More FinTech startups launched in MENA than startups in any other sector. Exactly 105 FinTech startups had launched by the start of 2016 and Lebanon is at the forefront of innovation in the field regionally.
With a banking sector that represents one of Lebanon’s main pillars and a technology hub flourishing in MENA, the interdependence and interaction of finance and technology has become inevitable. Financial technologies or FinTech is the use of technology to solve banking and other problems in the financial sector, therefore making financial markets and systems more efficient.
We are witnessing the gradual rise of technology companies offering a range financial solutions, from crowdfunding and peer-to-peer lending to algorithmic asset management and thematic investing. Technology is disrupting payments, data collection, credit scoring, education lending, digital currency, exchanges, working capital management, cyber security and even quantum computing.
FinTech provides ample opportunities for both financial professionals and entrepreneurs to innovate and lead disruptive startups in the region. Below are six reasons why FinTech will dominate Lebanon and the region’s future financial markets.
This number has been growing by 39% annually since 2010, surpassing education, energy and healthcare startups in the region, and is expected to reach 250 by 2020.
Subsidies and special programs such as The UK Lebanon Tech Hub as well as the famous Circular 331 have identified Lebanon’s huge growth potential in financial technology, well-being (healthcare, fitness and food lifestyle) and retail ‘visualisation’ technology, fuelled by opportunities for expansion in the MENA region.
E-commerce is thriving in the region, with a 20% projected increase within 4 years. The online market is growing rapidly and so is the parallel need for advanced platforms and payment methods as well as cybersecurity.
The newly announced adoption of an e-government in Lebanon will surely widen the possibilities and facilitate the integration of FinTech solutions. Ministries and branches of government will soon have the infrastructure to offer and apply FinTech innovations.
FinTech startups canserve customers who do not hold a bank account and who account for 86 percent of the adult population in the MENA region. This underserved population provides a huge opportunity for FinTech solutions to extend access to financial services outside of banks.
We are currently witnessing the arrival of crowdfunding, lending, blockchain and particularly payment and exchange FinTech businesses emerging across the region. Since the early days of FinTech era, payment solutions and startups have remarkably emerged with an ever increasing rate.