The nascent financial technology sector in the Middle East and Africa is set to capture 8 per cent of financial services revenue in the region by 2022, driven by demand for better customer experience.
With "huge" opportunity for growth, the regional FinTech industry still faces challenges including lack of funding, limited market reach, shortage of skills and inconsistencies in regulation, according to a report by New York-listed technology company Accenture and start-up accelerator FinTech Hive, an initiative of Dubai International Financial Centre.
"DIFC tripled its commitment to FinTech in 2018, and we have delivered on this promise by broadening our scope, bringing new partners on board and introducing dedicated streams for InsurTech, RegTech and Islamic FinTech," said Arif Amiri, chief executive of DIFC Authority.
The number of FinTech companies in the region grew ninefold in seven years to 839 last year from 91 in 2010 , presenting a "huge" opportunity for financial services companies, governments, businesses and customers, the DIFC said. Cities in the Arabian Gulf are working to establish themselves as FinTech hubs in the region. Dubai and Abu Dhabi are focusing on encouraging the start-up scene while Bahrain created a FinTech regulatory unit.
With a total of $67 million in FinTech venture capital funding, the UAE has been the top investment destination in the region since 2010. But of the $50 billion and more that has been invested in FinTech companies globally since 2010, only 1 per cent was directed to MEA, the report showed.
FinTech Hive said on Tuesday that it has completed the 2018 edition of its accelerator programme, which it launched in collaboration with Accenture.
The 12-week programme doubled the number of participating start-ups to 22 from 11 last year.
Earlier this month, FinTech Hive announced the expansion of its global partnership network through bridges with FinTech hubs in New York, London, Hong Kong, Kuala Lumpur, Singapore, Mumbai, Paris, Brussels, Holland and Bahrain, helping start-ups participating in the programme to gain further international exposure. DIFC recently launched an additional programme, in partnership with Startupbootcamp, dedicated to accelerating start-ups at an early stage.