|09 September, 2019

New reforms boost for FinTech firms in Bahrain

There were currently around 80 FinTech firms operating in the country, but the number was increasing: official

Bahrain Financial Harbour (L) and Bahrain World Trade Center are are seen in diplomatic area in Manama, Bahrain, February 28, 2018. Image used for illustrative purpose.

Bahrain Financial Harbour (L) and Bahrain World Trade Center are are seen in diplomatic area in Manama, Bahrain, February 28, 2018. Image used for illustrative purpose.

REUTERS/Hamad I Mohammed

Bahrain will be home to more than 100 FinTech (financial technology) firms by the end of the year, according to an expert.

Khalid Saad, chief executive of Bahrain FinTech Bay (BFB), told the GDN yesterday there were currently around 80 FinTech firms operating in the country, but the number was increasing.

He predicted measures adopted by authorities would continue to attract more firms operating in the sector.

However, he added the funding ecosystem needed to develop further to support them from the start-up phase and through their growth journey.

“A more comprehensive funding environment will not only support firms in Bahrain to expand their operations on a regional and international scale, but also support regional and international firms that are looking at expanding here,” he said on the sidelines of a presentation to members of the Rotary Club of Manama at the Gulf Hotel Bahrain yesterday.

New business models, products and services are now possible due to FinTech

However, he pointed to signs of progress – such as the establishment of a $100 million fund for key markets, including Bahrain, by InQvest Partners, FinTech Consortium’s investment platform.

Innovation, talent development and regional growth were other crucial elements he singled out as being key to positioning Bahrain as a leading FinTech hub in the Middle East and Africa (MEA) region.

Bahrain has taken steps to achieve this target with initiatives that include the Central Bank of Bahrain’s (CBB) Regulatory Sandbox, a cloud-first policy, prospective national e-KYC utility and regulations on crowdfunding, open banking and cryptocurrency.

In the field of innovation, Mr Saad pointed to the CBB sandbox as a key enabler by acting as a test bed for new financial products and services.

Since it started in 2017, 35 companies have gained entry and two have graduated.

Fourteen landmark reforms and initiatives by authorities have created a thriving ecosystem for digital banking and insurance in Bahrain

Players in the sandbox include 13 firms working on crypto-assets, nine dealing in payments solution, five trying out WealthTech, three in crowdfunding, two each in blockchain and open banking and one in data analytics.

In July, Bahrain-based cryptocurrency exchange Rain became the first fully regulated, onshore cryptocurrency exchange in the Middle East and North Africa – and had closed a $2.5 million funding round.

UAE-based Souqalmal.com has become the first to get an e-broker licence in Bahrain and is set to shortly launch its online insurance comparison services.

Meanwhile, BFB is contributing through innovation labs, including a co-working space that encourages start-ups.

Also highlighting the importance of qualified talent, Mr Saad said this was essential to support the growth of the industry and wider economic diversification efforts.

“This pipeline of talent comprised of graduates and re-skilled workforce will fuel start-ups, financial institutions and support an increasingly innovation-driven economy,” he predicted.

The BFB includes a FinTech Consortium Institute, which aims to supplement talent initiatives and source high calibre graduates for innovation-related roles.

It is running talent development programmes through internships, equipping graduates and executives with skill sets and knowledge required to capitalise on opportunities created by FinTech disruption.

Last month, BFB and Fintech Consortium entered into an educational partnership with BetaBlocks, a US-based blockchain innovation and learning platform, with plans to introduce courses focused on digital transformation – including Blockchain for Business, Artificial Intelligence, the Internet of Things (IoT), Cloud Infrastructure and Cybersecurity.

BFB has also set up a Venture Acceleration Platform to catalyse growth by providing a launchpad and bespoke go-to-market strategies for innovative start-ups looking to scale up in Bahrain and the wider region.

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