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4 trillion industry: financial technologies on the rise

**The financial sector is undergoing a fundamental and unique transformation. In particular, the financial technology sector, or FinTech for short, is on the rise worldwide. We take a closer look at the industry that generates €4 trillion annually and find out why Dubai is set to become a hotspot for fintech start-ups and investors.
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Faced with rising inflation, interest rate hikes and political uncertainty, the global economy is in a difficult phase. Nevertheless, one sector has been able to stand out – the financial technology sector. This generally refers to software, technology and mobile applications developed to enhance and automate traditional forms of finance.

Dubai International Financial Center – Finance in transition

The most advanced financial technologies were showcased at the Dubai International Financial Centre – DIFC’s FinTech Week. The thought leadership conference looked at the latest opportunities, challenges and technology trends. The event was opened by the director of the DIFC.

Essa Kazim emphasises that finance is undergoing a transformation – driven by digital technologies and innovations that are changing payments, credit insurance and wealth management. According to him, FinTech is the fastest growing sector for the DIFC, contributing more than 35% to the total number of companies that were established last year.

The DIFC director also explains that they have created a comprehensive ecosystem, from incubator to accelerator to providing the right funding and innovation testing licence. In parallel, they have worked to create the necessary legal environment, with best practices and international standards.

From technical tools to presentations and panel discussions. The event brings together investors and companies looking for dynamic solutions for the FinTech sector. Experts at the event are convinced that Dubai will become a starting point for global entrepreneurs looking to expand into regions in the Middle East and Africa. The sector is in rapid growth and MENA FinTech Association Chairman Nameer Khan stressed that our daily lives are surrounded by innovations that come from the FinTech industry.

The Future of Finance

Nameer Khan explains that FinTech is basically about enabling financial services. FinTech makes them invisible, transparent and most importantly, very affordable. From paying with the tap of a finger to buying a product online – everything is seamless and convenient, says Khan.

It is not only in finance that technological progress is making itself felt. Digital technologies and innovations are also on the rise with regard to administration. Digital governance is expected to be helpful not only from the government’s perspective, but also in terms of citizens’ access to more efficient and effective services.

Amazon gave the industry in Dubai another boost in June with the opening of its FinTech Lab, a centre for digital innovation and creativity in Dubai’s financial and fintech hub. Working with startups and small to medium-sized businesses, the aim is to support new programmes and ideas and promote knowledge of digital payments globally. However, access to finance remains a top priority for start-ups.

Sharif El-Badawi, the managing director of Dubai Future District, explains that for him it is about where these technologies and all the buzz you hear about FinTech will lead – especially in the next two years. He believes that how you look at the underlying offerings of FinTech companies, the intersections between them and the banks, the financial institutions and the legal authorities they have to work with will be critical in Dubai but also globally.

Frontier companies in Dubai

Dubai-based FinTech company Qashio has successfully raised €2.4m in its latest funding round to launch in the MENA market. The company has developed the first enterprise card and expense management platform in the UAE. With Qashio, corporate finance teams can set and change spending limits for virtual and physical cards. This eliminates the use of cash, prevents costly late expense claims and reduces the workload for reimbursements.

Corporate spending to be used in real time.

Armin Moradi, CEO and co-founder of Qashio points out that what they are doing is interesting for businesses as well as governments and banks as it reduces cash in circulation. This reduces the risk of fraud and is a great tool, Moradi says. You don’t have to wait for your money when you make an expenditure. It is already visible in the app. The CEO also stresses that it provides clarity on how to spend money so that one adheres to the guidelines set by the company. And that reduces standard internal conflicts.

According to research, digital payments are expected to grow from €4.22 trillion in 2020 to €7.92 trillion by 2024. Dubai is determined to be a location for the companies that participate in this trade.

By Thomas