August has already been quite the month for fintech in the UAE. Abu Dhabi Global Market began the usually quiet month with a torrent of partnership agreements, as part of its long-running ambition to become the most fintech-friendly financial centre in the region.
Yesterday the DIFC reminded everyone of its own ambitions in the space, with the announcement of the first 11 startups selected to participate in its FinTech Hive accelerator programme, selected from over 100 applications from 30 countries.
The 11 companies – including Bridg and Sarwa from the UAE – will now undergo a 12-week mentoring programme culminating in the opportunity in November to pitch their ideas to local banks, investors and government agencies for potential investment.
The ambitions of both freezones highlight the importance of fintech for the UAE as a whole; the region’s largest financial institutions, many of which are participating in the FinTech Hive programme, are keen for the knowledge transfer process to go both ways, in the process gaining insight on how fintech can help them modernize their business practices.
At the government level, there is an imperative to build an ecosystem that is attractive as possible to fintech entrepreneurs, so as not to lose out to growing incubation centres in the UK, Singapore, US and elsewhere. DIFC’s FinTech Hive partner Accenture notes that of the more than US$50 billion invested in Fintech companies since 2010, only around 1 per cent of that money has found its way to the Middle East and North Africa.
DIFC governor Essa Kazim insisted to The National that the fintech ambitions of the DIFC and ADGM (which offers RegLab, a two-year ‘sandbox’ programme for fintech entrepreneurs) complement rather than compete with one another. On the less complementary side however are similar initiatives launched by Bahrain, which has also declared its intention to be the region’s fintech hub.
Such competition should act as a spur for the DIFC, ADGM and other entities across the country to intensify their efforts and make the UAE the place to go for fintech in the region. The competition to attract the best and the brightest will be intense, both in the region and beyond. But the reward for embracing fintech and its practitioners for UAE’s government and banks promises to be huge.