Fintech is an emerging industry that is challenging traditional financial services through innovation. Fintech is challenging big banks with innovations like mobile telephony and big data. With hundreds of millions of investments, year-round mega-tech events, and business accelerators designed to launch start-ups on the global stage, Dubai has established itself as the leading Fintech hub in the region. The UAE accounted for 46.8% of fintech investments in the area in 2020. During this period, the Emirates raised a whopping 67.9% of funding.
To attract start-ups, especially in technology, you must create an attractive ecosystem allowing them to access this sector. It has access to regulation and financing, and Dubai, an international financial center, has created a $250 million FinTech investment fund. It is where our business accelerator program begins, where we enable start-ups to pitch their solutions to more than 30 financial institutions.
The Main Goal of Financial Technologies:
- To increase the availability, quality, and range of financial services.
- Reduce risks and costs in the financial sector and the cost of services for consumers.
- Support the development of competition in the financial market.
- Ensure the security and stability of banking processes.
An Overview
- The total number of investments in Fintech in the world lags far behind the number of investments in 2019, which was at 168.5 billion US dollars. As of mid-year, the total investment in Fintech worldwide was around $30 billion.
- The largest share of total investments in Fintech as of the middle of the year is in the Americas, where assets amounted to $14 billion. Total fintech investment in the Asia Pacific was $9 billion in H1 2018, and fintech investment in the EMEA region was $4.2 billion.
- The Americas and countries in Europe, the Middle East, and Africa are currently on track for a new record annual growth in fintech investment. At the end of the first half of 2019, North and South America attracted $9.3 billion in US investments in VC, Asia – $6.6 billion, and Europe – $5 billion.
- Corporate investment in VC remained strong, accounting for $15.1 billion in fintech investment globally. In the first quarter of 2019, the United States recorded a record value of transactions involving venture capital companies, which exceeded $3.2 billion; the value of transactions in the subsequent quarter amounted to almost the same amount.
- M&A activity has declined across all world regions, with a particularly sharp decline seen against the backdrop of the mega M&A activity in 2019 and 2020. In the first half of 2021, the volume of M&A transactions amounted to USD 5.2 billion; in the second half of 2022, it was $8.9 billion.
- Global investment in cybersecurity surpassed the 2019 record of around $600 million to reach $900 million.
Big Data
During quarantine restrictions, the development of the regulatory framework and government fintech acceleration programs accelerated. It was reflected in the growing attention to digital platforms, neo-banking, contactless payments, and Wealthtech class solutions. In Europe, there was a good dynamic in the Regtech solutions market, and in Southeast Asia, there was a good dynamic in cryptocurrencies and blockchain. In all regions, there is a trend of increasing attention to solutions for digital identification, security, and fraud prevention in financial transactions; there has been another growing attention to cloud platforms.
The Central Asian market is similar in the increased attention of regulators and government agencies to the development of Fintech. It contributes to the growth of interest, attraction, and the emergence of new solutions. However, investments are relatively modest, venture approaches are still not used so often, and the market continues to complain about conflicts between the requirements of various legislators and regulators, hindering its development. However, we can expect the emergence of new players, at least in the banking market, as early as next year.
Robotization
It is the automation of financial processes using robots and computer programs. For example, using robotization in banks has reduced the time for receiving applications from customers, simplified and accelerated customer risk assessment procedures, reduced the number of bank branches, and so on. In the future, banks will strive to ensure that office people solve only non-standard client tasks beyond machine algorithms and receive the top products and services online.
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