Fintech Hive at the Dubai International Financial Centre (DIFC) is a 12-week programme which provides technology companies with mentoring and support from Middle Eastern and global financial institutions and insurance companies. The programme supported 22 participants from the fintech, insurtech, regtech and Islamic fintech sectors this year; double the 11 businesses which participated last year, in its first year of operation.
Fintech is expected to account for 8% of financial services revenue across the Middle East and Africa (MEA) by 2022, according to a new report by Fintech Hive and Accenture, the consultancy (registration required). The number of fintech companies in the MEA region has grown from 91 in 2010 to 839, although the region attracted only 1% of the $50 billion invested in fintech globally over the same period.
Financial services expert Marie Chowdhry of Pinsent Masons, the law firm behind Out-Law.com, said that fintech activity in the region was "booming", with a range of government initiatives helping to reduce barriers to accessing the market.
"In the past few months alone, we have seen a large increase in the activity and interest in this space from new and existing clients working in the GCC," she said. "Fintech startups in the region have traditionally focussed on banking solutions and challenging existing incumbents, but as this new cohort of Fintech Hive graduates demonstrates, the MEA ecosystem is evolving into the next phase of its development, with much broader industry focus areas and fintech businesses looking for partnerships and the opportunity to collaborate being much higher on their agenda."
"Government initiatives, such as the DIFC Fintech Hive accelerator programme, are helping to reduce the regulatory barriers and cost burdens many new fintechs face when trying to enter the region. Similar initiatives such as the Abu Dhabi Global Market (ADGM) 'Reglab', and the 'Bahrain Fintech Bay' in Bahrain, are helping to draw investors and entrepreneurs alike into this interesting space," she said.
Last month, Fintech Hive announced that it would be expanding its partnership network with other global fintech hubs. It has now formed partnerships with similar initiatives in New York, London, Hong Kong, Kuala Lumpur, Singapore, Mumbai, Paris, Brussels, Holland and Bahrain. DIFC has also recently opened a new accelerator programme dedicated to early stage startups in conjunction with industry network Startupbootcamp, and has committed a further AED 10 million (€2.4m) to Fintech Hive.
"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 the DIFC Authority. "We have also secured support from regional and global investors who are looking to capitalise on the next big solution that will transform the financial services sector, with participants in last year’s cohort already have raised over $16m in capital."