Investment Apps Lead the Charge

In recent years, the UAE has witnessed a significant transformation in its financial landscape, driven largely by the proliferation of investment apps. This digital revolution is reshaping the way individuals manage their finances, making investing more accessible and appealing to a broader demographic. From seasoned investors to novices, a diverse array of users are now leveraging the power of technology to participate in the financial markets.

Data from data.ai reveals a dramatic surge in the popularity of investment applications in the UAE, with downloads skyrocketing from 67,300 in 2021 to 532,537 in 2023. During the same period, daily active users increased from 2,955 to 19,171. Analysts at UnaFinancial, an international fintech group of companies, project that if these growth trends continue, the number of active daily users could surpass 1 million by 2028, while app downloads might reach 47.2 million. Among the top 50 most downloaded financial apps on Google Play in the UAE, 62 per cent are focused on money management and investing. Of these, 30 per cent offer intuitive budget management tools, and 32 per cent provide investment tips and services for stock market and other assets.

Financial Inclusion in the Region

Financial inclusion is essential for comprehensive economic growth and for extending financial services to all segments of society, thereby strengthening the monetary foundation. Research shows that economies and communities that are good at saving exhibit greater resilience to economic fluctuations and experience more consistent growth. The creation of customised savings instruments that meet individual needs ensures that financial services are accessible to everyone, unlocking significant potential benefits for all. Emphasising savings also plays a crucial role in enabling women and micro, small, and medium-sized businesses to increase their investment capabilities. This, in turn, boosts consumption, productivity, and income, leading to positive effects on spending, fairer income distribution, and overall social prosperity.

Analysts believe that the rise of investment applications could boost financial literacy in the UAE. They note: “The UAE boasts the highest level of financial inclusion in the MENA region and has a high degree of digitalisation, with internet penetration at 99% and the digital economy accounting for 10% of GDP. However, the financial literacy rate is 39%—higher than the global average but lower than that of the most developed countries. In the coming years, investment apps that assist individuals in making more informed investment choices and navigating the complex financial landscape are expected to enhance financial literacy in the UAE.”

Younis Haji Al Khoori, Under-Secretary of the Ministry of Finance (MoF), said: “The UAE’s commitment to financial inclusion is evident by its efforts to provide individuals and businesses with access to beneficial financial products and services, in line with its vision for a cashless society. While the UAE has made notable strides in this area, the ongoing focus on financial inclusion is tied to enhancing financial literacy and fostering better money management practices.”

Al Khoori underscored the critical role of digital infrastructure in promoting financial inclusion, highlighting the necessity of both access to and use of digital financial services. He also noted the increasing contribution of digital innovation to payment and transfer systems, and stressed the need to formulate policies that bolster the digital infrastructure’s capacity to fulfil financial inclusion goals.

Al Khoori also emphasised the need to prioritise the development of digital financial services and products tailored to the financing needs of micro, small, and medium-sized enterprises. He highlighted the importance of establishing innovative data coordination mechanisms for financing these enterprises and adopting leading global digital transfer practices to reduce the costs associated with cash transactions.

Modern Technologies

—kushmita@khaleejtimes.com

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