UnaFinancial: What’s Next for Fintech in the UAE?
By 2028, UnaFinancial predicts the UAE’s rise as a premier fintech hub, boasting 1.8 times more companies thriving in a transparent regulatory environment. Get ready for major growth in e-commerce, e-wealth management, services for overseas workers, and Islamic banking.
UAE Fintech is Thriving Now.
National efforts to boost the investment climate and business environment are making the UAE a standout destination for business, particularly for fintech ventures.
The country is already a gateway to the thriving fintech market of the entire Middle East & Africa region. Nearly half (46%) of regional fintech startups and nearly a quarter (24%) of all fintech startups are registered here.
The country offers a unique state-supported system for fintech initiatives, designed to be highly conducive for launching and operating relevant projects.
The results speak for themselves. The UAE’s fintech market has flourished with 4,003 companies — an impressive achievement for the country.
By 2028: 7,000+ Fintech Companies
The UAE is on track for remarkable growth, with fintech firms expected to soar to 7,100—a 1.8-fold increase. Anticipate an annual growth rate of around 10%, with funds raised skyrocketing by 126% to reach $10.3 billion. The UAE’s fintech scene is set to become a global leader, backed by a clear regulatory framework.
Today, there is no reason to anticipate any significant obstacles to the continued growth of the market. UnaFinancial analysts assert that the UAE’s fintech landscape is set for continued expansion with ongoing initiatives:
● Expect ongoing regulatory fintech reforms to boost transparency and operational scope.
● The UAE leads in cross-border fintech regulation with active international projects and signed agreements (including with India and Israel).
● National fintech acceleration is fueled by multi-level projects like the Financial Infrastructure Transformation (FIT) and NextGenFDI programs, attracting digital businesses globally.
● Key fintech hubs like DIFC and ADGM free zones show robust growth, setting the stage for a promising future.
Revolutionary Trends on the Horizon
Beyond substantial quantitative growth, UnaFinancial analysts predict a transformative evolution in the UAE fintech market over the next few years.
Key emerging trends include:
— Regulatory Evolution Unleashing Fintech Potential. The UAE fintech regulatory landscape is poised for further evolution, addressing key areas like open banking, cryptocurrencies, and cross-border payments. The presence of specialized sandboxes like RegLab expedites issue resolution. Despite the presence of multiple regulators (CBUAE, SCA, FSRA, DFSA, DIFC, ADGM, etc.), there’s a noticeable trend towards unified regulatory standards, exemplified by the jointly adopted Guidelines for Fintech Companies (2021). Anticipate widespread adoption of RegTech solutions, signaling a new era in regulatory technology;
— Experts are unanimous: e-commerce, especially Buy Now, Pay Later (BNPL), will lead the trends in the UAE and globally. Juniper Research forecasts that by 2026, BNPL payments will make up 24% of global e-commerce transactions, up from 9% in 2021. Fintech services in the UAE targeting migrant workers (salary, payments, credit, etc.) are poised to become a pivotal aspect of the national fintech landscape;
— On the flip side, we expect a surge in services linked to e-wealth and e-health segments. These offerings, tailored for the rising affluent local population and expanding to other wealthy Arab nations and beyond, encompass investment, insurance, and digital medical services with promising growth trajectories;
— there is every reason to expect a surge in the activity of Islamic digital banking, enriching the dynamic national fintech landscape.
— the final transformation of the UAE into a global fintech hub. Regulatory advancements are positioning the Emirates as a global fintech leader. The MENA market offers enticing prospects, attracting a growing number of internal and external players to capitalize on unprecedented startup opportunities.
As a result, the fintech infrastructure in the UAE is set to become a unique and interconnected phenomenon. Partnerships, integrations, and collaborations in the market to become an everyday occurrence, driven by advancements in open banking.
It is worth noting that each year, market entry cost is rapidly increasing. After five years, we can expect to see the formation of a substantial pool of key players across all major fintech segments in the entire MENA region.
