Today, every company wants to be a fintech company. And it’s easy to see why. In 2025, fintech funding jumped 80 percent year-on-year to $1.14 billion, making up 26 percent of total MENA VC deals, up from 20 percent in 2024. Tabby’s $160 million and Hala’s $157 million rounds were among the biggest last year.

No doubt, it is one of the hottest sectors in the region, to the point where venture capitalists joke that founders can draw a check just by mentioning “financial services” in their pitch deck.

Venture capitalists have bankrolled every possible fintech fad: from peer-to-peer lending to buy-now-pay-later. This is partly why fintech has been the most-funded segment of the startup ecosystem over the last few years.

GROWTH DRIVERS

“The fintech sector in the MENA region has witnessed significant growth over the past few years, with the number of fintech companies now exceeding 1,000, including four unicorns,” says Vijay Valecha, CIO, Century Financial.

Globally, fintech grows faster than most sectors because it digitizes large, inefficient financial markets with software-like scalability and strong unit economics, says Armineh Baghoomian, Managing Director, Head of Europe, Middle East and Africa, Co-Head of Global Fintech at Partners for Growth. “In MENA, that growth tends to be amplified by underpenetrated financial services, rapid digital adoption, and supportive regulators aligned with Vision 2030-style agendas.” 

Saudi Arabia’s National Fintech Strategy 2030 is advancing the country’s goal of becoming a fintech hub. At the same time, Dubai’s DIFC Innovation Hub and Abu Dhabi’s ADGM are speeding up open banking frameworks that link fintech platforms with traditional banks.

“The expat populations from these countries contribute to large remittance flows to their home countries, auguring well for low-cost fintech providers of cross-border cash transfers. Moreover, the rise of multiple BNPL platforms is gaining traction, making it easier for users to access credit for discretionary spending,” says Valecha

But will fintech still be as lucrative a bet in 2026? Will the boom continue?

“The boom will persist, but much more selectively,” says Baghoomian. “The winners will be those with defensible distribution, disciplined risk management, and clear paths to profitability rather than growth driven by subsidy or rate arbitrage.”

A 2025 Emirates NBD & PwC report forecast that the fintech market in the UAE would grow to $5.71 billion by 2029.

In the UAE, Nicholas Wright, Head of Institutional Sales at Saxo Bank MENA, says investors want digital, low-cost, and regulated ways to access markets, while regulators are supporting innovation in areas such as digital assets and trading tools without compromising trust. “With this combination of clear rules and innovation, fintech-driven trading in the UAE is likely to continue growing steadily, rather than being a short-term trend.”

Valecha says the fintech boom in MENA is expected to be the fastest globally. He adds that revenue from the sector is expected to grow 35 percent annually through 2028, more than double the global average of 15 percent. “One of the main reasons for this is the low share of fintech in the overall banking sector. The GCC’s fintech share of banking-sector revenues represented only 1 to 2 percent, compared with 3 to 5 percent in the US and UK. This is expected to catch up, adding tailwinds for the sector.”

He says GCC capital markets are offering strong support for fintech firms, from local family offices expanding to global venture funds. “Investor confidence is further raised by clear exit options via bank acquisitions or the ongoing public listing trend.”

CHALLENGES AND COMPETITION

Still, there are challenges. Expanding products and entering new markets carry execution risks, along with operational and regulatory complexities.

“Each market has its own regulator, licensing model, and domestic payment schemes,” says Ali Abulhasan, Co-Founder & CEO, Tap Payments. “Scaling is not a simple product rollout. It is an infrastructure problem.”

Baghoomian says the more significant and structural challenges surround distribution, regulation, and unit economics at scale. “Adding products is easy, but making sure that it is done profitably and across cycles is not. Expanding into new geographies looks very appealing, especially in MENA, but each market brings licensing, balance sheet, and compliance complexity that can quickly erode economics.”

“The winners will scale with strong core economics, regulatory fluency, and embedded distribution. Expansion, whether geographies or products, can then come,” adds Baghoomian.

There’s also intense competition, says Abulhasan, especially in payments where switching costs may seem low at first glance. He adds that long-term winners will be those who “balance automation with trust. 

THE FUTURE OF FINTECH

The future of fintech will depend on how well companies balance AI-driven automation with cybersecurity, building trust as fast as they develop technology. As competition grows and markets shift toward winner-takes-most, especially in payments, embedded finance, and lending infrastructure, Baghoomian says products will become commodities. When that happens, the edge will come from trust, resilience, and flawless execution at scale.

Right now, fintech investment is focusing on core payment systems and infrastructure that provide steady income from acceptance, compliance, risk, and settlement, says Abulhasan. Investors prefer strong unit economics over new, unproven products, and licensed infrastructure providers benefit from high barriers to entry and long-term contracts. 

In 2026, he adds, “The boom will continue, but with fewer bets, more consolidation, and growth driven by infrastructure scale rather than consumer experimentation.”