Page 87 - SAMENA Trends - June-August 2021

ARTICLE SAMENA TRENDS

ARTICLE

All Set for Growth: Fintech on Brink of Rapid Expansion

The fintech industry in the Gulf Cooperation to introduce regulations to facilitate market
Council (GCC) region looks well placed to development. Saudi Arabia, for example,
enjoy a period of substantial growth. Despite aims to reach an e-payment target of 70% by
widespread smartphone penetration, the 2030. The government has brought in several
unbanked population is still relatively high. measures to make this target achievable, most
Regional governments have spotted the notably a national QR code for payments in the
opportunity and have introduced regulation country. In 2019, Saudi Payments (representing
to advance the fintech market. International the regulator, Saudi Arabia Monetary
companies have also taken note, as the recent Authority (SAMA)), signed a memorandum of
minority stake purchase in stc pay by Western understanding to this effect with twelve parties
Union demonstrates. This news is likely to (nine banks and three fintech firms).
stimulate further investment and accelerate
the development of the market. However, what The conditions for fintech
Jorge Camarate that market will look like exactly is still open to
Partner debate. growth in the GCC region are
ripe. Smartphone penetration
The conditions for fintech growth in the GCC is at 96%, well above the global
region are ripe. Smartphone penetration is at
96%, well above the global average of 58%. average of 58%. However,
However, fintech has not developed at a similar fintech has not developed at a
pace. The global share of mobile payments in similar pace. The global share
the GCC is growing, but still far behind other
regions (such as Asia Pacific). of mobile payments in the
Even though the GCC is catching up with GCC is growing, but still far
developed markets in terms of financial
inclusion (around 22% of the population in the behind other regions (such as
GCC is unbanked, compared to around 60% in Asia Pacific).
Jad El Mir North Africa), many have now started to turn to In January 2021, another significant
smartphone transactions. This was particularly
Partner evident during the COVID-19 crisis, where cash development came to light with the
transactions were not always convenient or announcement that SAMA is planning to go
possible. In a recent PwC survey of more than live with its open banking initiative during
1,000 respondents in the United Arab Emirates, the first half of 2022. This move is expected
Saudi Arabia and Egypt, 53% said they had used to see the rise of various fintech services,
smartphone payments for online deliveries creating increased competition and choice for
during the pandemic. Moreover, more than 90% consumers.
of those that did so reported that they would
continue using smartphone payments even Bahrain has also been very active in this regard,
after the crisis had subsided. putting in place regulations to cover regulatory
sandboxes, open banking, crypto-assets, and
Regional governments have understood the robo-advisory and payment services.
scope for rapid fintech growth and have sought
Dr. Antoine Khadige
Principal

87 JUN-AUG 2021