Changing consumer needs and rapid technological development has given a massive impetus to financial technology (fintech), which has grown from strength to strength.

Since the first credit card launched witha magnetic strip in the 1960s, the intertwining ofdigital technology and finance to improve the offerings in the market, has seen constant innovation.

Furthermore, fintechs adaptability across a slew of consumer sectors is propelling its widespreadacceptability. Managing finances, trading shares,furnishing payments and shopping online (often onyour smartphone) has never been more convenient.

The numbers add up: Ernst and Youngs Global FinTech Adoption Index 2019, surveying more than 27,000 consumers across 27 markets, revealed that China and India both hold an 87 per cent fintech adoptionrate while the global fintech adoption rate in 2019stood at 64 per cent.

Regionally, the MENA fintech market will reach a value of $2.5bn by 2022, according to research company MENA Research Partners.

INVESTOR ENGAGEMENTTechnological advancementshave not only led to a notableincrease in fintech startups, buthave understandably led tosubstantial investor engagement as well.

Since 2015, $237m has beeninvested in MENA-based fintech startups across 181 deals,with 51 of those deals beingmade in 2019 alone, a report co-compiled by MAGNiTT and AbuDhabi Global Market reveals.

Consumer demographics, internet and payments adoption, consumer attitudes, regulatorysandboxes, fintech funds and accelerators, and private capitalavailability remain key driversof regional fintech adoption andstartup growth, the report notes.

Regionally, the UAE stands out as the largest MENA hub forthe industry, accounting for 46per cent of all fintech startups.This growth has been backed by a tech-savvy consumer base,government support and programmes that underpin thestartup ecosystem.

The Dubai International Financial Centre (DIFC)launched the $100m FinTechFund in 2019 to accelerate thedevelopment of financial technology by investing in startups from incubation through togrowth.

As part of the fund, DIFCinvested in four fintech startupsin June this year: FlexxPay acloud-based B2B employee benefits platform; GoRise a startup building a financial services platformfor 250 million global migrants; NOW Money a payroll services startup for Gulf-based companies; andSarwa a robo-advisory wealth management firm.

DIFC has registered over 100 fintech firms since the end of 2018, it announced in Q3 2019.

Outside the UAE, Riyad Bank in Saudi Arabiarevealed a SAR100m ($26.7m) programme to investin financial technology startups, while Bahrainlaunched its FinTech Bay in a bid to become the Gulfregions centre for fintech, hosting co-working spacesand shared infrastructure for corporate innovationlabs and startups.

Bahrain also offers a regulatory sandbox whichallows fintech firms to experiment with new ideasand solutions.

The Covid-19 pandemic also highlighted its relevance at a time when people have been either unableto or preferring to avoid physical services. Someof the products that have seen the biggest increase in transactions include online banking and cryptocurrencies, according to experts.

Overall, greater investment, regulatory support and a digitised consumer base have inspired fintechstartups to innovate and expand.

Looking ahead, the future of the regional fintechspace looks bright.

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Growth of the regional fintech ecosystem going forward - Gulf Business News