Developing a FinTech ecosystem in the GCC

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Executive summary

In the U.S. and Europe, financial technology (FinTech) “ecosystems” have stimulated technological innovation, made financial markets and systems more efficient, and improved the overall customer experience. These ecosystems — composed of governments, financial institutions, and entrepreneurs — have also shown that they can energize the broader local economy by attracting talented, ambitious people and becoming a locus of creative thinking and business activity. Until now, the Gulf Cooperation Council (GCC) countries1 have not established particularly deep FinTech ecosystems. However, that could soon change because the four key design elements necessary for FinTech ecosystems are present in the GCC. These are: the business environment/access to markets, government/regulatory support, access to capital, and financial expertise.

Moreover, a consensus is emerging among governments and financial institutions that nurturing these ecosystems is important and beneficial for the region. Indeed, there are already some success stories in the GCC, particularly in the United Arab Emirates (UAE) where incubators, enterprise development funds and programs, and innovation hubs are supporting the creation and growth of local entrepreneurs. Given the benefits of FinTech ecosystems and their viability in the GCC, we recommend several immediate steps, ideally done in coordination with one another, for governments and financial institutions to nurture these ecosystems.

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Next steps for GCC governments and the financial sector

To capitalize on this potential and nurture a FinTech ecosystem, governments and financial institutions should take 10 immediate steps, ideally done in coordination with one another. The measures are equally divided between GCC governments and the financial sector.

GCC governments should:

  • estimate the financial benefits of establishing such an ecosystem
  • develop their strategy for setting up a FinTech ecosystem
  • develop the ecosystem’s operating model and governance structure
  • select financial institutions to partner with, and prioritize the type of startups the government wants to encourage and support
  • if the government is setting aside a zone of development for an innovation hub, establish a set of criteria to guide the best use of the space

Financial services players should:

  • develop a FinTech business case and understand the financial risks and opportunities
  • if an innovation hub is being created, define the financial structure of the hub and the role of stakeholders
  • identify the business needs of those in the hub and coordinate with the government
  • create a screening and selection process for entrepreneurial tenants of the hub
  • prioritize financial startups for potential mergers, acquisitions, and joint ventures


In the GCC, where FinTech ecosystems have yet to take root, governments will have to play a more significant role than in established markets. However, the GCC does have an advantage over other emerging markets: All four critical elements for a FinTech ecosystem are already in place. The challenge is to achieve the necessary level of coordination to make the ecosystem work. If the region can rise to this challenge, the rewards for the financial industry and the broader regional economy could be significant.

1 The GCC consists of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates.

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Jean Salamat

Jean Salamat

Principal, Strategy& Middle East

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