Fringe to forward: Charting fintech’s journey in the UAE 

How do you see the growth of fintech in the region?
Technology is increasingly becoming a critical part of our lives and is an incredible enabler for many industries, including the financial sector. As a result, fintech has become an innovation driver, improved the efficiency and capacity of financial institutions, and brought many complex instruments and platforms to the masses while improving profit margins. While recent failures in the crypto market have deterred some investors, fintech’s development could lead to new giants that could provide a new type of infrastructure to the financial sector.

What are the challenges for the fintech industry in the UAE and the region?
The fintech industry could see some challenges regarding funding as international investors reacted to the deteriorating global economic conditions. In addition, the recent and successive incidents regarding cryptocurrencies have dented users’ confidence and could be an issue that companies in the sector need to overcome while the market recovers. This, in turn, has led to higher risks related to the possibility of seeing the emergence of stricter regulation.

What is the outlook for the financial industry in the UAE?
While the industry could see some pressure from the global economic slowdown, the solid local economy, the dynamic nature of companies established in the country, and the strength of the governmental efforts and initiatives could help boost the development of the financial industry. The sector could thus continue growing throughout the year, particularly if global economic conditions improve along the way.

How are government initiatives helping the industry to grow?
Initiatives launched by the local government to support crypto and metaverse firms have created strong incentives for fintech companies to invest and grow in the country. The vote of confidence in the industry has boosted business sentiment and backed the country’s willingness and capacity to grow in this regard.

Are government initiatives successful in attracting investors?
The legal framework and the decisions taken in favour of fintech have created a suitable environment for companies to bloom. This has led to a wave of migration, with many large fintech companies opting for the UAE as a global base of operations. Business-friendly laws and a large pool of talent have also significantly attracted firms and investors. The positioning of the country, and Dubai in particular, as a global hub has also contributed to enhancing its stature as a destination for companies in the industry.

Achraf Drid is the managing director at XTB MENA

Read: An overview of the Middle East fintech landscape