Dubai: Dubai fintechs raised a combined $615 million last year - and now, they are exploring new services such as peer-to-peer lending, digital wallets, and robo-advisory services, said Essa Kazim, Governor of Dubai International Financial Centre (DIFC).
The fintech sector has emerged as a key driver of innovation and economic growth in line with Dubai’s Economic Agenda (D33) and be one of the top four global financial hubs, said Kazim at the opening ceremony of the Dubai FinTech Summit.
Dubai had garnered investment in the sector while the rest of the world faces unprecedented challenges of navigating an economic slowdown and combatting inflation. “At the same time, we are seeing a massive surge in the adoption of fintech solutions as users become increasingly tech-savvy,” he added.
A major competitor to banks, the fintech sector is expected to double in size from over $135 billion in 2021 to close to $270 billion in 2027, said Kazim, citing the DIFC Fintech Hive’s 2022 Report. “AI has become one of the most popular ways of innovating within the world of finance. Concepts like embedded finance, open banking, and blockchain have taken the world of banking and finance by storm.”
Also, there are region-wide opportunities for the sector to grow. For example, 40 per cent of the MENA region’s adult population is currently unbanked or underbanked, bringing vast opportunities for growth in the payments and cross-border payments sector, Kazim said. “Irrespective of what changes the region’s regulators, banks and payments providers will see this year, one point is for certain, the fintech sector in Dubai is shaping the future of finance by offering innovative solutions that are faster, more efficient, and more accessible to consumers and businesses.”
He said that Dubai and DIFC created a supportive and agile regulatory framework, providing access to funding, sandbox environments and resources for start-ups and established companies. DIFC is also encouraging collaboration between traditional financial institutions.
For example, the Dubai Financial Services Authority (DFSA) has introduced a regulatory sandbox programme that allows FinTech to test their products and services in a controlled environment, said Kazim. "This has helped reduce the risk of regulatory compliance issues and enables startups to fine-tune their offerings prior to going to market," he explained. Moreover, the 'Innovation Hub' launched by DIFC provides a platform for collaboration between startups, corporates, and investors. "The initiative helps bridge the gap between new players in the industry and established institutions," Kazim stated.
Moreover, the 'Innovation Hub' launched by DIFC provides a platform for collaboration between startups, corporates, and investors. "The initiative helps bridge the gap between new players in the industry and established institutions," Kazim stated.