Why adopting fintech is crucial in the GCC

The adoption of fintech solutions in the GCC region has soared in recent years, with financial services firms and banks seeking the latest technologies in the field.

A recent report by MENA Research Partners found that fintech start-ups in the Gulf region are set to attract more than 10 times the funding achieved over the last 10 years in the next decade.

The report said it expected investment in fintech firms to rise from $150m to $2bn as increasing interest in digital offerings from banks and government initiatives including accelerator programmes in Dubai, Abu Dhabi and Bahrain support the market.

The number of financial technology companies in the region is also estimated to more than double in the next three years, from 130 to 260.

“The Gulf region has a number of advantages over the traditional main markets and the rapid development of fintech will give it the opportunity to create specialist and unique financial services sectors,” opined Mathieu Ghanem, global head of sales and marketing at Abu Dhabi-based international investment firm ADSS.

“In the MENA region companies like ADSS are inputting to the overall regional and global liquidity. This has allowed the UAE to contribute to global markets by being able to set a price across a number of different asset classes. The entrepreneurial nature of the Gulf, investment in high quality balanced regulation and an experience and knowledgeable workforce has led to the early adoption of new systems and technology,” he added.

These have included artificial intelligence (AI), blockchain and digital assets such as cryptocurrencies.

“The game changer for financial services will be the introduction of blockchain, distributed ledger technology. There are many different views on cryptocurrencies and the digitisation of assets. ADSS has looked to embrace these new products and was the first investment firm to offer the ability to trade CFDs in cryptocurrencies in the MENA region,” said Ghanem.

ADSS has developed its own internal blockchain, which links its offices in Abu Dhabi, London and Hong Kong and its trading servers in London, New York and Tokyo.

“The use of transparent distributed ledger technology will allow the financial services industry to develop a new range of products delivering what the next generation of investors is looking for,” stated Ghanem.

Modern markets are fast and dynamic, so systems need to instantly track and act across many thousands of different products, providing services that can be managed and controlled from smartphones or desktops.

According to him, the rapid development in fintech is directly linked to the end users of the products.

“Offering millennials and Generation Z access to financial services which require phone calls to brokers or asking them to look at desktop based systems is no longer an option,” he explained.

“They want transparency, and easy and instant access through technology such as apps with sophisticated AI functionality guiding them to the right choices. They see the financial markets as digital, fast and simple to access, and they want to manage their investments in the same way.”

The company said it is already developing systems to provide this segment of the population with the solutions they want.

ADSS has developed its proprietary trading platform called OREX, which is available as an app or as a web platform and allows clients to trade thousands of financial instruments, from equities to FX, at any-time and wherever they are in the world.

As part of the OREX technology, ADSS is also exploring an eWallet online payment facility. This would include a loyalty points programme where rewards can be exchanged, or traded, as part of a range of financial transactions.

In the future the artificial intelligence based technology behind OREX, will deliver a number of cash management solutions. These will range from simple payments through to accessing thousands of assets and handling complex trading positions. This is made possible by using digital assets to move and store funds and then convert back to fiat currencies, all managed through the eWallet.

“Customers can just tap their phones to pay for a new car or a morning coffee, and to transfer funds to trading and bank accounts, and even send money to friends,” said Ghanem.