The United Arab Emirates (UAE) has fostered a thriving fintech sector through a combination of supportive regulations, a buoyant domestic economy, and growing appetite for advanced digital financial services.
As a result, the country now hosts the greatest number of fintech startups in the Middle East and North Africa (MENA) region.
In 2023, these companies managed to secure US$128.4 million in funding in 2023, bringing the total investment since 2021 to US$567.8 million, according to an S&P Global Market Intelligence report. This substantial financial backing reflects the UAE’s leading role in the fintech sector within the MENA region.
Experts predict that the UAE’s fintech sector will achieve a remarkable gross valuation of US$3.1 billion in 2024, according to Wired.
Within the UAE, Dubai and Abu Dhabi, two major financial hubs in the country, have emerged as key players in the MENA fintech landscape. Both cities are recognized for their extensive fintech ecosystems, favorable regulatory environments, and significant investment opportunities.
Dubai: a major tech and investment hub
Dubai is a leading fintech hub in the UAE, distinguished by its supportive regulatory environment, advanced infrastructure, and abundant funding opportunities.
The emirate’s regulatory bodies play a key role in the growth and success of the fintech sector by establishing clear and comprehensive regulations, including progressive frameworks for digital assets and financial services.
The Virtual Assets Regulatory Authority (VARA), for example, was established in 2022 to oversee the burgeoning field of virtual assets within Dubai, excluding the Dubai International Financial Centre (DIFC). The entity has introduced a licensing framework tailored specifically for virtual assets, contributing to the sector’s growth.
Similarly, the Dubai Financial Services Authority (DFSA), the independent regulatory authority which regulates financial services in the DIFC, has played a crucial role in fostering innovation within the free zone, helping it grow into one of the largest fintech hubs in MENA with more than 900 registered fintech companies, according to DIFC Governor Essa Kazim.
DFSA tries to ensure that its regulations remain practical and effective. This process helps maintain a regulatory framework that not only meets current needs but also anticipates future developments in the sector.
Dubai’s fintech ecosystem is not only large and diverse, it’s also highly international, reflecting the emirate’s status as a global business hub. Many fintech startups are attracted to Dubai for the hub’s global connections and its access to the broader MENA region.
Dubai’s fintech sector is also supported by the emirate’s robust funding landscape, which includes venture capital (VC) firms, angel investors, and government-backed programs. This ecosystem further benefits from accelerators and incubators, such as the DIFC’s Fintech Hive. This program has seen over 200 startups graduate, collectively raising over US$600 million in funding. Notable graduates include Norbloc, Sarwa, Tarabut Gateway, and Zywa.
Abu Dhabi: a emphasis on regulatory support and compliance
After Dubai, Abu Dhabi is another leading fintech hub in the UAE, distinguished by its strong emphasis on regulatory support and compliance.
Like the DIFC in Dubai, the Abu Dhabi Global Market (ADGM), an international financial center and free zone, plays a key role in the emirate’s fintech development, and its regulatory body, the Financial Services Regulatory Authority (FSRA), is recognized as one of the most progressive and innovative regulators in the region.
The FSRA has introduced several initiatives to support fintech innovation, including the ADGM RegLab, a regulatory sandbox that allows fintech companies to test their innovations in a controlled environment under the regulator’s guidance. This sandbox provides an opportunity for in-depth engagement with fintech firms, enabling the FSRA to develop some of the most comprehensive regulations governing fintech and digital financial services in the region.
To further support fintech and the digital transformation of the financial services sector, the FSRA has also launched the ADGM Digital Lab, a digital environment where fintech companies and industry stakeholders can co-create and test solutions under the guidance and supervision of the regulator.
The ADGM is also home to Hub71, a tech ecosystem that brings together renowned corporations, national champions, and prominent investors to help founders grow and scale disruptive technology companies globally from the UAE’s capital. Hub71 provides startups with resources, mentorship, and funding opportunities, positioning the emirate as a launchpad for tech-driven financial services.
Abu Dhabi’s fintech ecosystem emphasizes serving the local market and focuses on strategic sectors such as blockchain technology and regtech. In November, the ADGM introduced the Distributed Ledger Technology (DLT) Foundations Regulations, providing a comprehensive framework for DLT foundations, decentralized autonomous organizations (DAOs) and the broader cryptocurrency industry. This was followed in 2024 by a series of partnerships with organizations such as the Solana Foundation and Hacken to advance blockchain innovation and blockchain security.
Finally, in the field of regtech, the FSRA has been at the forefront of developing intelligent regtech tools. A notable collaboration was established in November 2023 between the FSRA and the Mohamed bin Zayed University of Artificial Intelligence. This partnership aims to harness artificial intelligence (AI) to improve regulatory compliance and operational efficiency in financial services.
One of the key initiatives under this collaboration is the enhancement of the FSRA’s Risk Analyser, an AI-driven platform that helps the regulator assess and manage risks across governance, financial stability, and anti-money laundering associated with supervised firms.
