By Ashwin Shenoy, VP — Sales, CEMEA, PayMate (@ashwinshenoy12)
‘Technology’ — the word itself opens up a world of opportunities & applications in our daily lives. Who would have thought in 2010 that life in 2019–20 would be controlled and driven by a single device? The way we connect with people, shop for essentials, book tickets, manage finances, and many other tasks; are all managed via one single device — your smartphone.
While the adoption of technology in all the above areas has been rampant in most developed and few developing countries, it is interesting to see how others are eager to join this bandwagon and leapfrog the curve. An excellent example is that of the Gulf Cooperation Council, popularly termed as the ‘GCC countries. Tightly coupled economies, heavy reliance on oil & exports, large inflow of expat talent and generally being cash rich ensured that processes, infrastructure & technology hovered around legacy. However, all that is set to change (or rather, changing already!).
Every GCC economy is opening up to innovation & disruption, with significant investments moving towards value creation & automation of day to day tasks. While certain technology companies have made a mark in various fields, the financial technology or FinTech as we are familiar with is by far the most exciting, and promising to have an avalanche growth.
The acceptance for most FinTech companies is greater in this region, as the GCC market is focused towards achieving ‘value creation’ more than ROI & costs. The high expat population also ensures that expectations are stretched, thereby pushing for early adoption and high conversion rate. A recent study conducted by Standard & Poor’s, additionally highlights the high acceleration & growth of FinTech in the GCC belt owing to ‘Customer preference for digital banking, access to capital and public policy reforms’.
Some GCC countries such as the UAE have already started working towards this development by creating a $100 million FinTech Fund in 2017. Likewise, Bahrain Development Bank and the Economic Development Board of Bahrain launched two separate funds of $100m each to support FinTech. This investment is slated to grow to a staggering $2 billion over the next few years (compared to $50+ billion globally), laying the foundation for large scale commercialization of such solutions. And it’s not only the regulators, but banks too have joined the race of investing in this space. The Emirates NBD, one of UAE’s largest banks, has stationed itself as the technology leader by releasing the Emirates NBD Future Lab. And along with this, they have also declared their commitment to invest AED 1 billion in the space (~USD 272+ million).
This region has some great FinTech stories to recite — PayTabs, Beehive, Aqeed, Durise, Beam Wallet, YallaCompare and the list goes on. What is remarkable is that most of these firms have spread their tentacles beyond GCC and have become large, global firms. The crowning glory in this exciting journey is the fact that countries like Bahrain & Saudi Arabia are going the distance to ensure that they become thriving FinTech destinations. In February 2018, Bahrain launched the ‘FinTech Bay’ which is the largest FinTech hub in the Middle East. In 2017, Bahrain Central Bank launched a dedicated fintech and innovation unit, including a regulatory sandbox, which provides a testbed for FinTech start-ups. Saudi Arabia on the other hand, with the support of the Saudi Arabian Monetary Authority (SAMA) launched the FinTechSaudi initiative in early 2018 with an aim to support the fintech ecosystem in the country.
I am sure, with the scale of investments rolling in, the future is going to be exciting for established FinTech’s or the ones trying to make a mark in this region for the first time. While there would be enough on the pie for everyone to take their share, as always, the customer is the KING and will eventually decide who stays. But there is still a long way to go for FinTech to peak in this region, and the journey has just begun. So, hop on & make hay while the sun shines!
