Rising consumer spending, massive pools of capital and closer financial ties with the rest of the world is turning Middle Eastern countries like the United Arab Emirates, Qatar, and Saudi Arabia into attractive markets for fintech firms with global ambitions.
The Middle East presents the same opportunities that markets like Singapore did about eight years ago, says Michele Ferrario, founder of StashAway, a Singapore-headquartered robo-advisory firm and one of Fortune’s Fintech Innovators Asia. In countries like the UAE, there’s a big pool of people with money, but not a lot of investment options, apart from “not too friendly” banks, he says.
“[There’s] low competition and a regulator that’s future friendly,” Ferrario said of the UAE.
StashAway expanded its high-net-worth offerings, which offer advisory services and low fees to customers with between $2 million and $10 million, to the Middle Eastern country earlier this year.
And after building out its UAE business, Ferrario says, StashAway is eyeing further expansion in the Middle East.
Fintech hub
StashAway is far from alone, as the Middle East is becoming a fintech hub in its own right. McKinsey predicts that fintech funding in the Middle East, Pakistan and North Africa region could grow to as much as $4.5 billion by 2025.
In July, Thunes, a Singapore-headquartered global payments infrastructure provider, which already offers services in the Middle East and North Africa markets, highlighted Saudi Arabia’s attractiveness due to the kingdom’s desire to develop its digital infrastructure as a part of a plan to reduce the economy’s reliance on oil. It helps, too, that 97% of residents in the country are on smartphones.
Besides StashAway and Thunes, several other Asian fintech startups have also expanded their services to the Middle East, hoping to tap into financial flows from tourists and overseas workers. Payment services like Airwallex and the Philippines’ GCash offer their services in Middle Eastern countries like Israel and Qatar. Even big players like Ant International aren’t ignoring the region. The Alibaba affiliate is working with Saudi Arabia’s Ministry of Investment as it looks to use the kingdom as a gateway to the wider Middle East market.
It’s part of a larger drive by Asian financial hubs like Hong Kong and Singapore to deepen links with the Middle East. The former in particular is forging new links with Saudi Arabia,…
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