11 February 2021
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Fintech: The UAE Ecosystem

Setting the background of where the UAE stands in the regional fintech space.


By Emirates NBD Research


The UAE has rapidly established itself as a leading hub for fintech startups in the MENA region. According to a report by Abu Dhabi Global Market and Magnitt in in late 2019, the UAE leads the region on a number of parameters, hosting 46% of fintech startups, accounting for 47% of all fintech deals, and 69% of all funding in MENA. A strong and dynamic ecosystem, a robust legal framework, private capital availability, and human capital are all key factors in the UAE’s success. However, competing fintech ecosystems are rapidly rising in the region, with Saudi Arabia, Bahrain, Egypt as key competitors that are supported by strong government initiatives and private sector funding to boost the industry. For the UAE to maintain its lead, it needs to continually adapt its ecosystem be it regulatory or funding to address the changing dynamics and trends of the fintech sector.

Government support has played a differentiating role in the success of the UAE’s fintech initiatives. The UAE has issued a number of national level strategies revolving around blockchain technology and artificial intelligence (AI). In 2018, the UAE launched Emirates Blockchain Strategy 2021, which aims to turn 50% of government transactions to blockchain within three years. This includes e-payment services, an opportunity for fintech firms. In 2019, the UAE government began implementing its National Artificial Intelligence Strategy 2031, which seeks to invest in the latest AI technologies and tools to improve government performance and efficiency. Given the synergy of applications of AI to fintech, this is certainly another catalyst for the sector. The Abu Dhabi Global Markets (ADGM) and Dubai International Financial Centre (DIFC) have created ecosystems in which fintech startups can flourish. Meanwhile, regulators including the Central Bank of UAE and the Securities and Commodities Authority (SCA), have adopted polices supporting the sector: in 2019 the central bank established a dedicated fintech office to develop national regulations for financial technology firms.

In this note we first look at the existing ecosystem in the UAE. Secondly, we highlight some of the private and public/private sector initiatives that have acted as accelerator platforms for fintech startups in the UAE. Finally we look at the scope for fintech growth in the wider MENA region. The goal is to set the background of where the UAE stands in the regional fintech space, and we plan to follow this with other notes that will give depth to new fintech solutions coming out of the UAE, disrupting traditional financial solutions and creating new opportunities.

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Emirates NBD Research Research Analyst

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