You may have heard of the term “FinTech” but have not got into detail about what it means. So, before we explore FinTech in Dubai, let us first establish the meaning of FinTech.
What is FinTech?
FinTech means financial technology, which comprises different technologies that are channeled towards facilitating financial processes, operations, and services for financial and non-financial businesses, companies and individual clients.
FinTech makes it possible for financial services to be delivered and carried out quickly and efficiently for clients, whether said clients are companies or individuals.
This concept may still be abstract, so FinTech is better clarified with examples. When comprehending FinTech, think of the following:
- Mobile Banking.
- Mobile Payments.
- Cryptocurrency and Blockchain.
- Digital Lending and Credits.
Those are just to mention a few.
FinTech in the UAE
FinTech in the UAE is promising thanks to its already fast-growing start-ups within the sector. According to the IBS Intelligence report, 50% of the region’s FinTech companies are located in the UAE.
In addition, and as stated by FinTech News Middle East: UAE FinTech Report 2021, there are 134 active FinTech companies in the UAE, most of them being in the payment sector.
FinTech in Dubai
There is no wonder that FinTech is in demand in Dubai because the emirate of Dubai is an international centre for companies, businesses and firms that require special financial services, which are best provided and facilitated by FinTech.
FinTech is a key element in advancing the financial sector in Dubai and supporting it so it prospers and thrives.
On the regional level, Dubai comes second regarding the FinTech sector, and even though it is on the 55th place globally, Dubai is expected to develop said sector, which is motivated by DIFC, Dubai International Financial Centre.
The Role of DIFC in FinTech
DIFC is at the core of many services within the financial sector, such as brokerage, wealth management, asset management, private equity and FinTech, which are all part of DIFC that works as a connecting link between markets, companies and individuals in the Middle East, Africa and South Asia.
DIFC has launched many initiatives to further enhance and develop FinTech in Dubai, and some of them are:
1. FinTech Hive at DIFC
Functioning as an accelerator, DIFC’sFinTech Hive is essentially a FinTech ecosystem that connects DIFC’s firms (around 2300 active firms) with FinTech firms within DIFC and from around the world. The ecosystem has long-lasting partnerships with 100 partners to partake in the growth of FinTech in Dubai.
2. Commercial Licensing for FinTech Firms
This dedicated commercial license is especially devoted for FinTech firms in order to enable them to operate efficiently in DIFC. This is especially beneficial for start-ups, as DIFC provides world-class infrastructure and regulatory independent law workframe that creates many advantages for all operating firms at the Centre.
3. Innovation Testing License (ITL)
In order to encourage innovation and creativity, this license is aimed at providing a controlled environment for FinTech firms so that they can test their FinTech ideas without being subjected to regulatory requirements that would have been in place if it were not for the independent regulatory body of the Centre, the Dubai Financial Services Authority (DFSA).
FinTech is a key component of the future of financial services, and FinTech in Dubai is surely heading towards further prosperity and success, which is in part driven by DIFC.