By Morgan International Staff Writers
Fintech is big news, both in the UAE, and globally. It is a fairly new financial industry using technology to improve financial activities, often through automation and making use of sophisticated tech such as artificial intelligence. The introduction of disruptive technology in the UAE and wider Middle East is likely to be advantageous for customers but will challenge the traditional banking model. The key areas where fintech has thus far been pervasive are insurance, trading, and risk management. In July 2017, The Dubai International Financial Centre’s Fintech hive selected 11 start-ups to partake in a 12 week accelerator programme which will offer them the opportunity to pitch their ideas to a number of investors in November 2017. Abu Dhabi Global Market (ADGM) announced in August 2017 that it was assessing 22 applications from fintech startups to take part in a regulatory laboratory sandbox programme. This allows successful participants to develop their ideas alongside financial services firms in a lighter touch regulatory environment.
Some of the key innovation areas utilize innovative technologies/areas such as:
- Blockchain and cryptocurrencies such as Bitcoin
- Smartphones and apps
- Robo advisers and robo investors
- Contactless cards
- Payment solutions
These innovations and new industry entrants pose a significant threat to traditional banks and financial advisors, who will be forced to innovate and diversify themselves to survive. There are of course likely to be opportunities for the traditional players to team up with the innovators which will permit old business models to be updated.
In summary fintech allows financial services to be delivered more quickly, cheaply, and conveniently. There are still some concerns around security, but as these issues are resolved, expect to hear a lot more about innovative financial technology solutions in the months and years to come.