Fintech Ecosystems Middle East & Africa Weekend Read

Dubai’s Fintech Evolution: Regulation as a Catalyst for Change

Dubai’s fintech sector is enjoying rapid growth with investments soaring to $2.3billion and projected to grow to $949billion by 2030. The Dubai International Financial Centre (DIFC) is also bustling with 902 fintech companies – a 31 per cent increase from the previous year.

The surge is a testament to Dubai’s strategic push to position itself as a global hub for financial innovation, attracting a diverse array of entrepreneurs and venture capitalists to its ecosystem. This spirit of innovation was unmistakable during the recent second edition of the Dubai FinTech Summit, organised by the DIFC, which saw more than 8,000 attendees from 118 countries take part.

The Summit served as a platform for forging major international partnerships and expansions, with announcements such as Revolut’s regional growth plans and State Street Global Advisors’ reopening of its Dubai office, aligning with Dubai’s ambitious Economic Agenda D33. This agenda aims to propel the city into the ranks of the top global financial centres by 2033.

Throughout the city, regional business leaders and fintech founders repeatedly highlight one underlying perspective: a deep appreciation for Dubai’s regulatory environment. A refreshing sentiment that stands in stark contrast to the usual grumblings elsewhere that regulations hinder innovation.

Emerging startups often encounter challenges in fulfilling regulatory and compliance obligations related to managing their operational risks. In Dubai, stakeholders view regulations as a catalyst for growth and success, providing a sturdy foundation that drives the thriving developments in the fintech sector.

Advancing innovation

The Virtual Assets Regulatory Authority (VARA), an independent regulator in Dubai which recently introduced a licensing framework for virtual assets, says progressive evolution is central to Dubai’s ethos in driving all aspects of its diversified economic agenda. It provides tailored guidance and support for new entrants.

Deepa Raja Carbon,

“VARA was established as an independent authority to govern virtual assets, particularly to allow for the transformative potential of fintech to become securely scalable,” said Deepa Raja Carbon, MD and vice chairperson at VARA. “For the fintech sector, VARA’s ecosystem provides a natural testing ground to customise specialist B2B and B2C solutions in partnership with regulated participants across the value chain, as well as to curate and register their offerings in consultation with VARA.

“Ultimately, Dubai’s virtual asset regulations are designed as a living framework. We expect to nurture an optimal environment for businesses to engage, observe, and evolve together, enabling us to collectively deliver a truly participatory and borderless global economy.

“By engaging in continuous dialogue with the fintech community, we aim to refine our regulations with material advancements, ensuring they remain effective and conducive to growth without compromising regulatory standards or consumer protection. Our role as a regulator is to support the industry in what it does best, without compromising our obligation to protect the public.”

Responsive regulation
 Ken Coghill, director - head of innovation and technology risk supervision at DFSA
Ken Coghill, DFSA

The Dubai Financial Services Authority (DFSA), the independent regulator of financial services conducted in or from the DIFC financial free zone, suggests its adaptive and collaborative approach to fintech regulation is key to success and also facilitates broader international reach for companies based in Dubai.

In 2023, the DFSA recorded a 50 per cent year-on-year increase in licence applications across all business models with increases in licencing applications from private banks, asset managers and fund management companies.

“A lot of our regulation is generally driven by what the industry tells us first,” explains Ken Coghill, director – head of innovation and technology risk supervision at DFSA. “The industry tells us what it wants and what it needs and from that we take a look at the regulations we have and see if we need to make any change.

“Then we continually engage to see if the regulation we put in place actually works, if it is practical and if it is useful. We get that feedback from industry, from businesses, from different jurisdictions and having more diversity in the businesses that come here only helps enrich the regulation.

“Dubai has been very smart generally building infrastructure like this. Fintechs come here not to just operate within the DIFC, they come here to operate internationally. We are an early mover in regulation, but we don’t necessarily need to be the first. But once we get involved in something, we go all the way with it.

“We weren’t the first to come up with regulations in digital assets, for example, but there’s a strong argument that we have now probably the most comprehensive regulations on assets and our approach does get attention from other regulators.”

Jacques Visser, chief legal officer at the DIFC,
Jacques Visser, chief legal officer at the DIFC

Expounding on this, Jacques Visser, chief legal officer at the DIFC, points out the rigorous standards upheld by the DIFC’s regulatory framework and insisted it does not take a “light-touch approach”.

He said: “The regulator is recognised globally as a first rate regulator and regulates on a basis that people know and understand with certainty and you can bank on everything being done consistently.”

