Focused On The Future: Mohammed Alblooshi, Head Of DIFC Innovation Hub And FinTech Hive The Head of DIFC Innovation Hub and FinTech Hive has his sights set on the growth of the fintech space in the UAE- and he hopes to lay the groundwork for that at the Dubai Fintech Summit 2023.
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In 2022, the UAE Ministry of Economy announced that the country's fintech sector had reached a formidable US$2.5 billion in market value- making it the biggest fintech market in the MENA region. Meanwhile, a 2023 Mordor Intelligence report notes that "in terms of innovation, market size, and development potential, the UAE is rated first among fintech centers worldwide." At the heart of this ever-growing ecosystem is the Dubai International Financial Centre (DIFC), an onshore financial hub for the Middle East, Africa, and South Asia.
Launched in 2005, the DIFC has proven to be a stable launchpad for over 4,300 regional and international financial companies, and is today home to over 25,000 employees. But in addition to assisting with matters related to company set up, the DIFC has also played a part in fostering innovative business ideas in the UAE's financial domain for nearly two decades. For example, in 2020, the DIFC launched an Innovation License -which offers subsidized commercial licensing options as well as co-working spaces for startups- aimed at supporting further innovation, creativity and entrepreneurship in the UAE as well as the wider region.
But while the DIFC as a whole has been central to the overall business boom in the UAE, two of its sub-entities have played a more intricate role in specifically shaping the country's fintech sector: the DIFC Innovation Hub and the DIFC FinTech Hive. While the Innovation Hub is a technology hub that is home to 500 growth-stage tech firms, FinTech Hive is a fintech accelerator that offers access to mentorship from leading financial institutions and insurance partners, as well as co-working spaces. And at the helm of both these entities is Mohammed Alblooshi, Head of DIFC Innovation Hub and FinTech Hive. "My role within DIFC Innovation Hub and FinTech Hive is to contribute to the Center's growth by developing and managing their fintech and innovation functions in line with Dubai's vision to become one of the top four global financial hubs," Alblooshi says. "I am involved in working closely with startups, entrepreneurs, and industry experts to create an environment that fosters innovation and growth in the fintech sector. I also play a role in developing partnerships with local and international organizations to promote collaboration and knowledge sharing globally."
With the DIFC thus exuding great influence over easing the funding as well as regulatory challenges faced by its startups and firms, the Center has also attracted the attention of some of the biggest success stories in the global fintech industry. One such example is India-based fintech unicorn DarwinBox –a human resource technology startup- which joined the DIFC in 2022. "Over 1,369 finance and innovation companies are now operating within DIFC, up 22% from 2021, while 291 new fintech and innovation firms joined in 2022 taking the total to 686, an increase of 36%," Alblooshi adds. "To facilitate access to investors, DIFC Innovation Hub and FinTech Hive organize platforms such as investor meetups, pitching sessions, and networking events. The DIFC FinTech Hive also provides mentorship and guidance to startups on fundraising strategies, assisting with pitch decks, financial modeling, and valuation through designated programmes. By doing so, startups can gain exposure to potential investors and strategic partners who can provide adequate funding."
Alblooshi is now gearing up for the inaugural edition of the Dubai Fintech Summit (DFS)- a DIFC-organized event that aims to congregate regional and international industry experts, startups, and investors in one place. Launched under the patronage of H.H. Sheikh Maktoum bin Mohammed Al Maktoum, Deputy Prime Minister and Minister of Finance of the UAE, Deputy Ruler of Dubai, and President of DIFC, the DFS is set to run from May 8-9, 2023 at Dubai's Madinat Jumeirah. With the wealth of resources as well as industry information at the DIFC's disposal, the DFS is set to shed a spotlight on a number of themes including digital payments, embedded and open finance options, regulation and policymaking, as well as cryptocurrencies and the Web3. And with the roster of speakers and industry experts expected to join the event, the DFS is aiming to create a global benchmark for the way enterprises and governments approach financial innovation. "We are expecting to host around 5,000 c-suite, policymakers, investors, entrepreneurs, and innovators from around the world," Alblooshi notes. "As a rapidly evolving industry, fintech's growth depends on keeping up to date with the latest trends, technologies, and regulatory developments. The fintech ecosystem faces persistent challenges worldwide, such as regulatory barriers, limited access to funding, and a shortage of skilled talent, which I hope to see discussed at the event."
