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· GCC has strong foundation to further develop financial technologies sector (FinTech)
· Governments and financial institutions must coordinateto innovate financial technologies
· Global investment in FinTechsector jumped three-fold from 2008, reaching US$3 billion in 2014 and is expected to double by 2018
Dubai, UAE - The GCC has a strong foundation to develop a vibrant financial technologies (FinTech) sector, according to a recent study by management consultancy Strategy& (formerly Booz & Co.).Little investment has been made in FinTech to date across the region, however Strategy& predicts thiswill likely change.
Todayfinancial technologiesin the GCC still face obstacles to development and many financial e-services and digitized financial interactionshave stalled.Despite these challenges, critical success factors for developing a healthy FinTech environmentexist, such as government driven funding programs and the financial advisory services necessary for technology start-ups to sustainably grow. To capitalize on this potentialgovernments and financial institutionsmust take aligned steps to further develop the region'sFinTech sector, according to Strategy&.
Daniel Diemers, Partner with Strategy& in Dubai, said:"The role of GCC governments is more critical thanit is in established markets to help better establish FinTech. GCC governments must enforce policies and a regulatory environment that will ease the development of FinTech. This will eventually attract moretalent to the region, boost entrepreneurial and business activities, and most importantly improve the country's overall competitiveness."
There are already some success stories in the GCC, particularly in the UAE, where incubators and innovation hubs are supporting the creation and growth of local digital enterprises. The UAE Academy for example aims to stimulate enterprise in the country by increasing awareness of entrepreneurship. FinTech start-ups, government backing, and support programs are creating pockets of innovation across the UAE.
In the less-mature FinTech environments such as Saudi Arabia and Jordan, governmentsmust be even more heavily involved to regulate, set policies and provide the necessary infrastructureso that the industry can grow sustainably. The UAE's approach to developing a healthy and sustainable FinTech environment could potentially be considered in other GCC nations and help them to grow their own FinTech industries.
"GCC governments, particularly the UAE's, can encourage a region-wide FinTech ecosystem by connecting a multitude of different stakeholders to support innovation. If the region can rise to this challenge, the rewards for the financial industry and the broader regional economy could be significant," concluded Dr.Diemers.
Strategy&'s 'Developing a FinTech ecosystem in the GCC' study estimates that the global investment in FinTechhas jumped three-fold between 2008 and 2014, reaching US$3 billion, and is expected to double again by 2018, and may even hit $8 billion.Most FinTech investment is currently in the U.S., which captures about 80 percent of this spending,however meaningful innovation is also occurring in the European Union, particularly in the U.K. Although relatively little FinTech investment has occurred in the GCC to date, that could and should change.
About Strategy&
Strategy& is a global team of practical strategists committed to helping you seize essential advantage. We do that by working alongside you to solve your toughest problems and helping you capture your greatest opportunities. These are complex and high-stakes undertakings--often game-changing transformations. We bring 100 years of strategy consulting experience and the unrivaled industry and functional capabilities of the PwC network to the task. Whether you're charting your corporate strategy, transforming a function or business unit, or building critical capabilities, we'll help you create the value you're looking for with speed, confidence, and impact.
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© Press Release 2015
