Financial technology, also known as FinTech, is quickly becoming a dominate industry in the startup space. Around the world more and more innovative companies are finding new solutions to old problems and the Middle East is no exception. In the Arab world alone the number of startups that operate in the financial services industry has more than doubled, growing from 46 in 2013 to 105 by the end of 2015.
With this rapid growth and the massive disruption potential of FinTech, we knew we had to shine a spot light on the industry. That’s why PAYFORT has partnered with Wamda Research Labs to present the 2017 State of Fintech report.
This detailed look at the current state of financial technology in the MENA region provides you with everything you need to know about this emerging sector. Whether you’re an established player in the FinTech space or someone who’s just hearing about it for the first time, we promise this report will set you up to be a leader when it comes to the sector.
Fintech startups are currently present in 12 Arab countries across the region with the UAE, Lebanon, Jordan, and Egypt proving to be the most popular locations to set up shop. Out of these four however, the UAE is by far the most dynamic allowing for a wide range of FinTech technologies to evolve.
The sharp rise of FinTech across the Arab world likely stems from 4 unique factors that make the MENA region perfect for innovative new approaches to finance.
1. Currently, 86% of adults in the region still do not have bank accounts, relying almost exclusively on cash for their purchases. Companies that can break down this barrier will have a huge potential clientele to sustain their growth.
2. Lending is still almost exclusively handled by enterprise level banks. In fact, SME lending in the MENA region is half of the global average, leaving plenty of room for innovative new companies.
3. Ecommerce is growing quickly in the region and is set to quadruple over the next five years. Businesses that can carve out a piece of the action now can expect continual growth over the coming years.
4. Finally, 1 in 2 banking customers have said that they are interested in experimenting with new digital services meaning adoption of quality services shouldn’t be a problem.
Fintech is poised for greater visibility by 2020. With the payment sector showing early signs of consolidation especially in the GCC region, it can be expected that a second wave of startups will enter the game once FinTech gains a foothold as a standalone industry.
Want to be the first to read our 2017 State of Fintech Report? Be sure to sign up for an email notification service and we’ll email your copy the second it goes live. And if you’re looking for more information about FinTech, check out our previous post here.