What’s Powering the Fintech Revolution in the Middle East?
For the past couple of years, the Middle East has been a hotspot for digital and fintech revolution. It has been changing the financial landscape of the region phenomenally. Fintech solutions has made the market more dynamic, spontaneous, and heavily diverse. It has actually helped to demolish the monopoly of big players and gave an opportunity and very conducive platform for multifaceted players to come to the fore.
Young and fledgling financial institutions that come packed with technology-empowered solutions are now competing with well-established players on an equal footing. Their innovative solutions cover a gamut of areas including payments, lending services, and wealth management.
The market is so opportune and teeming with so much untapped potential that the local governments found it irresistible not to enter the fray. They have come with attractive schemes and initiatives to ensure that they encourage the fintech boom and also brought in effective regulations in place so that all stakeholders needs are catered to. Governments realize that a wide-scale fintech revolution cannot be achieved without winning the end user into confidence.
MENA is so abuzz with fintech innovations and multi-pronged strategies, and emboldened by the unhindered support of local governments, there was no way that the traditional banks could feign ignorance of this disruptive change that has engulfed the region.
Traditional banks hopped onto the bandwagon and clinched the deal for a complete fintech revolution. All these favorable conditions contributed to the heavy increase in fintech investment. Cash flow bonanza was inevitable!
The best part of all this is that digital transformation has catalyzed financial inclusion that was always a chimera, an illusion that can plausibly never be achieved. And in addition to the huge benefit of drawing the unbanked population to the fold, innovative payment solutions aid in pandering to the needs of the young and tech-savvy digital populace.
So, what do you think is actually facilitating this fintech revolution?
Exponential Rise in Digital Banking in the Middle East
Fired by technological innovative solutions, digital banking has skyrocketed, and Financial Institutions have joined the race to greater digital adoption to serve the customers with the best tailor-made solutions to meet the unique demands of every end user. Did you know that the UAE is a digital banking hotspot in the MENA region with 9 digital banks. Following close on heels is Turkey with 4 players, and Saudi and Israel follow right behind with 3 players each.
Payment and banking trends in Middle East
The smartphone and internet penetration in the MENA region has been mindblowing. With more and more customers preferring cashless payments than traditional modes of payments. The population of mobile banking users are expected to breach 150 million users by 2023, that is an astounding 11% increase.
Power of Digital Data
It is least surprising that with an overwhelming surge in digital payments globally, a wealth of digital payments data is generated. This data can be leveraged to drive greater growth, innovation, and revenue generation. It helps in reducing manual labor, thereby reducing errors, ensures greater efficiency and uncompromised accuracy of payment processing.
Heavy Fintech Investment
Did you know that a lion’s share of Fintech investment flowing heavily into the MENA region in the past decade has been singularly focused on digital payments. The UAE, Bahrain, Saudi, Egypt provide highly favorable conditions for fintech growth. Smart initiatives like free zone establishment, like the DIFC or Dubai International Financial Centre have given great fillip to the digital economy.