Dubai: Fintech helps DIFC grow faster than emirate’s overall economic growth – News
Last year, DIFC-based Fintech and innovation firms raised over $615 million (Dh2.25 billion) in funding
Read more…
Financial technology (popularly known as Fintech) has become a major growth driver for the Dubai International Financial Center (DIFC), helping it to grow faster than Dubai’s overall growth rate.
Essa Kazim, Governor of DIFC, said the financial center has become an important growth engine for the emirate’s economy and a significant contributor to GDP.
“It has grown five times faster than the average GDP growth in Dubai over the past 10 years, contributing around six percent to GDP. A key growth driver over the past three years has been Fintech and innovation companies, which have contributed over 27 percent of the center’s overall customer growth,” Kazim said while delivering the welcome speech at the Dubai FinTech Summit 2023 in Dubai on Monday.
He credited the strong growth of the sector to DIFC’s heavy investment in the Fintech ecosystem by creating a supportive and flexible regulatory framework, which provided access to funding, sandbox environments and resources for both start-ups and established companies.
Last year, DIFC-based Fintech and innovation firms raised over $615 million (Dh2.25 billion) in funding.
According to the DIFC FinTech Hive’s 2022 report, the Fintech sector is expected to double in size from over US$135.9 billion ($499 billion) in 2021 to close to US$266.9 billion in 2027 across the Middle East, Africa and South Asia – the region.
The Mena region’s Fintech startup and venture capital landscape is booming, with over 800 Fintech startups worth $15.5 billion, according to data from dealroom.co. Dubai alone is home to over 20 percent of the world’s Fintech companies, according to the UAE Fintech Market – Growth, Trends, and Forecasts (2023 – 2028) Report by Mordor Intelligence.
Globally, the Fintech sector is forecast to be valued at $305 billion by 2025, said Research and Markets, an intelligence and market analysis firm. Digital payments have grown exponentially in the UAE and the region, especially after the pandemic.
Another survey released by global consultancy McKinsey revealed that 58 percent of consumers in the Middle East expressed a strong preference for digital payment methods, while only 10 percent strongly preferred cash.
A survey conducted by Oxford University found that 40 percent of the Mena region’s adult population is currently unbanked or underbanked, providing huge opportunities for growth in the payments and cross-border payments sector.
“Not so long ago, the concept of AI (artificial intelligence) was pure fiction. Today, however, it has become one of the most popular ways to innovate in the financial world. Concepts such as embedded finance, open banking and blockchain have taken the banking and finance world by storm storm, said the DIFC Governor.
