FinTech regulations started growing in the Gulf in 2017. With time, the region turned into a healhty environment for FinTech activities and regulations with many governments competing to become the number one FinTech hub across the GCC (Gulf Cooperation Council).
In 2019, the Milken Institute Center for Financial Markets traveled to the UAE (United Arab Emirates) to discuss with professionals interested in building and marketing an ecosystem which supports innovation across the financial services sector. The institute focused mainly on the UAE and Bahrain since both of those countries receive the most VC (venture capital) investments in the area and have the most advanced regulations related to FinTech.
What the Milken Institute found was that there are three main reasons for the emerging FinTech hubs in the UAE and Bahrain. The first one being the availability of an ecosystem that is friendly to new financial alternatives, second the existence of a government that is at the center of all efforts leading to innovative projects and third, the unwavering interest of attracting international talent which acts as a catalyst for domestic innovation.
Even though and according to the Milken Institute, the UAE and Bahrain are leaders in the region when it comes to creating ecosystems that support FinTech advancements, this leadership is by far not guaranteed in the future. Many neighboring governments plan to compete in order to strengthen their FinTech ecosystems.
The Bahraini and Emirati governments are both looking into opportunities to break away from their dependence on the energy sector. Therefore, they welcome FinTech startups with open arms by creating supportive ecosystems for all innovative ideas to grow. Both countries are somewhat early in their FinTech developments, others, however, are already tring to catch up.