Free zones
Ammar Al Malik
Ammar Al Malik, Dubai Internet City

Ammar Al Malik, MD at Dubai Internet City managed by TECOM Group, highlights another dimension of Dubai’s dynamic business environment, such as the unique advantages of operating within Dubai’s free zones.

As a technology-focused free zone, Dubai Internet City equips information and communication technology companies with infrastructure and support, such as technology hubs, incubation centres and co-working spaces, and currently boasts over 3,500 customers.

TECOM Group, the largest operator of business parks and free zones in Dubai, accounts for over 11,000 customers as a whole.

“All the companies that are based in Dubai’s free zones have 100 per cent ownership, 100 per cent repatriation of capital and profits, as well as the regulatory frameworks that we offer,” said Al Malik.

“There is no red tape. Companies don’t need to go across the city and visit multiple government departments – everything is managed within the ecosystems. The whole idea of the free zone frameworks is about making life easy for businesses, whether it’s for financing, or visas, or licensing. Whether, you’re a fintech, or in any other tech industry, you just need to speak to one of our specialists, and we handle the rest.”

“I have seen businesses come into Dubai with two people and have jumped to 400 employees in just a couple of years. Companies have set up in Dubai and expanded from this base to access markets across the Middle East, but also into Africa and Eastern Europe as well. Operating here provides access to significant and untapped opportunities for growth.”

Fintech funding
Sonia Gokhale (top) and Tammer Qaddumi, VentureSouq

Robust regulations and dynamic free zones are not just theoretical advantages in Dubai; they are actively shaping success stories in the fintech landscape, according to venture capital firm VentureSouq, which launched the region’s first sector-specific fund focused on fintech in 2021.

Its co-founders, Sonia Gokhale and Tammer Qaddumi, say the region’s approach has propelled the growth of innovative fintech startups across the Middle East, North Africa and Pakistan.

“The number of founders and the quality of founders in this region has grown exponentially,” said Gokhale. “You have great talent that’s willing to quit amazing jobs to come and build companies here, building companies that are for the rest of the world.”

Qaddumi highlights another significant aspect – financial inflows and regulatory reforms that bolster the fintech ecosystem. Historically reliant on natural resources, the region has seen a strategic shift, with sovereign wealth funds now investing in regional funds and enterprises.

On the regulatory front, changes such as the arrival of the Golden Visa have proved transformative. “The introduction of the Golden Visa has been very massive,” Gokhale states, pointing out its significance for founders who can now plan long-term due to the visa’s 10-year validity.

The co-founders also draw comparisons with regulatory approaches in other countries, noting a distinctive, collaborative model in Dubai. “Here, changes are made by direct outreach to the regulator… It’s a relationship and regulators are working to understand what they’re doing, allowing them to operate in a controlled manner.”

Stake’s success

Launched in January 2020 by co-founders Rami Tabbara,  Ricardo Brizido and Manar Mahmassani, Stake, a digital real estate investment platform, says it has leveraged Dubai’s “unbelievable” regulatory environment to streamline the real estate investment process.

Stake's founders, from left, Ricardo Brizido, Manar Mahmassani and Rami Tabbara
Ricardo Brizido, Manar Mahmassani and Rami Tabbara

Through the introduction of fractional ownership of properties, Stake’s model allows investments from as low as $500 in just three minutes and boasts 530,000 registered users (205 nationalities from 160 countries), who have completed $91million in property transactions. The company has also paid out more than $3.5million in rental income and plans to launch in Saudi Arabia in June.

Tabbara describes the DFSA in Dubai as “big thinkers” who have made Dubai “the easiest place in the world” to buy property through its “super digital transparency of data”.

“They’ve digitised everything from the whole process of buying a property,” he said. “They’ve allowed us to onboard anyone from around the world.”

While Mahmassani praises Dubai’s regulatory framework for facilitating the establishment of a crowdfunding licence for fractional property investments, creating an advantageous testing ground to build scalable businesses.

“The regulators have definitely made it easy in terms of creating a framework for property investing in a fractional way. Investors know that they’re getting deals that have been fully vetted.”

Careem’s climb
Careem Pay
Mo El Saadi (top) and Dr. Srijith Nair, Careem Pay

Careem Pay, the fintech arm of the Dubai’s multi-service app Careem, launched under the authorisation of the UAE Central Bank and in collaboration with First Abu Dhabi Bank and has rapidly evolved since its inception.

Introduced in 2022, the platform now boasts over 300,000 users who have linked their bills, facilitating over $50million in transactions. The service has also recorded robust user retention rates and substantial month-over-month growth in remittances.

