**Finance is undergoing a fundamental and unique transformation. In particular, the financial technology sector, or FinTech for short, is on the rise worldwide. We take a closer look at the €4 trillion annual industry and why Dubai wants to become a hotspot for fintech start-ups and investors.**
The world economy is going through a difficult phase in the face of rising inflation, interest rate hikes and political uncertainties. One sector, however, managed to stand out – the financial technology sector. This typically refers to software, technology and mobile applications designed to enhance and automate traditional forms of finance.
Dubai International Financial Center – Finance in transition
The latest financial technologies were presented at the FinTech Week of the Dubai International Financial Center – the DIFC. The thought leaders conference covered the latest opportunities, challenges and technology trends. The event was opened by the director of the DIFC.
Essa Kazim emphasizes that finance is changing – driven by digital technologies and innovations that are transforming payments, credit insurance and wealth management. According to him, FinTech is the fastest growing sector for the DIFC, accounting for more than 35% of the total number of companies launched last year.
The director of the DIFC also states that they have created a comprehensive ecosystem, ranging from the incubator to the accelerator to providing the right funding and the innovation testing license. In parallel, they have worked to create the necessary legal environment, with the best practices and international standards.
From technical tools to presentations to panel discussions. The event brings together investors and companies looking for dynamic solutions for the FinTech sector. Experts at the event believe Dubai will become a hub for global entrepreneurs looking to expand into regions of the Middle East and Africa. The sector is growing rapidly and MENA FinTech Association Chairman Nameer Khan emphasizes that our daily lives are surrounded by innovations stemming from the FinTech industry.
The future of finance
Nameer Khan explains that, at its core, FinTech is about enabling financial services. FinTech makes them invisible, transparent and above all very affordable. From paying with a tap to buying a product online, everything is seamless and convenient, says Khan.
Technological progress is not only noticeable in the financial sector. Digital technologies and innovations are also on the rise in terms of administration. Digital government should be helpful not only from a government perspective, but also in terms of citizens' access to more efficient and effective services.
Amazon gave further impetus to the industry in Dubai in June with the opening of its FinTech Lab, a hub for digital innovation and creativity in Dubai's financial and fintech hub. In cooperation with startups and small to medium-sized companies, new programs and ideas are to be supported and knowledge about digital payments promoted worldwide. However, access to finance is still a top priority for start-ups.
Sharif El-Badawi, Managing Director of Dubai Future District, says he is concerned with where these technologies and all the buzz I hear about FinTech are going – especially in the next two years. He believes that how one looks at the underlying offerings of FinTech companies, the intersections between them and the banks, financial institutions and legal authorities they must work with will be crucial in Dubai but also globally.
Pioneer company in Dubai
Dubai-based FinTech company Qashio has successfully raised EUR 2.4 million to launch in the MENA market in its latest funding round. The company has developed the first corporate card and expense management platform in the United Arab Emirates. With Qashio, corporate finance teams can set and change spending limits for virtual and physical cards. This eliminates the use of cash, prevents costly late expense reports, and reduces the workload for reimbursements.
According to Armin Moradi, the company's CEO and co-founder, it's a product of interest to corporations, governments and banks because it reduces the amount of cash in circulation. It also reduces the risk of fraud and can be used to monitor corporate spending in real time.
Armin Moradi, CEO and co-founder of Qashio emphasizes that what they are doing is of interest to companies as well as to governments and banks as it reduces cash in circulation. It reduces the risk of fraud and is a great tool, Moradi said. You no longer have to wait for your money when making an expense. It is already visible in the app. The CEO also emphasizes that it provides clarity on how to spend money so that you adhere to the policies set out by the company. And that reduces standard internal conflicts.
According to research, digital payments are expected to grow from €4.22 trillion in 2020 to €7.92 trillion in 2024. Dubai is determined to be a hub for the companies involved in this trade.
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