The Banking Executive Magazine - March 2023 Issue

ISSUE 171 MARCH 2023 the BANKING EXECUTIVE 51 FinTech and AI Chornicle Industry experts have refuted the no- tion that the fintech market is over- saturated in the Middle East and North Africa (MENA) region while calling out traditional financial sys- tems for failing to recognise con- sumer needs. “There might be saturation due to overpopulation in one specific sec- tor, but if you take a macro level, the region is a goldmine. I said this five years ago and I say this now,” said Nameer Khan, Chairman and Found- ing Board Member of the MENA Fin- tech Association. While the Far East and some Western markets may have reached saturation point in certain sectors, the ecosys- tem in this region is still in its infancy, Khan said while speaking at an in- dustry panel at the recently con- cluded Step Conference 2023 in Dubai. “There are 700+ Fintechs in the re- gion, with 600+ based in the UAE [United Arab Emirates] alone,” added Khan. “If you look at the num- bers, $800 billion was invested in the [industry in the] first half of 2022 alone, indicating that there is a strong appetite for investment that continues to draw in venture capital- ists.” Saad Ansari, co-founder and CEO of Xpence, a smart business expense management platform based in the UAE, cited that in this region alone, the SMEs sector was a $1.2 trillion market with less than five per cent benefitting from any funding. “If you look at it from their perspec- tive, the Fintech market has a long way to go. But on the consumer side, several peer-to-peer sharing apps and financial wallets could be heading towards saturation,” he stated. Padmini Gupta, CEO and co-founder of the social finance platform Xare, pointed a finger at traditional bank- ing systems that were fuelling the rise in Fintech solutions. “I will argue that banking is oversat- urated, and Fintech is actually trying to fill consumer needs,” she said. “You need to fill market needs to the point where the consumer wins. I don’t see that happening right now. And Fintechs are finding those niche markets, they are finding better prod- ucts, and they are finding it faster.” Sonia Gokhale, Founding Partner of VentureSouq, a MENA-based venture capital firm investing in tech compa- nies, said the Fintech industry still had potential to grow exponentially in this region. “We were asked in 2020 whether there were enough Fintechs in this region and there was such a hype around the sector that gave the ap- pearance that we had hit [a] peak,” Gokhale said, but the road is a long one, according to her, with many more milestones to hit in the process. INDUSTRY EXPERTS REFUTE FINTECH MARKET SATURATION IN MENA