The Middle East fintech market has seen a decline in investments in the past 12 months, mirroring a global downturn caused by geopolitical issues and high interest rates.

Fintech investment in the Europe, Middle East and Africa (EMEA) region dropped to a seven-year low of $24.5 billion across 1,514 deals in 2023, compared to $49.6 billion across 2,478 deals in 2022, according to a KPMG report on Tuesday.

However, the report noted that the EMEA region’s fintech market showed robust geographic diversity, as fintechs from 7 different countries represented the top 10 deals in the region, with the UAE’s Tabby ($950 million) and Haqqex ($400 million) being among the biggest.

During the first half of the year, the report said the EMEA region is expected to see a growing focus on embedded finance and banking offerings. The region will also witness growing interest in the buy now, pay later (BNPL) model and see consolidation within the BNPL sector, asset tokenization and artificial intelligence (AI)-based solutions around fraud prevention and customer services.

Globally, fintech investment also slowed down, as investors opted to hold on to their funds. In 2023, fintech investments across 4,547 deals totalled $113.7 billion, down from $196.6 billion across 7,515 deals in 2022, KPMG’s bi-annual publication said.

“It was a combination of geopolitical events, high interest rates and the parched exit environment that drove the downturn,” KMPG said.

(Writing by Cleofe Maceda; editing by Seban Scaria)