The rise of fintech companies in the MENA region

Author: Vahab Hasiri

The Middle East and North Africa are some of the world's fastest-growing markets in the financial, capital, and banking sectors.

  • The population is getting younger, better educated, and more demanding.
  • The average age of the workforce is getting younger.
  • The diversity of financial products and services continues to grow.
  • Regulatory requirements are established to ensure a secure financial system.

These shifts have pushed market players across the region to invest heavily to match or outstrip their international peers.

We can agree that the pandemic had a significant impact on the world. Many industries went out of business, and thousands of jobs were lost. On the other hand, other sectors thrived in this situation and grew more than ever before. One of the industries that gained a lot of attention was the financial sector, especially online trading on the foreign exchange (Forex), CFD, Futures, Stocks, Crypto, etc.

It can be said that online trading received more attention in certain parts of the world than in others. The Middle East and North Africa (MENA) were regions that experienced a significant jump in online trading leading to an increase in the number of brokerage firms in these regions.

Many factors caused this popularity in trading among the MENA region population which we will explore in this article.

The financial crisis in the pandemic

Some of the world’s strictest lockdowns and restrictions were enforced across the Gulf region to battle the coronavirus. They caused devastation across oil-reliant economies already affected by low crude prices. But, as elsewhere around the world, the region’s emerging technology firms were big beneficiaries due to a burst in e-commerce activity as customers sheltered at home.

Remote work

Middle Eastern people are very kind and warm. Face-to-face meetings with tea or coffee are part of the culture, and it is essential to build relationships in such ways. So when businesses were forced to operate online, one of the main difficulties was communication between team members. However, employees realized that they could utilise their time efficiently and work on side projects for extra income.

Online trading as a secondary form of income

Finding a side hustle seemed logical with people spending more time at home and having limited financial resources. Many individuals entered the trading world and used their savings to create an extra stream of income. Investing and trading in certain asset classes such as Forex, Stocks, and Cryptocurrency are very popular. As a result, demand for online trading increased significantly, which led to well-established and start-up brokerages focusing on this market.

Governments’ rules and regulations

Governments in the MENA region have been trying to shift from dependence on natural resources, such as oil and natural gas, to other areas such as financial technology, banking, reusable resources, etc. Certain authorities in the Gulf state, such as the United Arab Emirates, introduced long-term plans to welcome more Fintech companies in their countries and offered specific schemes to encourage the growth of these companies.

What is next?

As a result of the pandemic and Middle Eastern government schemes that targeted technology companies, many well-known brokerages decided to open an office in this region to expand their clientele. At the same time, numerous professional traders in the financial sector decided to launch their own brokerage firm. On top of this, due to flexible rules and regulations in countries such as the UAE, professionals from central Asia and SouthEast Asia are starting to form their brokerages’ firms in this region so that they can work with both their home country clients and local clientele.

Tools for Brokers (TFB) is excited to see the MENA trading industry change and evolve. The company has a long-term commitment to the region demonstrated through many business trips, participation in expos, and ongoing partnerships with local brokerages.

MENA will continue to be one of the main focuses for TFB, and we are looking forward to many projects that we will execute with our local partners.

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