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Dubai to lead global fintech innovation

DIFC unveils five year innovation outlook for financial services

New report launched by DIFC in collaboration with Refinitiv, a London Stock Exchange Group business, reinforces Dubai’s leading role in driving innovation in financial services

Open finance, decentralised finance, digital assets, and ESG-related finance identified as key trends driving innovation in the next five years

Investments in FinTech, projected to grow at a compound annual growth rate CAGR of 17.2 per cent to $949 billion from 2022 to 2030, a report showed on Wednesday.

The report, titled ‘Drivers of Innovation in Financial Services’, was issued on Wednesday by Dubai International Financial Centre (DIFC) in collaboration with Refinitiv. It reveals a five-year outlook for innovation in the financial services industry.

These investments are further accelerating the ongoing pace of FinTech innovation globally and in Dubai, which offers access to high-growth emerging markets in the Middle East and North Africa (Mena), Western Europe, Asia and Africa.

Following the initial wave of innovation sparked during the pandemic, the global financial services industry continues to see major transformations. Tailored to the evolving preferences and expectations of customers and clients, the high demand for convenient and personalised services has increased competition and continuous disruptions as new players including FinTech and Big Tech companies claim their space in an ever-expanding market, the report said.

Leveraging automation technologies such as artificial intelligence (AI), blockchain, and cloud computing are also seeing business model and product innovations that have led to reduced operating costs and streamlining of inefficient processes.

The report unveils four key trends that will be pivotal in shaping the sector over the next five years, unlocking the potential of open finance, greater decentralisation in finance, the emergence of digital assets as a viable asset class, and the incorporation of ESG considerations across banking operations.

Additionally, the report outlines the importance of innovation within established financial institutions to facilitate agile development and improve future competitiveness through frameworks such as Venture Studios.

A strategic global hub for FinTech and Innovation companies in the region, Dubai and DIFC is home to a comprehensive innovation eco-system that provides financial institutions and FinTechs alike with the tools, platforms and regulatory support that enable financial innovation. These range from forward-thinking regulations, accelerator, and venture building platforms, to venture capital and other start-up funding vehicles, and internationally recognised talent development programmes.

Arif Amiri, CEO of DIFC Authority, said: “Investments in FinTech, projected to grow by 17.2 per cent CAGR to $949 billion between 2022 and 2030, are accelerating the ongoing pace of FinTech innovation globally and in Dubai. Combined with access to high-growth emerging markets and DIFC’s world-class financial, regulatory and innovation eco-system, this provides immense opportunities for expansion and innovation. At DIFC, we already see Financial Institutions actively joining forces with disruptive start-ups as we collaborate to shape the future of finance in line with our 2030 strategy and beyond.”

Nadim Najjar, Managing Director, CEEMA, London Stock Exchange Group, said: “Innovation in the financial industry has become more important than ever with the continuous and fast pace of disruption in the industry pushing all players to find new ways of doing business. FinTech has been a cornerstone for the financial innovation in recent years, introducing a growing range of new technologies that enable new business models, applications, processes, or products. The ‘Drivers of Innovation in Financial Services’ report provides an overview of innovation in the financial industry, and insights on new financial innovations that will shape the industry in the next five years.”

The report was validated during a DIFC-hosted roundtable with industry leaders Gavin Payne, Head of Emerging Technology, Amazon; Akshay Chopra, VP, Head of Innovation & Design, Visa CEMEA; Danyaal Z. Abdul-Khaliq, Director of Innovation at E& Enterprise; and Alan Francis, SVP, First Abu Dhabi Bank. Other speakers included Youssouf Kamal, Managing Partner, U+ Digital Ventures; Hussam Ziadeh, Partner, Stryber; Simas Ceckauskas, Director, FutureLabs; and Marie d’Hullain, Head of Projects Portfolio, Commercial Bank of Dubai. Representing DIFC Launchpad at the roundtable was Steve Gotz, Corporate Innovation, and Michele Scataglini, Innovation Strategy. Silvina Bruggia, Director, Sustainable Finance, Emerging Markets, Refinitiv, moderated the session.