By TBY | Qatar | Feb 07, 2023
In the financial services space, fintechs are the Swiss Army knife of digital solutions.
The inherent efficiencies of the digital space have brought fintechs and the start-up ecosystem into sharp relief. Often visionary start-ups in origin, these firms bring financial participation to the unbanked, enhance traditional banks’ digital personas, and fuel the inexorable drive towards a cashless society.
While the UAE claims the lion’s share of fintech investment (70% in 2019), Qatar’s technology-oriented initiatives are making headway. As Group CEO of Doha Bank, Raghavan Seetharaman, told TBY, “All the dynamics in the global space are changing. Apple Pay, Google Pay, and other digital wallet tools are coming on,” he says, “and there is tremendous transformation taking place on the payment side.
Fintech itself represents 85-95% of payments, so there is a revolution taking place.” Indeed, by tapping a wider audience of SMEs and entrepreneurs, the financial services sector facilitates economic diversification—a pillar of the nation’s National Vision 2030. Small wonder that fintech is a key component of the Second National Development Strategy 2018-2022.
Qatar’s Fintech Scene
Qatar has a well-established financial services arena, home to giants such as Qatar National Bank (QNB), the Middle East’s largest bank by assets. This environment is in and of itself a huge factor in fintechs’ ascendency. Moreover, Qatar’s digital economy is advancing in term of interaction between government, business and citizen, business and consumer, and business with business. Meanwhile, e-commerce and online transactions have taken root like never before, offering convenience for basics like remittances, contactless payment, remote insurance claims processing, and lending to SMEs.
Qatar Financial Centre (QFC) recognized the potential for innovative digital solutions in the frozen world of the lockdown that presaged comprehensive digital adoption. By 2019, QFC, the nation’s one-stop shop for licensing, commercial registration, immigration, and related services, had encompassed 800 fintech, IT, tax, and investment consulting firms and expects to scale 1,000 this year. By its reckoning, based in part on the pronounced arrival of fintechs in Qatar, ICT spend in the as-yet unsaturated market is set to scale USD9 billion by 2024.
nation has recently seen the launch of its National Fintech Strategy. And meanwhile, the iron is kept hot by the QFC’s Fintech Circle and Tech Talk promoting awareness of the local ecosystem.
Fintechs worldwide are understandably something of a darling child attracting generous state funding and start-up conditions to foster local talent in the disrupted world of international finance. Qatar has laid out a regulatory framework conducive to innovation and the adoption of international standards and best practice.
Qatar Central Bank’s (QCB) National Fintech Strategy is building a fintech ecosystem aimed at motivating international fintechs to set up regional launch-pads in Qatar. Initiatives to foster and retain local talent take the form of funded accelerator and incubator programs and close collaboration between industry and academia.
Qatar Fintech Hub
As 2019 concluded, Qatar launched its National Fintech Strategy, establishing the Qatar Fintech Hub (QFTH) in April of the following year, to realize initiatives championed by Qatar Central Bank. In step with Qatar Vision 2030, QFTH earmarked fintechs as tomorrow’s engine of economic growth, an idea swiftly borne out by international interest shown.
Indeed, by 1Q2021, QFTH was already ranked as the MENA region’s second-largest fintech investor, supported by around 40 fintechs from around the world. The first wave of the QFTH’s dedicated Fintech Incubator and Accelerator programs offering financial, mentorship, and training support addressed payment and emerging technologies to address the challenges of financial institutions.
Over 1,300 applications were received from fintechs overseas developing advanced technologies. QFTH’s second wave that broke in 2020 involved knowledge exchange partnerships with several countries ahead of the digital curve, with Swedish fintech Findec being a notable example. Incidentally, Sweden is a particularly interesting nation, which, having pioneered banknotes in Europe in 1661, is now set to the be first nation to realize cashless adoption and likely to be entirely digital by March 2023.
2022 is the big date for the “beautiful game.” And the World Cup certainly provides an ideal stage for Qatar to showcase cashless payment and champion broader digital adoption.
Qatar Vision 2030 is clear about the catalytic role fintechs are to play in the digital economy, and a burgeoning ecosystem is honing local talent and leveraging international advances in the process. Finally, it is a sobering thought that close to 2 billion adults today lack access to financial services.
Fortunately, as fintechs’ technological solutions extend a supporting hand to the unbanked and small business, they also, as QFTH will tell you, grease the wheels of diversification.