Mo El Saadi, VP of Careem Pay, highlights the transformative role of regulatory frameworks in the UAE for nurturing fintech innovations.

El Saadi noted: “If you look at the regulatory bodies, particularly in the UAE and Saudi, they have been quite progressive. Over the past few years, they’ve really enabled the ecosystem to thrive. People from the US, Europe, Asia are able to come in and set up shop here, which wouldn’t be possible without a progressive regulator. Across the board, especially in financial services, we’re seeing interesting regulations coming from the central bank.”

Dr. Srijith Nair, chief information security officer at Careem Pay, also added: “The progressive partnership mentality here helps the ecosystem thrive; it’s not about imposing regulations but rather collaborating to solve them. There’s sandboxes and regulatory frameworks for testing, ensuring everyone is comfortable.”

Huspy’s growth
Ziad Nassar, chief of staff at Huspy
Ziad Nassar, chief of staff at Huspy

Dubai-based proptech Huspy has emerged as a frontrunner in the UAE real estate market since its launch in 2020. With ambitions to become a superapp for real estate agents, mortgage brokers and consumers, the fast-growing company has acquired three mortgage businesses, bagged US$37million in a Series A funding round and expanded into Spain.

With plans to launch in Saudi Arabia and ‘another European country’ in the next 12 to 18 months, Huspy credits Dubai’s robust regulatory framework and transparency for helping it “become one of the fastest-growing startups globally”.

Ziad Nassar, chief of staff at Huspy, said: “The real estate market in Dubai and the UAE is significantly more regulated with much higher data availability and transparency than say in Spain, which is a testimony to the efforts that the UAE government, in particular the Dubai Land Department and the Real Estate Regulatory Authority (RERA) have been putting in over the last few years towards evolving the real estate industry, such as controlling the way real estate is being developed, sold and bought in the country.”

“The Dubai Land Department provides daily updates on all real estate transactions and this level of transparency is unmatched, even by the US, and enables agents, brokers, home buyers and sellers in Dubai to make well-informed decisions, significantly improving the home buying and selling experience.”

Nassar also revealed Huspy’s participation in the newly established Dubai ‘proptech board,’ dedicated to uniting property technology companies with the government to enhance technology, transparency, and clarity in the regional real estate industry.

Ripple’s regulatory welcome
Reece Merrick
Reece Merrick, MD MEA, Ripple

Ripple, a US provider of enterprise blockchain and crypto solutions which opened an office in the DIFC in 2020, has praised regulators in the region for “rising to the challenge of establishing a framework that allows the local crypto industry to thrive”.

At the end of last year, the DFSA approved the digital asset XRP for use within the DIFC, which means licensed virtual asset firms within the DIFC can incorporate XRP into their virtual asset services.

Reece Merrick, managing director for the Middle East and Africa at Ripple, says: “We’ve seen some tremendous growth regionally and continue to grow here. One thing that the UAE has done very well from a fintech, blockchain and digital assets perspective is provide clear regulation, allowing enterprise businesses to enter the space and know the realms of how they can serve customers here.

“Regulators in the region provide a regulatory framework that allows digital assets, companies or enterprises who are looking to serve and provide services with clear guardrails.”

Who’s next for the region?

At the Dubai FinTech Summit, Nik Storonsky, founder and CEO of Revolut, announced expansion plans in the region, while Bitpanda, the European investing-as-a-service provider, revealed plans to open a new office in Dubai citing the UAE’s “perfect mix of investor demand and innovative regulatory environment”.

Pranav Sood, executive general manager, EMEA at Airwallex
Pranav Sood, executive general manager, EMEA at Airwallex

Airwallex, the Australian-founded, Singapore-based global payments and financial platform, has also recently unveiled its expansion in the United Arab Emirates and Kingdom of Saudi Arabia, describing the region as a “hotbed for innovation”.

Pranav Sood, executive general manager, EMEA at Airwallex, commented: “Fast growing regions like the Middle East continue to reshape the global economy, building upon changes and new opportunities in areas such as e-commerce, supply chains and distributed employment.

“We recently made our first local hire in Abu Dhabi in the UAE to spearhead initial engagement. We are now also taking steps to apply for all the requisite licences to enable us to extend our global infrastructure network to the Middle East. We’re excited to partner with regulators across the Middle East as part of our future growth plans.”


  • Claire is an experienced editor and writer with 25 years of experience in the publishing industry. As a tech journalist, Claire has covered every subject possible over the years, from the launch of broadband and next generation mobile networks to the arrival of the metaverse and Web3.

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