In recent years, the GCC region has solidified its status as a hub for financial technology (fintech). However, according to a new report, the region must continue to build on the momentum by supporting fintech entrepreneurs, easing access to venture capital (VC), and developing new plans to address the growing digital talent shortage.

According to a report by Strategy& Middle East, fintech centers have sprouted up all across the region, backing innovative small businesses. The overall amount of late-stage funding rounds in 2021 was $2.5 billion, about twice as much as it was in 2015.

The Abu Dhabi Global Market, Bahrain Fintech Bay, Fintech Saudi, and the FinTech Hive at the Dubai International Financial Centre are among the GCC’s expanding number of fintech hubs, which have increased from only one in 2018 to four in 2022.

The report claims that a supportive regulatory framework has contributed to the region’s fintech success. National fintech plans have been developed, and government-sponsored accelerators and incubators have been established in Bahrain, Saudi Arabia, Qatar, and the UAE. 

Government financing is readily available, and there is extensive access to broadband, including a high smartphone penetration rate. Regulatory “sandboxes” have provided space for experimentation.

The region should, however, be active. “Despite encouraging growth in the fintech sector over recent years, the challenge for GCC countries is to build on this momentum if the sector is to become stronger and more sustainable,” said Jorge Camarate, partner with Strategy& Middle East, and the leader of the firm’s financial services practice.

He added that the sector has enormous potential for widespread socioeconomic impact beyond financial services and, as such, has the potential to increase economic diversification and sustainable economic growth.

Fast Company’s World Changing Ideas comes to the Middle East on 23 November 2022. Click here to know more.