Source: Dubai International Financial Centre (DIFC)
Attendees at the DFS will also be able to gain relevant insights on how environmental, social, and governance factors as well as sustainability can determine the future trajectory of fintech ideas. Dubai, of course, would seem the perfect venue for hosting such themes given the many inroads the Emirate has already made within these areas. "Dubai has long been a hub for business owing to its strategic location, world-class infrastructure, and government support for foreign investment," Alblooshi says. "Additionally, its taxation policies, diversified economy, and highly skilled and diverse workforce make it an attractive destination for businesses. Dubai's government has shown strong support for the fintech industry through initiatives like the Dubai Future Accelerators and the DIFC FinTech Hive, which offer startups a valuable platform to connect with investors and industry experts."
Indeed, with 134 fintech businesses employing over 2,000 people in the country (as per the aforementioned Mordor Intelligence report), continued growth and innovation has become something of a given in the UAE's fintech sector. Take, for example, the rise and rise of UAE-based buy-now-pay-later platform Tabby, which raised a US$58 million Series C round in January 2023, becoming the first startup in the GCC to receive funding from PayPal Ventures, the global corporate venture arm of US-based payments platform PayPal.
Tabby's funding success, however, is not an outlier. During a time when most sectors faced a dearth in investments -particularly in 2022- capital continuously poured into the UAE's fintech industry. "Globally, the fintech space is growing quickly," Alblooshi says. "According to MAGNiTT, the MENA, Pakistan and Turkey region has witnessed significant investment activity in the fintech sector, with $2,256 million invested across 351 deals, making it the most invested-in sector in venture capital in terms of both deal volume and count. A key factor contributing to investor confidence in the UAE fintech sector is government funding support, and its prioritization for innovation and technology."
But much of this investor confidence is also being induced by consumer preferences, Alblooshi notes. With the wider public becoming increasingly comfortable with the digitization of financial services, there has been a greater focus on offering contactless payments, digital onboarding, and remote customer services. In fact, a MarketWatch report shows that the region's digital payments market is expected to grow at a compound annual rate of 15.39% till 2026.
"Changing consumer preferences have led to a surge in demand for digital financial services, such as online banking and digital wallets," Alblooshi adds. "Investors are recognizing the growing role of fintech companies, which are disrupting traditional financial institutions by offering more efficient solutions to longstanding problems in the financial industry, such as reducing transaction costs, increasing accessibility, and improving customer experience. Owing to the scalability of digital platforms, lower operating costs, and the ability to reach a global audience, fintech has the potential to generate high returns for investors."
Source: Dubai International Financial Centre (DIFC)
But the key to sustaining this growth will come down to how well fintech firms read market trends, says Alblooshi. "Startups and entrepreneurs must keep an eye out for various trends in the fintech space, including the rise of digital currencies, the increasing importance of analytics and artificial intelligence (AI), and the growing demand for fintech solutions that address sustainability and social responsibility," he explains. "Another growing trend is the adoption of AI and machine learning (ML) to improve risk management, fraud detection, and customer experience. As such, startups and entrepreneurs in the fintech space should be prepared to adapt to changing customer needs and preferences, while continuing to innovate and differentiate themselves in a competitive market."
Now, while consumer behaviors and digital trends have certainly played a role in the rise of fintech successes coming out of the UAE, Alblooshi is also quick to point out that it is the country's regulatory framework that has eased the growth trajectory for so many firms. "The UAE has been proactive in creating a supportive regulatory framework for fintech startups with entities such as Dubai Financial Service Authority and the Central Bank of the UAE playing important roles in this regard," he says. "DIFC too offers a regulatory framework that is designed to complement initiatives that enable innovation and support the growth of fintech companies. The DIFC Innovation License, for example, provides a regulatory environment that allows fintech startups to test new products and services before seeking full regulatory approval. This approach is aimed at helping fintech entrepreneurs to bring their innovations to market faster, and with greater confidence."
