Financial technology (popularly known as Fintech) has become a major growth driver for the Dubai International Financial Centre (DIFC), helping it to grow faster than Dubai’s overall growth rate.

Essa Kazim, governor of DIFC, said the financial centre has become a major engine of growth for the emirate’s economy and a significant contributor to its GDP.

“It has been growing five folds faster than the average Dubai GDP growth over the last 10 years, contributing around six per cent to its GDP. A key growth driver over the past three years has been Fintech and innovation companies, contributing over 27 per cent of the Centre’s overall client growth,” Kazim said while delivering the welcome address at the Dubai FinTech Summit 2023 in Dubai on Monday.

He credited the strong growth of the sector to DIFC’s heavy investment in the Fintech ecosystem by creating a supportive and agile regulatory framework, providing access to funding, sand-box environments and resources for start-ups and established companies alike.

Last year, DIFC-based Fintech and innovation firms raised over $615 million (Dh2.25 billion) in funding.

According to DIFC FinTech Hive’s 2022 Report, the Fintech sector is expected to double in size from over $135.9 billion (Dh499 billion) in 2021 to close to $266.9 billion in 2027 across the Middle East, Africa and South Asia region.

The Mena region’s Fintech startup and venture capital landscape is booming, with over 800 Fintech startups worth $15.5 billion, according to data by dealroom.co. Dubai alone is home to over 20 per cent of the world’s Fintech businesses, according to the UAE Fintech Market – Growth, Trends, and Forecasts (2023 – 2028) Report by Mordor Intelligence.

Globally, the Fintech sector is predicted to be valued at $305 billion by 2025, said Research and Markets, an intelligence and market analysis firm. Digital payments have been growing exponentially in the UAE and region, especially after the pandemic.

Another survey released by global consultancy McKinsey revealed that 58 per cent of Middle East consumers expressed a strong preference for digital payment methods, while only 10 per cent strongly preferred cash.

A survey conducted by Oxford University found that 40 per cent of the Mena region’s adult population is currently unbanked or underbanked, offering vast opportunities for growth in the payments and cross-border payments sector.

“Not too long ago, the concept of AI (Artificial Intelligence) was pure fiction. Today, however, it has become one of the most popular ways of innovating within the world of finance. Concepts like embedded finance, open banking, and blockchain have taken the world of banking and finance by storm,” said the DIFC governor.