In its recent report, red_mad_robot highlights the most prominent financial technology (fintech) trends in the region including, Open Banking, sustainable finance, Artificial Intelligence (AI), and cryptocurrencies. The report, Fintech Trends in 2024, forecasts a staggering 25 percent annual growth in the Open Banking market across Arab countries over the next five years. Moreover, it outlines a compelling trajectory that could see the Arab Open Banking market reach an unprecedented value of $1.17 billion this year. This signals a drastic shift in the financial landscape of the Middle East.
Sustainable finance
As sustainable finance becomes a global focus, the UAE banking sector boldly pledged to mobilize over AED1 trillion in sustainable financing by 2030. This ambitious commitment reflects a dedicated effort to steer financial practices toward a more environmentally and socially responsible future.
Inspired by sustainability commitments made during COP28, the report predicts a significant shift towards green blockchains and eco-friendly features in banks’ apps. Moreover, the report expects fintech companies and banks to incorporate Environmental, Social, and Governance (ESG) practices into their products and operations. Hence, this aligns with the growing global focus on sustainable finance.
Blockchain and AI reshape Fintech
The red_mad_robot report delves into the transformative impact of cutting-edge technologies like blockchain and AI. It highlights the revolutionary role these technologies will play in reshaping the fintech ecosystem in the Middle East. Moreover, it provides a glimpse into the future of financial innovation.
Financial systems
Central Bank Digital Currencies (CBDCs) are gaining global momentum. More countries are exploring projects that integrate CBDCs into their financial systems. Therefore, the report emphasizes the potential of CBDCs in facilitating cross-border transactions. Thus, it revolutionizes retail payments and fosters financial inclusion, all while reducing production costs for central banks.
Moreover, governments in the Middle East, including the Central Bank of the UAE, actively support the growth of fintech payment ecosystems. Initiatives such as the UAE AI & Robotics Award for Good underscore the region’s commitment to fostering AI-driven businesses and services. The report also anticipates the integration of AI capabilities into digital products, AI regulations, and the adoption of Generative AI to reshape the fintech landscape.
DeFi and crypto development
Decentralized finance (DeFi) and cryptocurrencies are among the most prominent fintech trends of 2024. The report highlights the region’s growing focus on the tokenization of real estate, financial tools, and various asset classes in 2024. This strategic move aims to expand export potential and attract new users and investments. Moreover, it promotes the adaptation of stablecoins as payment methods both online and offline, marking a significant step towards the mainstreaming of DeFi and cryptocurrencies.
Read: Saudi retail banks garner growing positive sentiment: New PwC Middle East, DataEQ report
Additional trends
Among the fintech trends that are gaining momentum in the region is niche fintech. red_mad_robot’s report identifies niche fintech as a growing trend, focusing on serving products to targeted categories of consumers. Additionally, the report emphasizes upgraded security, including the widespread adoption of biometric authentication. It also addresses the critical need for robust security measures in the evolving fintech landscape.
As the Middle East propels itself into a fintech-driven future, red_mad_robot’s comprehensive report serves as an indispensable guide for stakeholders, investors, and enthusiasts. It provides insights into the dynamic trends shaping the financial landscape of the region in 2024 and beyond.
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