Why UAE-Based Fintech Companies Are Looking At Global Expansion

Meta: Here are some of the principal reasons why the United Arab Emirates (UAE) is becoming an important location for the world’s fintech industry.

The United Arab Emirates (UAE) is currently working overtime to become one of the world’s major hubs for the fintech industry. Here, you can find out some of the different ways that UAE is trying to establish itself as a major player and expand globally within the industry.

The UAE Minister of State for Artificial Intelligence, Digital Economy and Remote Work Applications – H.E. Omar bin Sultan Al Olama – has recently been on the record as saying that the United Arab Emirates offers the ultimate springboard for entrepreneurs of the fintech sector from around the world to flourish. The country is already well on its way to becoming one of the world’s leading hubs for the fintech industry.

The aim is to create more expansion, development, and growth via the implementation of pioneering startups that can operate within a supportive trading environment and modernised network. It can help them develop new platforms that can be successful on a global scale while, at the same time, making the world of finance much easier and more accessible to millions of people around the world.

What exactly is a fintech company?

One of the main purposes of a fintech company is to make financial services easier to navigate. These companies use new technology breakthroughs and their related infrastucture to compete with traditional financial methods in the delivery of financial services. For example, traditional banking services, savings, loans, paying bills, and even trading in cryptocurrencies or commodities, such as currency, gold and oil, plus crowdfunding in an online capacity, can become far more accessible than ever before.

The services offered by a fintech company are mainly web-based with cloud services or software technology-focused, which can be accessed by anyone with a modern computing device, such as a smartphone, tablet, laptop, or desktop computer, and a stable internet connection. The ABCD of financial technology includes Artificial Intelligence, Blockchain, Cloud Computing and Big Data.

Fintech’s Third Party Providers (TPPs) also help customers to process smoother transactions in a more seamless way, and enable faster and more secure payments directly from a customer’s bank account. It’s similar to the way e-Wallets, cryptocurrencies and other innovative new payment solutions enable people to purchase goods online, or deposit and withdraw at licensed online casino sites and other trusted online merchants.

How many fintech companies are currently based in the United Arab Emirates?

At the time of writing, there are more than 135 individual fintech companies headquartered in the UAE, and these companies are home to over 2,000 employees. Many of these fintech companies are startups which are more dedicated to encouraging the use of technology to create a fully inclusive system. Over the past few years, there has been heavy investment in the fintech sector in the UAE, which has led to steady market growth, and some of the main fintech companies that are helping to drive growth in the UAE are Beehive, Sarwa, YallaCompare, Tabby, and Sehteq.

What is driving fintech investments in the UAE?

As more fintech businesses continue to pop up in the country and spread their wings to further countries, it naturally promotes more success in the greater area and enables the UAE to expand on a global scale. As well as the opportunity for startups to prosper, it also attracts the more established fintech companies to use the Emirates as a base of operations.

It can also be described as a launchpad for success, and fintech businesses are already benefiting from being able to operate within strengthened and supported networks thanks to the help of government initiatives. The UAE central bank recently announced a new plan over the next three years to bring about digital currency as a way of transforming the financial services sector. The driving force behind this will be big data and AI (Artificial Intelligence).

Additionally, the country also recently unveiled the DIFC Innovation Hub to help stabilise the infrastructure of the fintech sector and that it would help in many ways to promote growth and expansion of developing industries.

Fintech’s global expansion

With so much government-backed help and support for startup fintech companies, it’s no wonder the industry is booming, and these now successful companies are looking at global expansion.

A relatively new study by the World Bank revealed that the fintech industry had grown by 13%  compared to a similar study in 2019. Unsurprisingly, a majority of this growth came from developing countries in the industry instead of their developed rivals.

Also, since the world events in 2020, online e-payments and purchases have increased, multiplying the growth of fintech companies. The current predictions are that the market will grow each year by up to 12% over a 5-year period from 2021 to 2026.

Therefore, it would be wise to expect a lot of new partnerships between existing businesses and new startups. It’s also likely that there will be probable merging over the next few years, thus all adding to place the UAE as a fintech industry leader that is looking to expand globally.