The UAE's fintech sector sees plenty of potential for healthy growth
- Several spaces present opportunities for fintech players to disrupt the financial services market
- Dubai is attracting more founders from emerging digital economies
Due to the legacy financial services market structure, traditional finance has been slow to innovate and has relied on limited competition for pricing power. There are still some great spaces for founders to target to disrupt the status quo. Business banking, remittances, credit card issuance, SME finance, open finance, consumer finance, mortgage lending, trade finance, and vertical neobanks present significant opportunities for founders to disrupt legacy players.
Financial services are still linked very strongly to residency in the United Arab Emirates which is a significant limitation in a world of digitally connected, mobile global citizens. With the emergence of borderless neobanks and decentralized finance, the United Arab Emirate’s traditional finance institutions are facing a situation of innovate or perish. There is an urgent need to delink residency from financial service provision – like Switzerland, for example – to really take the market to the next level. Decentralized finance is really going to challenge this dated policy direction.
Dubai is attracting more founders from emerging digital economies in Southeast Asia, South Asia, and Africa using it as a base for global growth. The Golden Visa, soft landing programs, and policies that support digital nomads are a key attraction.
There is much more work to be done to support founders opportunistically domiciling in the United Arab Emirates to expand deeper into the MENA. The majority of global founders who set up in the United Arab Emirates don’t expand to other MENA countries – including significant neighboring markets like Saudi Arabia. There is also significant opportunity to attract Indian startups which can both target India’s huge market and the GCC. The UAE’s competitiveness in the fintech space is going to depend heavily on attracting founders from India’s much larger developer ecosystem.
With the emergence of borderless neobanks and decentralized finance, the United Arab Emirate’s traditional finance institutions are facing a situation of innovate or perish