Sustainable fintech growth will boost financial services and the GCC’s overall ambitions of economic diversification and increased innovation, according to Strategy& Middle East, part of the PwC network.

The number of fintech hubs in the GCC has risen from just one in 2018 to four in 2022 and the volume of late-stage funding rounds has almost doubled in the last five years

But the region cannot afford to rest on its laurels and must build on the momentum by encouraging fintech entrepreneurs, accelerating and easing access to venture capital (VC), and forming new strategies to resolve the growing digital talent shortage.

New fintech hubs have emerged across the region, funding dynamic small companies, and taking a growing number of them public. In 2021 alone, the volume of late-stage funding rounds totalled $2.5 billion – almost double the amount five years ago.

This growth is catalysed by a growing number of fintech hubs in the GCC, which has risen from just one in 2018 to four in 2022: the Abu Dhabi Global Market, Bahrain Fintech Bay, Fintech Saudi, and the FinTech Hive at the Dubai International Financial Centre.

According to the report, the region’s fintech success so far is partly due to a favourable regulatory environment.

Bahrain, Saudi Arabia, Qatar, and the UAE have all designed national fintech strategies and set up government-sponsored accelerators and incubators.

Regulatory ‘sandboxes’ have allowed room for experimentation, and the availability of government funding and widespread access to broadband, including high smartphone penetration, have also contributed.

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