The Future is Fintech

Lynn Bizri, Apr 17 2017

Despite the challenges they face, fintech startups continue to innovate and disrupt the way we lend and borrow money, pay for goods and services, transfer funds across accounts and overseas and run online marketplaces. Advances in technology, consumer demand, and consumer behavior have all played a key role in driving innovation in fintech, with the sector experiencing substantial growth worldwide and investments increasing every year.

According to data accumulated by the Financial Technology Partners, an investment bank focused on fintech, in 2016, fintech companies worldwide raised a total of $36B in financing across over 1500 deals from over 1700 unique investors.  Moreover, according to CB Insights, there are already at least 20 fintech unicorns - private companies worth US $1B or more – in operation to date.  

In MENA, there is a visible and growing infrastructure of accelerators, incubators and investors, and it is the consensus and collaboration among players – governments, financial institutions and entrepreneurs – in the fintech ecosystem that determines its success and fosters financial transformation. To encourage entrepreneurial activity and improve the region’s overall competitiveness, governments must apply policies and a regulatory environment that will improve the development of the ecosystem.

To encourage innovation and strengthen their competitive position, financial institutions should partner with fintech startups and contribute their market expertise. Finally, in order to benefit from greater access to capital, market expertise and an open market, entrepreneurs should continue to contribute innovative and disruptive technologies to the ecosystem.

While MENA’s fintech ecosystem may still be in its infancy, it has already witnessed several success stories. Last year, Abu Dhabi launched the region’s first ‘sandbox’ to facilitate fintech growth, and incubators, enterprise development funds/programs and innovation hubs in the UAE have been supporting the creation and growth of local fintech entrepreneurs. Lebanon, which has experienced exponential growth since the announcement of Circular 331, is currently home to several fintech players including leaders such as Pinpay and Zoomaal. Even nascent fintech environments like Jordan and Saudi Arabia have seen major progress in the fintech space.

In August, Jordan’s accelerator Oasis500 held the country’s first fintech workshop and in 2015, the Central Bank of Jordan launched an electronic payments system designed to allow users to receive and pay bills electronically. As for Saudi Arabia, it has promised to put fintech at the heart of the King Abdullah Financial District rising in Riyadh, and informed speculation is that a large amount of the $100 billion Vision Fund launched by Softbank and Saudi Arabia will be reserved for investment in the next generation of fintech. The future for the fintech industry in MENA look promising, and with the support of the region’s financial institutions and governments, it will only keep growing. 

 

 

Comments   

Catch up on what you've missed