BSA & The Legal 500 launch Market Watch - The Future of Finance
A report on digital transformation, innovation and the FinTech ecosystem in the GCC
BSA are pleased to announce the launch of a new Market Watch report, in partnership with the Legal 500, focusing on 'The Future of Finance: Digital transformation, innovation, and the FinTech ecosystem in the GCC'. This report looks at key trends in the FinTech market including the evolving regulatory landscape, the relationship between banks & new age Fintechs, App-Led societies, funding and growing the eco-system and Accelerators across the GCC.
In recent years, the governments of the Gulf Cooperation Council (GCC) have moved to reduce their reliance on hydrocarbons, designing ambitious strategic plans to develop into innovation-led economies within a 15- to 30-year horizon. One aspect of these policies has been to promote technology-backed and data-driven industries, particularly in the financial services sector.
Early results of this success can be seen in the resilience of The Dubai International Financial Center (DIFC) - the region's flagship offshore business hub - to the economic slowdown during the pandemic. DIFC saw a 20% increase in the number of firms operating there during 2020, with fintech among the leading growth sectors. In the past financial year, the number of fintech businesses registered with the DIFC more than doubled to over 300 - roughly 10% of all businesses registered at the centre and around a third of all financial businesses.
The success of the region's fintech sector has been the result of careful strategic planning on the part of GCC governments, many of which are offering financial, regulatory and other incentives to the world's fintech community. In particular, the GCC is now home to a dense concentration of market-leading fintech accelerators offering financial and regulatory support along with unparalleled networking opportunities and a range of other benefits. These accelerators are already among the most sophisticated and vibrant spaces for fintech innovation on Earth, and all the signs point to even stronger support for the fintech industry from the GCC's regulatory and governmental authorities in the coming years.
The GCC was a relatively late arrival to the fintech scene. The region's first significant regulatory framework directed specifically at the sector emerged in January 2017 when the Central Bank of the UAE launched new licensing programmes for digital payment services. A little over four years since that time and the region has become one of the fastest growing markets for fintech innovation in the world.
The Dubai International Financial Centre (DIFC) anticipates that Middle Eastern-based fintech companies will raise nearly US$3bn in venture capital funding by 2022, just under a third of a projected global market funding of US$10bn. While much remains to be done for the region to become the epicentre of the global fintech industry, a closer look at the regional ecosystem reveals a considerable growth potential.
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