Dubai is looking to seize on the global Fintech revolution in a bid to compete with established centers like New York, London, and Singapore.
Fintech which involves using technology to provide financial services more efficiently - has grown rapidly in recent years. According to Boston Consulting Group, total funding reached $78.6 billion in 2015, up from $15.3 billion six years ago.
Both Dubai and Abu Dhabi have introduced new measures to regulate and encourage the growth the growth of Fintech startups in the region. David Martinez de Lecea, Fintech Consultant and Principal at Roland Berger says this a turning point:
"This year is interesting, 2016, it's finally changing in terms of governments and financial institutions and most importantly, financial regulators... to allow these new businesses to foster."
Almost 40% of the Middle East's Fintech startups are from the U.A.E, according to MAGNiTT, a networking portal for the region's startups, with the majority those in Dubai.
Governmental and financial institutions in the country are also looking to harness the power of Fintech companies. According to the BCG's Fintech Database, although the North American firms accounted about 70% of absolute funding last year, Europe, the Middle East and Africa (EMEA) witnessed the most explosive growth in terms of the new funding.
Most of the biggest Fintech success stories from the MENA area have focussed on local problems. Omar Soudodi is the CEO of Dubai-based Payfort, which is a regional payment solutions firms:
"Fintech is already here today. Every market us unique. The Arab world has 80% unbanked population. You have over 5 million small and medium-sized enterprises that do not accept payment online and offline for that matter. So, people see it as a challenge. We see it as a huge opportunity."
The Middle East's Fintech industry and it's potential growth was the focus points of last week's Global Islamic Economy Summit, which took place in Dubai from 11-12th October.
Abdulla Al Awar, CEO of the Dubai Islamic Economy Development Center says that city's support for the Fintech industry is a part of wider plan:
"The potential of Islamic economy is huge, and frankly, I think Dubai and the U.A.E. are well positioned to be at the center point. It is strategically located between economic hubs in the East and the West."
The latest State of the Global Islamic Economy Report, produced by Thomson Reuters shows that U.A.E ranks second to Malaysia in terms of its Islamic Economy infrastructure. According to the study, the wider Islamic Economy was worth $1.9 trillion in 2015, with the Islamic Finance sector set to reach $3.5 trillion by 2021.
Source: Reuters / GIES