Ways GCC Can Flourish In Fintech: In the last decade, digital and mobile inventions have caused distortions in key sectors and changed the expectations of consumers immensely. These technological advancements have turned the tables in the procurement of basic commodities, transportation, and socialization with the exception in the finance sector which beams Fintech to be an assurance though not fundamental to financial activities. Since the worldwide financial recession of 2008, financial institutions were taking precautions with regards to regulations until 2015 when Fintech emerged. The evolution of Fintech has brought effectiveness to financial services and the overall customer experience in certain segments that are digital-focused.

A while ago, this has changed drastically and today, banks and other financial institutions have come to realize that client expectations have been changing as they try to keep up with regulations e.g. money laundering. This shows that Fintech is not just a niche but an aspect that affects finance on a global scale. No wonder it is fundamental to financial service provision at the consumer, institutional, and corporate levels. It also touches all verticals from investments, remittances, insurance, payments, lending, and banking.

It started as a mere service in the financial industry but today Fintech stands as a competitor. In a recent case study involving 1300 financial executives from different countries, 88% of the participants showed faith in Fintech as an independent operator. Even though they would incur a 24% loss of revenue in the first 3-5 years, they still believe that Fintech is the ideal provider.

The same risk goes to the second world nations. Fintech is capable of providing effective financial services to billions of people living in the poorest areas by fostering economic development. The second world nations are sparsely populated and physical banks are limited. This is where Fintech comes in- to provide mobile banking technology to cater for the basic financial needs anywhere across the world at any time.

With such a global solution, the billions of people without access to proper banking can finally conduct online business, save their finances electronically, and transfer money securely. About 50% of the United Arab Emirate population struggles with access to basic banking services due to the minimum salary limits set by local banks.

In the developing nations, Fintech targets 3 verticals namely core banking, peer-to-peer payments and remittances, and microfinance. In China, the peer-to-peer payments and remittances will play a huge role not to mention that in 2016, the social payments amounted to $3 trillion with two companies on the forefront- WeChat Pay and Alibaba’s Alipay. India will benefit from core banking given that 21% of the unbanked individuals are found in this country. Through JAM trinity, 295 million accounts have been opened, all amounting to $10 billion. In a similar trend, the microfinance sector in Africa has increased drastically over the last decade with loan book growing from 600M to 9B dollars and the accounts increasing by 147 million.

So, GCC can thrive well in Fintech due to the peculiar combination of developing and developed markets. There are three actions GCC nations should take to boost Fintech:

• Increase the digital workforce

There is a need for a huge number of digital experts in GCC countries. Apparently, only 1.7% of the workforce consists of digital professionals which are way below the EU’s- 5.4%. The most important niches in Fintech are digital marketing, system integration, and user interface design. The necessary skills include app development, cybersecurity, and data analytics.

• Provide growth opportunities for Fintech

For Fintech to benefit a wide range of consumers, GCC countries should give room for the organization to expand. This means changing open data regulations and frameworks to facilitate collaboration with banks in order to reinforce digital services like electronic authentication of clients. It could also mean creating harmonious digital payment platforms for electronic money exchange like what the Reserve Bank of India does.

• Increase capital

Finally, there is a need for capital access in GCC. A PwC report shows that since 2014, $40 billion has been invested in Fintech startups and the fund is growing at 41% per annum. Most of these startups are in the US while the rest of the European Union. GCC governments can arrange to provide Fintech capital or the money can be accumulated as venture capital or incumbents.

Since Fintech is a potential digital growth opportunity, GCC countries must not hesitate to leverage the financial inclusion for the sake of economic development and growth of digital sectors.