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Fintech, Financial Services and Wider Digitalisation Opportunities Between Israel, UAE and Bahrain

Last month saw the historical signing of the Abraham Accords between Israel and the United Arab Emirates (UAE) and the Kingdom of Bahrain; it was at the White House with President Donald Trump, Israeli Prime Minister Benjamin Netanyahu alongside the UAE and Bahrain’s foreign ministers. What will be the impact and opportunities, particularly in the financial services, fintech and wider digitalisation and tech space?


With annual trade between Israel and the UAE alone to be estimated at $4 billion per annum within three to four years, there are opportunities that Israel and the two Gulf Cooperation Council (GCC) countries of the UAE and Bahrain have.

Examples include tourism and transportation, where Israel and the UAE and Bahrain will have wider collaborative efforts. It is expected that the major carriers of Emirates, Etihad, Gulf Air and El Al will have direct flights from at least Tel Aviv to Dubai, Abu Dhabi and Manama. Other examples include Khurram Shroff, Chairman of the IBC Group headquartered in the UAE, announcing an initiative seeking to boost cross-border tourism between the UAE and Israel. Coming in the wake of the momentous peace agreement between the two nations, the project will be a partnership between the group’s subsidiary Gallery Suites Vacation Rentals LLC, and Smiling House, of Switzerland.

Dubai is one of the world’s most visited cities in the world and that in the future is expected to include Israeli tourists for business, leisure and bleisure (the term used to describe the mix between business and leisure travel).

How does this impact in the financial services and fintech industry?


Tel Aviv is the commercial and financial hub of Israel
Tel Aviv is the commercial and financial hub of Israel IMAGE SOURCE GETTY

Tel Aviv is Israeli’s main commercial and financial hub while Dubai is for the UAE (with Abu Dhabi being the capital and growing financial hub) and Manama for Bahrain. It will most likely see clear partnerships and investment flows across the three nations and their commercial cities.

Israel is home to some of the largest banks in the Middle East and Africa (MEA) region such as Bank Hapoalim, Bank Leumi, Mizrahi-Tefahot and Israel Discount Bank. The UAE is also home to some of the regions largest banks like First Abu Dhabi Bank (FAB), Emirates NBD and Abu Dhabi Commercial Bank (ADCB). Bahrain is home to banks such as National Bank of Bahrain (NBB), Al-Salam Bank and Bank ABC.

As reported in the Associated Press, Dov Kotler, the head of Bank Hapoalim, recently led an Israeli business delegation to the UAE. Kotler told AP that he expected financial deals to be signed and sees huge potential in the financial services industry. There have been examples of collaboration already such as an MOU signed between Emirates NBD and Bank Hapoalim; Emirates NBD also signed an MOU with Bank Leumi. From a wider investment point of view, Abu Dhabi Investment Office, which is responsible for attracting foreign direct investment (FDI) into the capital of the UAE, is planning to set up a first of a series of representative offices in Israel.


Abu Dhabi is the capital of the United Arab Emirates (UAE)
Abu Dhabi is the capital of the United Arab Emirates IMAGE SOURCE GETTY

As the UAE and Bahrain both open their doors to Israel and vice-versa, it is expected to see a growth in tech, especially as all three countries have strong tech sectors.

First, Israel, with its commercial hub of Tel Aviv, is often regarded as a Startup Nation (where it is estimated to have over 6,000 startups), home to a thriving tech community and the birthplace of many innovations in tech such as Moovit and Waze (the ladder which got acquired by Google for $1.1 billion in 2013).

Second, the UAE (home to around 2,300 startups), has world-class cities of Dubai and Abu Dhabi, which are clusters of tech and innovation. Dubai’s Dubai International Financial Centre (DIFC), for instance, is a leading global financial centre in the Middle East, Africa and South Asia (MEASA) region. Abu Dhabi’s Abu Dhabi Global Market (ADGM) is also becoming a leading player and is celebrating its five-year anniversary. The UAE, as well as Israel, are home to the region’s only billion dollar plus unicorns (Israel hosting seven and Dubai home to one, which is the Emerging Markets Property Group (EMPG), funded by OLX Group, KCK Group and Exor Seeds).

Third, Bahrain is home to a strong financial services industry and was the first in the region to not only boost economic diversification but innovation within the financial services and fintech space. The Kingdom has over 350 licenced financial institutions.

Manama is the capital and largest city of the Kingdom of Bahrain
Manama is the capital and largest city of the Kingdom of Bahrain IMAGE SOURCE GETTY

There have been some noticeable activities in the fintech and wider tech space already.

First, UAE-based Mohammed Al Beloushi, CEO of Barker and Booth Commercial Agency LLC, recently announced a strategic investment in Israeli startup Fintica AI Ltd. This will see the launch of a partnership with the intention of developing Fintica’s capabilities, resources, and market share in the region bringing with it, new technology for the financial sector.

Second, Israel’s innovative technology company SURE Universal Ltd partners with UAE Firm HBK Department of Projects (DOP) to launch HBKiCare. The partnership is the first product launch cooperation in the UAE between an Israeli technology company and an Emirati company. Departments of Project Sheikh Hamad bin Khalifa bin Mohammed Al Nahyan (Department of Projects), HBK DOP, was founded by His Highness Sheikh Hamad bin Khalifa bin Mohammed Al Nahyan a member of the ruling family and Chairman to handle project investments and enter into JV partnership with partners presenting viable and interesting projects with sustainability and job creation.

Third, Dubai-based Private Equity Ken Investments, Variant Investments, Techstars Ventures and Michael Ullmann’s investment group Invests $5.8 million in US-Based Salaryo. Salaryo has its origins in Israel. Yair Levy, the CEO of Salaryo, addressed the fact that for the first time, an Emirati fund participated in the funding round. Levy stated, “The announcement by the leaders of the United Arab Emirates and Israel about a peace treaty being negotiated between the two countries, has helped to remove technical barriers that have so far delayed the completion of the investment transaction. This pioneer investment pairs Israeli technological innovation with the UAE’s financial expertise and international outreach. The combination of both has endless potential. I look forward to more transactions like this in the near future.”

Fourth, in the wider fintech and tech ecosystem, UAE-based White Water Public Relations and ReBlonde, an Israeli technology PR agency, also announced a partnership, another first-of-a-kind deal between an Israeli company and a UAE company within the marketing and PR domain.

Fifth, it was recently reported that Abdullah Saeed Al Naboodah and his business unit Phoenix Capital is partnering with OurCrowd venture capital from Israel to form a $100 million fund to back technology investments between the UAE and Israel. Again, as with the previous examples, this venture is a first-of-kind.

On a final note, before the historical deal was signed, Israel confirmed its attendance end of last year at Dubai Expo 2020 (due to the pandemic Expo 2020 has been reschedule for October 2021).

Much remains to be seen on the developments that have happened this year. Nevertheless, opportunities are there such as in the financial services, fintech and wider tech space.

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