Frost and Sullivan report sees Blockchain adoption in Fintech in GCC
Frost & Sullivan’s recent analysis, Gulf Cooperation Council (GCC) Region Mega Trends, Forecast to 2030 has revealed that the economy of the GCC region is expected to contract in 2020 before rebounding in 2022. It is expected to witness impressive growth through 2030, driven by global and regional mega trends. It has alse revealed that there will be a rise in app-based services and the adoption of advanced technologies such as AI, blockchain, and automation across sectors will lead to the rise of the platform economy in the region, which will present immense growth prospects for investors. There will be wide adoption of blockchain in Fintech sector.
The pandemic and diminishing oil prices caused the contraction in 2020. However, in the optimistic scenario, there will be signs of economic recovery by Q2 of 2021. This will be due to member nations of the council—the United Arab Emirates, Saudi Arabia, Qatar, Oman, Kuwait, and Bahrain—emphasising economic diversion from the oil sector to non-oil sectors and strategy implementation to encourage private enterprises to invest in and develop projects across all major sectors of the economy. Advancement in technologies such as 5G, shift towards digital platforms and market places will pave the way for new business models. The business environment in the region will experience a transformation that will have a far-reaching impact on economic trends and social dynamics. Further, with the surge in digital penetration in the next decade, the GCC’s non-oil sectors—retail, healthcare, education, mega-event projects, and renewable energy—will continue to dominate the economy, which will lead to the emergence of Mega Themes, creating future opportunities in the region.
“Besides increasing mobile and internet penetration, several digital initiatives to improve city governance to citizens’ lifestyles will be the highlight of the region,” said Malabika Mandal, Visionary Innovation Group Consulting Analyst at Frost & Sullivan. “Going forward, sports events, religious tourism, and mega infrastructure projects are expected to catapult the GCC region into a zone of international interest and contribute to the region’s economic prosperity.”
Mandal added: “Mobility solutions in GCC are moving from car-centric to customer-centric solutions, thus providing a more convenient and integrated mode of transport; for example, mass transit such as metro, rail, ride-sharing, car-hailing, etc. Additionally, the 3Ds of power—decarburisation (use of renewable power, i.e., less dependence on carbon), decentralisation (by deploying smart grids and advanced electricity storage and managing systems), and digitalisation (digital transformation of utilities by using IoT capabilities, advanced analytics, machine learning, and other forms of artificial intelligence (AI))—are creating opportunities for a new era of vendors, delivering IT-enabled solutions.”
The rise in app-based services and the adoption of advanced technologies such as AI, blockchain, and automation across sectors will lead to the rise of the platform economy in the region, which will present immense growth prospects for investors, such as:
- Business-to-business (B2B) eCommerce is a promising sector and expected to grow by 234.78% (2030) more than business-to-consumer (B2C) eCommerce.
- Widespread adoption of blockchain is expected in the fintech sector.
- The GCC is emerging as a global trading hub because of its strategic location connecting Europe, Asia, and Africa.
- Policy reforms, increasing awareness, and a large expatriate population are encouraging private-sector growth in education in the region.
- The GCC chemicals sector is embracing transformation through increasing diversification of value-added products.