The adoption of technology and digitization of services and operations during a global pandemic has suddenly brought the UAE’s fintech into the spotlight. Mainly unaffected by the negative economic headwinds, these companies are becoming the facilitator of digital change and are accelerating the digitization of financial services in the Emirates.
The fintech industry has emerged as a lifeline for small and medium-sized enterprises (SMEs), which represent 96% of all companies in the Middle East but account for only 7% of total bank lending. This is the lowest level in the world, prompting the industry to make necessary changes like creating platforms such as crowdfunding and bringing investors closer to these enterprises. This alternative lending and investment market is expected to grow up to $35 billion by 2024, which would bring great opportunities for the entire SME ecosystem.
Many companies in the UAE like Xpence are also offering digital-only business accounts that combine bookkeeping and banking in one app and provide integrated tools for invoicing, VAT payments, cash flow management, and integrated payment gateways. According to deVere, fintech apps usage has increased by almost 72% in just one week during the beginning of lockdown.
AJMS Global Consulting, with its digital platform called Digi KYC, has shown a cost-effective way for financial institutions to evolve digitally as well. Abhishek Jajoo, CEO of AJMS Global Consulting, believes, “With Digi KYC, we have shown that there can be a business model that eliminates the upfront investment and generates revenue based on the usage, thus cutting the cost by at least 50%”.
However, such innovations would not have happened if it wasn’t for the fintech industry’s ability to quickly gauge the changing consumer spending behavior and increased online financial transactions. This fast-thinking has led the industry in coming up with innovative digital services to shift away from cash and towards contactless or digital payments instead.
There will likely be more improved and innovative digital financial services in the near future as e-Commerce grows exponentially with almost all businesses going digital and consumers abandoning offline shopping for online shopping. Judging from the progress made by UAE's fintech firms, it is safe to assume that they will be a game-changer in this shift by offering digital financial platforms to ensure increased business and superior customer experience.
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