Dubai Emerges as a Leading Fintech Hub Attracting Global Investment and Innovation

With the success of Dubai Fintech Summit in providing a truly global platform for the world's Fintech community, the Dubai International Financial Centre (DIFC) – home to the largest financial ecosystem in the Middle East, Africa and South Asia (MEASA) region – is reaffirming its position as one of the world's top fintech hubs, attracting record investments and growing at an accelerated pace, with new company registrations surpassing 1,000 for the first time in history to reach total number of active registered companies of 4,377.

Organised on May 8 and 9, the DIFC’s Dubai Fintech Summit served as the platform for more than 5,000 experts, policymakers, industry leaders, thought leaders, and decisionmakers to come together and share ideas, knowledge and perspectives that can help unlock a new phase of exponential growth for the global financial sector. DIFC leveraged the Dubai Fintech Summit platform to bring together banks, fintech startups, and regulators from across the world to further stimulate the digital advancement of the financial sector and shape the future of finance.

“The financial centre has been expanding five-fold faster than the emirate's average gross domestic product growth over the past 10 years, contributing about 6 per cent to its GDP,” said H.E. Essa Kazim, DIFC Governor, during his keynote address.

He further  added that “a key growth driver over the past three years has been fintech and innovation companies contributing over 27 per cent to the centre’s overall client growth." Proactive approach taken by policymakers and measures taken to provide the right ecosystem to enable innovation, investing, investment, and growth have all contributed to the rapid growth of the fintech sector, he added.

Fintech and innovation, in particular, has been a strong growth area for DIFC in 2022, with the hub now home to over 686 fintech companies that include startups and global unicorns. DIFC is also working towards identifying, enabling, and growing 10 high-calibre fintech startups, based in both India and the UAE, into unicorns by 2025, as part of the partnership it entered into with Federation of Indian Chambers of Commerce & Industry (FICCI) LEAD to launch the India-UAE Startup Corridor.

"There is no denying the fact that UAE is one of the most attractive countries for investment. The business environment here has always been conducive to the needs of major global companies.  What's most amazing is how the UAE and the Middle East have always stayed ahead of the curve and embraced the best of new and emerging technologies. With business-friendly environment, we believe that the region will see exponential growth when it comes to becoming a hub for startups and entrepreneurship,” Kush Mehra, President and Chief Business Officer of Indian fintech major Pine Labs told the EconomicTimes.com.

Earlier this year, leading merchant commerce omnichannel platform Pine Labs, which recently forayed into the UAE market, said it will partner with local banks and financial institutions in the UAE to help them serve their merchant partners better. Banks in the UAE will benefit from a simple and easy-to-use technology stack that Pine Labs offers to build innovative products into consumer journeys. Local incumbent banks in the UAE will get seamless tech integrations that Pine Labs is known to deliver at speed and scale.

“Pine Labs' simple, seamless, and secure fintech solutions are ideal for quicker adoption among retailers, enterprise clients, and the end consumers in the region. Our strong suite of products developed for the omnichannel needs of businesses will go a long way in accelerating the pace of adoption of digital payments in the region," said Mehra.

The Dubai Fintech Summit 2023 was aimed at setting a global benchmark for the approach to financial innovation. World-renowned thinkers, policymakers, founders and investors deliberated on important themes such as ESG, Sustainability and Macroeconomics, Startups, Investment and Wealth, the Future of Fintech and Finance, Embedded open finance, Digital Payments, Regulation and Policy Making and Crypto, and Web3.

H.H. Maktoum bin Mohammed bin Rashid Al Maktoum, Deputy Ruler of Dubai, Deputy Prime Minister and Minister of Finance, said, “With Dubai providing one of the world’s best ecosystems to foster the growth of fintech innovation, it has become one of the leading hubs for driving value creation in the sector… I am confident that the inaugural Dubai Fintech Summit will also foster more cross-border collaboration between the public and private sectors, while offering a strong platform for fintech firms to tap into new growth opportunities.”

The Dubai Fintech Summit, he had added, will help open new horizons of opportunity and transformation for both the global fintech sector and the financial industry.

In the wake of DIFC’s Dubai Fintech Summit, Dubai has done well to solidify its position as a global finance hub. Dubai ranked 17th in the Global Financial Centres Index 2022 and 12th on the International Financial Centres Index (compiled by the CEOWORLD Magazine) 2023.  Dubai has not only established itself as the de facto financial centre in the Middle East and North African (MENA) region, it has now taken its place alongside other major global financial powerhouses thanks to its strategic location, business-friendly environment, and the creation of free zones like DIFC. The Emirate’s transparent legal system, well-developed infrastructure, easy registration procedures, and low corporate income taxes make it an extremely business-friendly environment.

To Indian startup founders and venture capitalists, Dubai is seen as a great gateway to the MENA region and then the rest of the world. And thanks to a conducive operating environment created by the talent pool, infrastructure, and business-friendly policies, Dubai has been attracting a slew of Indian companies.

Indian B2B fintech Safexpay is one such example of an Indian startup looking to set up its international headquarters in Dubai as part of its plan to expand into the Middle Eastern market. The company plans to make investments of up to $10-12 million for its planned expansion in the region.

According to the Dubai Financial Services Authority (DFSA), Dubai has been witnessing a growth in the number and diversity of regulated, authorised entities, with an increase in innovative companies registered through DFSA’s money services regime and its Innovation Testing Licence Programme.

“We set high standards in building a clear and flexible regulatory framework, based on the best practices and laws of the world's leading financial jurisdictions. The results demonstrate the trust that local, regional, and international businesses have in the DFSA,” said DFSA Chairman Fadel Al Ali as he highlighted Dubai’s expanding role as a major player in the global financial industry.

To be sure, the financial sector has now become a key driver of Dubai’s economy, contributing to about 10% of the emirates GDP, according to the latest report published by the Dubai Statistics Centre, and attracting large-scale foreign investments, while supporting the growth of MSMEs, promoting entrepreneurship, and providing employment for a significant number of residents.

Going forward too, experts believe the focus on tech and innovation, digital transformation, and foreign trade, among other transformational projects, will drive an increase in foreign direct investment to over 650 billion dirhams over the next decade and an annual 100 billion dirhams in contributions from digital transformation. This, in turn, will enable the emirate to cement its position among the top three global financial centres and meet its ambitious 10-year D33 economic targets by 2033.

Click this link for more on business in Dubai