Have you used the mobile application of your bank for transactions, taken part in an initial coin offering or used cryptocurrencies to purchase goods? If so, you have already been deeply affected by fintech, which is rapidly changing the global structure and framework of finance and investment as we know it.

Conversely, if you have lost money investing in highly speculative cryptocurrencies or wasted hours talking to a robot on the phone without solving your banking issue, then you have also experienced first hand that ‘all that glitters is not gold’ in this highly dynamic field.


However, fintech is fundamentally changing the areas of digital payments, lending and saving while merging entire sectors such as mobile networks, banking and global investment. This creation of new products and services bears enormous growth potential for start-ups and investors. According to Statista, the fintech transaction value in the Middle East and Africa (MEA) region will be $6.89bn in 2018, with digital payments the largest segment with a growth rate of 14% a year.

Given the enormous potential, fintech has been identified as the 'next big thing' in the MEA region, sparking a vicious competition among the financial hubs trying to accommodate the big players as well as start-ups. Investment funds loaded with up to $100m, low set-up costs and ‘sandpits’ for new ideas and transparent regulations are a few of the enticements that Dubai, Abu Dhabi and Bahrain are using to attract creative minds internationally.

Dubai International Financial Centre’s FinTech Hive reports a 300% rise in applications in 2018, showing that tech companies appreciate this type of accelerator. However, the real ‘fintech magic’ is happening in Africa, where technology has been making the concept of financial inclusion a reality, transforming the financial and investment ability of millions of people and creating new businesses.

In fact, fintech has become so important for Africa that Ecobank names it as one of three important growth drivers of the sub-Saharan economy in 2018. And the most important aspect of this development is that, unlike other sectors, local talent tackling local problems is driving fintech.

Starting from M-Pesa using simple phones for money transfer more then a decade ago to IroFit, which uses mobile networks to tackle the missing internet connectivity in Africa, local start-ups show a deep understanding for the challenges in the domestic or regional markets and have the ability and creativity to come up with a suitable solution. Apart from all of the other benefits fintech has to offer, this development is probably the most impressive, showing the importance of technology and local talent to the sustainable development and transformation of an entire continent.

Mazdak Rafaty is managing partner of Ludwar International Consultancy and SME adviser to the joint Emirati-German Chamber of Commerce. E-mail: m.rafaty@lic-consulting.com