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The Rise of FinTech in the Middle East: An Analysis of the Emergence of Bahrain and the United Arab Emirates

FinTech regulatory regimes started emerging in the Gulf region in 2017. Since then, the region has become a hotbed for FinTech activity and regulatory development, with several jurisdictions competing to establish themselves as the FinTech hub in the region. In February 2019, members of the Milken Institute Center for Financial Markets traveled to the United Arab Emirates (UAE) to speak with stakeholders involved in building, promoting, and/or fostering an ecosystem supportive of innovation within the financial services sector. Our conversations focused on the development of FinTech ecosystems in Bahrain and the UAE—two countries that receive the bulk of venture capital investment in the region and where FinTech-related policy and regulatory activity have spiked within the last two years.

Our discussions illuminated three key factors driving the emergence of Bahrain and the UAE as FinTech hubs in the region:

  1. an ecosystem conducive to new financial alternatives.
  2. an ecosystem where government is at the center of efforts to drive innovation as part of a larger remit, and.
  3. an ecosystem particularly interested in attracting international talent as a means of stimulating innovation domestically.