KHALEEJ TIMES, Tuesday, Oct 5, 2021 | Safar 28, 1443
FinTech investments growing across ME region
FinTech investments have been steadily growing across the UAE and Middle
East region, enhancing the digital experience, experts have said.
Ramzi Khleif, general manager of StashAway MENA, DFSA’s first digital wealth
manager, explained that the FinTech space in the UAE has grown exponentially
over the past couple of years. Today, the UAE is ranked as the number one
FinTech ecosystem in the Mena region, due to its agility, forward looking
vision, and low barriers to entry.
“The rise of FinTechs in the UAE has made it possible for financial institutions
such as banks,
but also startups to offer digital services that are tailored to the needs of
each customer,” he explained. “That being said, and with this sector growing and
competition becoming more aggressive, customers now have a lot of options to
choose from that will enhance their digital experience. Incubators like the
Innovation Hub in DIFC and Hub 71 in ADGM, are doing a great job in helping
fintechs and startups grow their ideas.”
“Over the last couple of years, we saw FinTech incubators investing heavily in
companies,” he added. “They have also made sure to welcome international players
into their markets to promote globalization.”
According to Fintech News, the UAE is home to around 46 per cent of FinTechs in
the Mena region and this number is expected to increase. Recent research reports
by Fintech Middle East also show that FinTech investment have grown by 49 per
cent in H1 2021 year on year.
“New companies are being created across all aspects of fintech, banking,
wealth management, insurance, and crypto, with all of them having one main point
in common, which is to provide the best customer experience,” said Khleif.
He noted that other than the VC regular investment, The Innovation Hub in DIFC
is helping startups grow by allocating around $100 million to their FinTech fund
accelerator program. On the other hand, ADGM hosts their annual FinTech Abu
Dhabi event that seeks to promote multiple startups and FinTechs in order for
them to raise funds from the VCs.
Asked about what role FinTechs will play in wealth management in the UAE and the
GCC region, he answered: “In the region, around 45 per cent of the total wealth
is held in cash, a very high percentage by any standard. This goes to show that
there is a huge amount of money sitting idly and not generating any returns for
investors. There was a huge gap in the market for locally available platforms to
help facilitate investing cash easily and effectively, without having to look to
international platforms, which can result in higher fees.”
StashAway recently raised more than $61.4 million over six funding rounds from
leading VC firms, such as Sequoia Capital India and Eight Roads Ventures. On the
wealth-tech front, StashAway has invested heavily in offering customers new
products to diversify their investments and stay on track to achieve financial
freedom. With the launch of their new product, Thematic Portfolios, customers
will have the ability to invest in what they believe could transform the world.
The portfolios feature ETFs from some of the world’s top fund managers,
including ARK Invest, iShares, Global X, and VanEck. Since 2018, the amount of
assets in thematic funds globally have grown at an annual rate of 37 per cent.
In 2020 alone, assets in thematic funds grew by 77 per cent. Not only are
thematic investments growing in popularity, but they are also eclipsing
traditional equity sectors.