How Abu Dhabi boosts FinTech industry in the UAE
Earlier in the year the president of Abu...
When it comes to economic development, the capital city of the UAE, Abu Dhabi is paving the way in the region.
Earlier in the year the president of Abu Dhabi established a three year accelerator programme known as Ghadan 21. The programme aims to enhance competition within the region reducing its economic reliance on oil and gas.
Did you know? Abu Dhabi National Oil Company (ADNOC) currently provides 90% of the government's revenue.
As a result of the economic development plan, Abu Dhabi has seen a boost in growth for its Fintech industry, with Dubai International Finance (DIFC) registering over 100 Fintech firms across the MEASA region.
Adding to the region’s economic development, Geneva Fintech Association (GFA) and MENA Fintech Association (MFTA) signed a memorandum of understanding (MoU) - during the Abu Dhabi Fintech Festival (ADFF) - to promote inter-regional growth.
The new partnership between GFA and MFTA aims to build connections between the two regions to grow their respective cutting-edge Fintech industries. The two associations share the same goals of wanting to promote the development of new technology within the Fintech industry as well as supporting and developing education and providing an accessible platform for as many people as possible.
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Both GFA and MFTA commented on the signing of the MoU:
“The GFA and the city of Geneva have been exceptionally proactive when it comes to working to develop, educate and build relationships with key local and global Fintech players. Combining forces with MENA Fintech will allow for a growing global conversation, with the ultimate aim of staying ahead of the curve in this new and exciting era for the world of Finance,” said Sébastien Flak, President of the GFA and Director of Fintech Solutions at Geneva Management Group (GMG).
“The UAE’s development over the last decades has been nothing short of phenomenal. MENA Fintech is a natural extension of the development plan for the region and partnering with the GFA, with roots in finance going back hundreds of years, is indeed an exciting development. With our finalized plans with GFA with core focus on enablement and creating what we call a Fintech Trade Bridge we look forward to what we expect to be a fruitful and game changing partnership by setting new precedents,” said Nameer Khan, Chairman of the MFTA.
For more information on all topics for FinTech, please take a look at the latest edition of FinTech magazine.
FIVE things fintechs must do to keep investors onboard
New investors flocked to the stock market during the COVID-19 pandemic. Thirty-eight percent of investors said they had never had a brokerage or similar account before opening one in 2020.
Low or no-fee trading options have helped accelerate the trend – nearly half of new investors said they accessed their account primarily through a mobile app. As FinTechs, how do we create the trust needed to keep new investors in the market and create a fruitful customer experience for them?
The financial industry does a disservice to individual investors if we merely offer tools that focus on making money quickly, an approach that usually backfires. Instead, the surge of interest presents an enormous opportunity for those who want to help more consumers use financial technology to educate them on responsible spending, saving, and investing in order to achieve financial wellness current fintech tools have welcomed individual investors in the door.
Now, it’s time to focus on education and improving their experience going forward. There are several ways those of us in fintech can step up to shape the future of retail investing so that it works better for everyone, starting with the following areas.
Equal access to financial wellness education
Financial health should be available to everyone — but today, not everyone has the educational resources to achieve it. One study shows that only 3.9% of students from low-income schools were required to take a personal finance class. What they aren’t learning in school or from family members, fintech companies can provide on their platforms.
The companies should move from solely offering financial services to a more responsible model of education, advice, and prescriptive choices to help consumers develop better habits and make wiser financial decisions. Not only can they empower consumers and bridge historical wealth divides, but they can also stimulate growth by opening up new consumer segments.
Just as we’ve come to expect that our fitness routines are tailored to our individual bodies, we’re also ready for finance tools that go beyond one-size-fits-all solutions. But only six percent of financial institutions say they’re using the kind of technology that allows them to deliver a deeply personalized experience. Fintech tools need to reflect that financial success looks different for each of us.
For one consumer, it may mean providing guidance on how to pay off student loans early; for another, it may mean prescriptive actions that enable them to stick to a budget for the first time; for a third, it could look like prioritizing environmental, social and governance (ESG) investments, so that her portfolio aligns with her political beliefs.
Now, we are seeing financial technology beginning to meet the demands of personalized finance in a substantial and meaningful way.
The rise of AI-Powered Advice
Big-picture advice and predictive guidance used to be a feature of high-end financial advisory firms — a perk only available to those who could afford it. But thanks to rapid advancements in data analytics and artificial intelligence (AI), that kind of holistic advice is now more accessible than ever. AI-driven robo-advisors can parse many different streams of financial information, delivering customized answers to key questions: Is it time to buy a home, or is it smarter to keep renting? Can I afford to take out another student loan?
Intelligent connectivity powered by AI can anticipate consumers’ needs and next steps, making proactive suggestions that guide them along the path to financial wellbeing. Fintech companies can also help consumers identify when their financial picture becomes too complex for a robo-advisor, and help them find a human financial advisor to meet their needs.
Focus on financial mental health
New investors are quickly finding that the market can be overwhelming. That’s not surprising, financial anxiety is common and studies show that financial stress can have an impact on mental health for some.
It’s not enough for fintech companies to give retail investors access; they also must provide the guidance and support that help consumers manage their financial well-being. Educational tools can ensure that consumers are well informed about their options.
Predictive analytics can anticipate consumers’ questions, serving them key information and insights before they ask. Features that emphasize a comprehensive notion of financial well-being, rather than short-term wins and losses, can also help ensure that consumers are keeping their eyes on the bigger picture.
Gamification for good
The surge of gamification apps has done an impressive job making investing as engaging as playing a video game or joining a social media platform.
Much of the current use of gamification emphasizes short-term thinking, but there’s also an opportunity to help consumers think more broadly about their overall financial picture. One example is peer benchmarking, a feature that enables help consumers to see how their financial habits compare to those of friends and fellow consumers.
Gamification can also be used to incentivize making smaller, smarter choices — for example, rewarding saving over making an impulse buy.
The future of fintech is about more than just broadening access to the markets. It’s about making sure more individuals have access to the tools that can help improve their financial well-being—in the ways that suit their own circumstances and needs. The potential to act within their own set of individual priorities, with their long-term financial wellness in mind is much more empowering to a consumer than simply relying on short-term, high-risk investments.