Fintech, innovation drives DIFC growth in 2022 – News
Fintech and innovation was the fastest growing sector in the DIFC with 291 new customers. A total of 686 fintech and innovation firms, ranging from start-ups to global unicorns, are now based in the DIFC
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The Dubai International Financial Center (DIFC) said on Monday it recorded 20 per cent year-on-year growth in active registered companies as strategic plans aimed at promoting the scale and depth of value-creating innovation created by the DIFC community proved a great success.
During a media briefing in Dubai, DIFC’s top executives said new companies registered at the center surpassed the annual milestone of 1,000 for the first time when they registered 1,084 new firms last year, while the total number of active registered companies rose to 4,377 from 3,644 in 2021.
DIFCs recorded over Dh1 billion in revenue for the first time as it recorded an 18 per cent year-on-year revenue growth to Dh1.06 billion from Dh897 million in 2021.
Operating profit also increased by 19 per cent to Dh679 million last year compared to Dh573 million in 2021, while total assets passed Dh15.3 billion, reflecting DIFC’s strong financial position.
The number of employees at DIFC increased by 22 percent to 63,083 workers in 2022.
His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates and Ruler of Dubai, said that DIFC’s exceptional performance in 2022 demonstrates Dubai’s growing role as a key driver of innovation, entrepreneurship and next-generation technologies in the region’s financial economy. sector.
“The Centre’s performance reflects its ability to keep pace with global economic changes and the rapid evolution of the world’s financial landscape, providing a platform for financial companies to exploit new opportunities. DIFC’s growth contributes significantly to the objective of the Dubai Economic Agenda D33 to transform Dubai to one of the world’s top three cities for doing business, Sheikh Mohammed said.
Essa Kazim, Governor of the DIFC; Arif Amiri, Chief Executive of the DIFC Authority; and other officials at the media briefing in Dubai on Monday. — Attached picture
He said the Dubai International Financial Centre’s results for 2022 also reflect the growing demand for a supportive ecosystem from global businesses looking to scale into emerging economies with high-growth financial services markets.
“With financial technology becoming a key growth catalyst across sectors, the UAE’s ambitious initiatives to drive the future of finance will create enormous opportunities and new economic growth not only in our region, but also across the world,” said Sheikh Mohammed.
Banking, insurance funds
The center also recorded its best ever performance in additional net commercial space leased with 809,000 sqft leased compared to 349,000 sqft in 2021.
“Total bank assets on book in the DIFC remained stable at $199 billion, while a further $166 billion in lending was also arranged by DIFC firms, reflecting growth of 54 per cent,” according to the DIFC statement.
The DIFC is home to 17 of the world’s top 20 banks, 25 of the world’s top 30 systemically important global banks, five of the top 10 insurance companies, five of the top 10 asset managers and many leading global legal and consulting firms.
As a global hub for wealth and asset management in emerging markets, DIFC portfolio managers invested $164 billion in 2022 compared to $151 billion in 2021, while venture capital raised increased to $1.2 billion, up 78 percent.
Gross written premiums for the insurance sector reached $2.1 billion, up from $1.8 billion in 2021, the statement said.
Contribute to global industry
The center leads MEASA in contributing to global industry development by being home to the largest clusters of banking and capital markets, fintech, insurance, wealth and asset management and professional services companies in the region. Strong growth has continued across business sectors, including banking, capital markets, wealth and asset management and professional services.
DIFC-based fintech and innovation companies attracted over $615 million in 2022. Fintech and innovation became the fastest growing sector in the DIFC with 291 new clients. A total of 686 fintech and innovation firms, ranging from start-ups to global unicorns, are now based in the DIFC.
A total of 1,369 finance and innovation-related entities are now active and operating within the DIFC, an increase of 22 percent from 2021, while 291 new fintech and innovation firms joined in 2022, bringing the total to 686, an increase of 36 percent.
The number of Dubai Financial Services Authority (DFSA)-regulated financial entities grew to 590 with 89 regulated financial services firms approved in 2022, up from 51 in 2021.
Notable firms joining DIFC in 2022 include ADIB, BIC-BRED, Continental Group International, fintech unicorn Darwinbox, Jefferies, Habib Bank AG Zurich, Lord Abbett, 1291, Prevensure, Proton, Sculptor Capital Management Hong Kong Limited, 3S Money, United Bank of Africa Group and Volante.
Essa Kazim, Governor of the DIFC, said that Dubai’s economy continues to grow and that the DIFC is proud to be a notable contributor to the emirate’s GDP and a key creator of employment.
He said the UAE’s globally recognized management of the pandemic, strategic investment and business-friendly structural reforms, long-term residency schemes and innovation-friendly regulations have helped draw entrepreneurial talent from every corner of the world.
“Our focus in 2023 will be to accelerate the economy of the future by building on our already strong position as a preferred gateway for companies looking to expand into and grow within the massive Middle East, Africa and South Asia (MEASA) market and attract more investment into the UAE’s financial sector,” he said.
Kazim said the DIFC has around 60 hedge fund firms, with north of a trillion dollars in assets under management, waiting to be licensed. “A few have already been licensed,” he said.
Millennium Management, ExodusPoint Capital Management and BlueCrest established themselves in Dubai last year, just three of the many funds attracted by lower license fees and capital requirements for the industry.
“The hedge fund industry is taking advantage of new rules and regulations designed to support the sector, which is one of the sources of DIFC’s growth,” Kazim said.
Unique opportunities for startups
Arif Amiri, CEO of the DIFC Authority, said the DIFC’s comprehensive fintech and innovation proposition has created unprecedented opportunities and success for start-ups, global players and unicorns.
“Our growth in customers continues to be strong across all sectors. But we continue to be excited by the high number of financial firms and fintech and innovation clients using the DIFC as a platform to grow faster than the market,” he said.
“We are confident that DIFC’s approach will continue to elevate Dubai’s reputation as a hub for technology and innovation, and further strengthen our position as a global center for financial services,” he said.
Firms within the DIFC manage assets worth $445 billion, underscoring Dubai’s reputation as a safe and secure investment destination as well as a preferred global financial centre. The DFSA and DIFC’s globally recognized levels of transparency and governance have helped attract some of the world’s most renowned financial firms, such as Goldman Sachs, Morgan Stanley and BlackRock.
A future-focused financial centre
DIFC maintained its position as the leading financial center in the region in the Global Financial Center Index rankings and achieved its highest increase in its global ranking in the Green Financial Center Index.
In 2022, DIFC partnered with the Global Ethical Finance Initiative (GEFI) to launch the first industry-led program ahead of the UN Framework Convention on Climate Change’s 28th Conference of the Parties (COP28) to be held in Expo City Dubai.
The road to COP28 will drive change across the world’s financial industry linked to delivering Net Zero; unlocking Islamic finance; financing of nature and biodiversity; and financing sustainable development goals. As the host financial center for the Path to COP28 programme, DIFC is supporting a range of report launches, roundtable discussions, training programs and community engagements in the run-up to the event.
In 2022, DIFC continued to develop its position as one of Dubai’s leading lifestyle destinations. Access on Gate Avenue increased to 10.34 million, reflecting a year-over-year increase of 71 percent.
