An amalgamation of the phrase ‘financial technology’, fintech is used to describe tech and innovation that aims to speed up and optimise financial processes. A product of the 21st Century, fintech is used to help companies, business owners, and consumers better manage their financial operations, processes, and lives by utilising specialised software and algorithms that are used on computers and smartphones.
When it comes to the Gulf, fintech entered the region in 2017 and has seen rapid and sustainable growth since then. Start-ups focused on payments, remittances, and transfers make up 85% of MENA fintech firms. More specifically, start-ups that focus on payments, remittances, insurance, online lending, digital banking, crowdfunding, blockchain and cryptocurrency have seen the most amount of investment within the fintech sector in the Gulf.
Internet and mobile penetration are important factors for fintechs, which makes MENA a great environment for it. Home to over 450 million people, the MENA region has a substantial youth population, with over half being under 25 years old. This youthful population helps with the its strong mobile penetration – which has already crossed 100%. The region is also welcoming 5G sometime this year.
Government bodies in MENA are spurring along the growth of fintech however they can – they are not only pushing for more developments in the sector, they are also partnering with private companies to help set up a sound ecosystem so that fintech-oriented start-ups can flourish. In fact, February 2021 will see Dubai welcome the fourth edition of InternetShine Corp’s FiNext conference, which aims to bring together the region’s top fintech innovators and decision makers.
Given all the above, entrepreneurs in the UAE have a huge opportunity to take advantage fintech investment. Fintech investment in the country is growing at 64% – twice the global rate of 26%. For the third consecutive year, fintech was ranked first by the number of deals in H1 2020, and it accounts for 16% of all deals in the MENA region.
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