In this month’s Editor’s Question, Intelligent FinTech asks “What can we learn from the FinTech landscape in the Middle East?”
Rami Chedid, Chief Executive Officer of MultiPass for the UAE and the Middle East
Over the past decade, the Middle East has transformed into a hub for FinTech innovation with a combination of proactive regulatory frameworks, localised solutions, significant investment in digital infrastructure and a stable political environment. The region offers great lessons for emerging and established markets alike.
The forward-thinking approach of institutions has formed a favourable regulatory environment, which is one of the most notable aspects of the Middle East FinTech ecosystem. Regulatory sandboxes in countries like the UAE, Bahrain and Saudi Arabia allow FinTech startups to test their solutions in a controlled environment before full implementation. Whilst DIFC and ADGM are tailored to the needs of FinTech companies with clear, supportive regulation.
Financial inclusion is an important focus point as part of the population in the region has limited or no access to traditional banking. Gaps are filled by offering digital banking, Electronic Money Institutions, digital wallets and micro-financing options. In Egypt, substantial investments and a growing tech-savvy population have accelerated the development of inclusive financial services, highlighting the role of FinTech in levelling economic differences. Simultaneously, companies are adapting products to meet the cultural and religious needs locally. Islamic finance is where FinTechs have innovated, offering Sharia-compliant products, since localisation builds trust among consumers and ensures that FinTech solutions are relevant, increasing market penetration and user adoption.
The Middle East benefits from liquidity. Available capital has been crucial in fuelling growth of the FinTech sector, granting the necessary funding for startups and larger financial technology firms to innovate and scale. Sovereign wealth funds and private equity firms have actively invested, creating a robust financial ecosystem that supports continuous innovation. The region’s soft tax regime, particularly in the Gulf countries, has further attracted investors by providing favourable conditions for business operations and profitability.
Political stability in the region with governments showing commitment to economic diversification and digital transformation and collaboration between countries and financial institutions have promoted FinTech growth. Stability fosters investor confidence presenting a proper environment for long-term planning and development, while initiatives like Saudi Arabia’s Vision 2030 and Dubai’s Smart City programme enable innovation. Similarly, Turkey’s national FinTech strategy and Egypt’s investment in digital infrastructure have accelerated the adoption of FinTech solutions across various sectors.
The Middle East has proven successful in attracting global businesses and leveraging financial technology effectively. By adopting supportive conditions, access to capital and more importantly favourable regulatory framework there is an opportunity for other markets to follow suit.
Philip Alves, Founder and CEO, DevSquad
With extensive experience in developing over 100 SaaS products for a wide range of clients, I’ve observed how different regions innovate in the tech space. The Middle Eastern FinTech landscape, in particular, offers some unique lessons worth exploring.
One of the biggest lessons from the Middle Eastern FinTech ecosystem is the ability to rapidly adapt to market needs. In my experience, the region’s FinTech companies are not bogged down by legacy systems or outdated practices, allowing them to pivot quickly in response to market changes and customer demands. For example, in countries like the UAE and Saudi Arabia, FinTech firms have effectively leveraged mobile technology to offer digital banking solutions that meet the needs of their largely young, tech-savvy populations. This agility is something that can serve as a valuable lesson for other regions, particularly those with more established financial systems that may be slower to innovate.
Another aspect that I think is particularly commendable about the Middle Eastern FinTech landscape is its focus on customer-centric innovations. Companies in the region are deeply attuned to the unique needs of their local markets, often creating solutions specifically tailored to address regional challenges. For instance, there is a strong emphasis on providing financial services to the unbanked and underbanked populations, with FinTech firms developing products that are accessible even to those without traditional bank accounts. This focus on inclusivity not only drives customer engagement but also contributes to greater financial stability and empowerment. In my opinion, this level of customer-centricity is something that FinTechs globally can learn from, as it highlights the importance of understanding and directly addressing the needs of the customer.
I believe that another key learning from the Middle Eastern FinTech scene is the strategic regulatory approach that countries in the region have adopted. Governments in the Middle East have created supportive environments for FinTech innovation by establishing clear regulatory frameworks and launching regulatory sandboxes. These initiatives allow FinTech companies to test new technologies and business models in a controlled environment, minimising risks while promoting innovation. For example, Bahrain’s FinTech Bay and the UAE’s FinTech Hive have become hubs for experimentation and growth, attracting international players and fostering a spirit of collaboration and innovation. This balanced approach of encouraging innovation while maintaining regulatory oversight can be a model for other regions looking to develop their FinTech sectors.
Lastly, I think the Middle Eastern FinTech sector teaches us the value of collaboration over competition. Many FinTech firms in the region actively seek partnerships with traditional banks, telecom companies, and even government bodies to extend their reach and scale their solutions more effectively. This collaborative approach allows FinTechs to leverage existing infrastructure and expertise while bringing innovative solutions to market. At DevSquad, we’ve always emphasised the importance of strategic partnerships in SaaS development, and it’s inspiring to see how this mindset is driving growth in the Middle Eastern FinTech space.
Jon Morgan, CEO and Editor-in-Chief of VentureSmarter
A notable feature of the FinTech landscape in the Middle East is the region’s swift adoption of digital payments and financial technologies. This rapid transition is fuelled by a tech-savvy, young population and a proactive approach from governments. The UAE, for example, has launched numerous initiatives to support digital finance, such as its ‘FinTech Hive’ accelerator programme, which brings together startups, investors and regulators. Saudi Arabia is similarly pushing forward with its Vision 2030 plan, which highlights technology and innovation as central to its economic strategy. These efforts have created a dynamic ecosystem where both new ventures and established players can thrive, demonstrating how supportive policy frameworks can accelerate FinTech growth.
The Middle East is also notable for its strategic use of partnerships and collaborations. FinTech companies in the region work closely with traditional banks, government bodies and international tech firms. These partnerships help to accelerate innovation and bring new products to market more quickly. It’s a model that other regions could learn from, as it combines the strengths of different sectors to drive progress. For example, collaborations between FinTech startups and established financial institutions have led to the development of innovative solutions that cater to the unique needs of the local market, such as Sharia-compliant financial products.
However, the region’s diverse regulatory environments present a huge challenge. You see, each country in the Middle East has its own set of rules and standards for financial services, which are quite complex for businesses aiming to operate across borders. For example, while the UAE’s regulations might be favourable, dealing with the financial landscape in neighbouring countries can be quite different. This regulatory fragmentation can make it difficult for FinTech companies to scale regionally and requires careful planning and local expertise. Moreover, businesses must contend with varying levels of regulatory maturity and enforcement, which can impact operational efficiency and compliance costs.
Consumer trust and financial literacy also remain areas of concern. Despite the impressive technological advancements, many consumers in the region are still adapting to digital financial services. Building trust in new technologies and platforms is crucial for widespread adoption. For example, while digital wallets and payment apps are becoming more popular, there’s still a need for ongoing education about their security and benefits. Addressing these gaps in financial literacy and trust will be essential for sustained growth in the FinTech sector.