But while Alblooshi is all praises for how the UAE and his own enterprise have created fintech-friendly legislations, he is also aware that there is always room for improvement. "While the UAE has made significant progress in creating an optimal regulatory framework for fintech startups, the regulatory environment for fintech in the GCC region is still evolving," Alblooshi remarks. "There is a growing recognition among regulators of the importance of creating more supportive and integrated frameworks that enable firms to operate smoothly across borders. With continued collaboration between regulators and fintech firms, as well as a commitment to balancing innovation with consumer protection, I believe the region has the potential to become a leading hub for fintech innovation and entrepreneurship."
Alblooshi notes that such regulatory improvements can also create opportunities for some of the untapped areas within fintech to find a footing in the UAE. "To help these untapped fintech sub-sectors grow, it's not a matter of what needs to be changed, but what needs more attention," he adds. "Policymakers could further enhance the supportive regulatory environment for fintech startups, providing more incentives for entrepreneurs to start new ventures. I also think collaboration and knowledge-sharing between fintech startups and established financial institutions can help drive innovation and growth in these untapped areas."
Of course, unlocking the hidden potential of such sub-sectors can only take place if existing challenges within the sector are first addressed. "One of the biggest challenges continued to be faced by fintech entrepreneurs is access to funding," Alblooshi says. "We are addressing this issue by providing a comprehensive ecosystem through the DIFC Innovation Hub and FinTech Hive that offers access to funding, regulatory support, and networking opportunities with investors, venture capitalists, and established financial institutions. But in addition to these initiatives, the Dubai Fintech Summit in May aims to bring together global fintech experts, industry leaders, and investors to discuss innovations, challenges, and opportunities in the sector. Our aim at DIFC is to provide a comprehensive ecosystem that offers access to capital, regulatory support, and networking opportunities, which help to mitigate the challenges faced by fintech entrepreneurs in the UAE and making Dubai the go-to hub for fintech startups."
Source: Dubai International Financial Centre (DIFC)
Alblooshi, however, is acutely aware that the conversations that take place at DFS 2023 are not the be all and end all. If anything, he hopes that the Summit can serve as a starting point to induce more impactful, sector-wide shifts that occur long after the two-day event comes to a close. "Firstly, I hope to see increased financial inclusion by encouraging the development of innovative financial products and services that cater to underserved populations, particularly in developing countries," Alblooshi says. "Improved security and privacy are also a priority so we can create greater consumer trust and confidence in digital financial services. An increase in fintech partnerships is also very important and DFS 2023 could encourage collaboration between fintech companies, traditional financial institutions, and other stakeholders, leading to the development of comprehensive solutions that address the needs of all stakeholders. Lastly, I hope to see enhanced regulatory frameworks that fosters innovation, competition, and collaboration between fintech companies and traditional financial institutions, leading to better services for consumers."
For such goals to come to fruition, Alblooshi and the DIFC team already have their own plans set in motion as well. "When it comes to DIFC specifically, there are several upcoming goals and exciting initiatives planned," Alblooshi reveals. "We have recently announced the launch of our venture building program, DIFC Launchpad. The initiative aims to develop a strong venture building model that promotes the growth of innovative startups and scaleups in the region. Another very exciting initiative is DIFC's role in its Path to COP28. DIFC and the Global Ethical Finance Initiative are bringing the global finance community together to promote thinking and action relating to climate and environmental, social and governance (ESG) principles in the build up to COP28. The fintech industry is certainly poised for continued growth next year!"
Mohammed Alblooshi, Head of DIFC Innovation Hub and FinTech Hive. Source: DIFC
UNTAPPED POTENTIAL: Mohammed Alblooshi, Head of DIFC Innovation Hub and FinTech Hive, discusses some of the consumer needs that remain unmet by fintech- and how they could be addressed.
1. Security and privacy "This needs to be urgently met. With the increasing digitalization of financial services, consumers are concerned about the security and privacy of their financial information. Fintech companies need to invest in robust security and privacy protocols to address these concerns, and earn the trust of their customers."
2. Access to financial education "Many consumers lack basic financial literacy, and struggle to understand complex financial products and services. Fintech companies can create user-friendly financial education tools and resources to educate consumers about personal finance. Dubai Fintech Summit 2023 will promote the sharing of ideas on how we can collectively educate consumers."
3. Integrating fintech with traditional services "Many consumers in the UAE still rely on traditional financial institutions for certain services. So, fintech companies should collaborate with traditional financial institutions to provide integrated solutions that combine the strengths of both sectors."