth
As the fintech industry continues to grow, so does the need for talent. AIQU has over 15+ years of local and global recruitment experience with a diverse team of experts spread across six specializations. We have a team of recruitment experts that ensure emerging fintech companies like yours find the right talent, faster.
Get in touch with us now to learn more about how we can help and support you in your journey to becoming an emerging fintech company in the UAE.
