Saudi Arabia’s capital has made the most improvements to its attractiveness as a fintech start-up hub, according to a new report.
Riyadh jumped 106 spots, claiming the 126th spot on the list of most attractive cities. But in the Middle East, the city ranks third, behind Tel Aviv Area in the top spot, followed by Dubai. Abu Dhabi claimed fourth place in the region in the Global FinTech Rankings Report 2021 from Findexable and Mambu.
For Riyadh’s rise in the rankings, the report said: “The size of the economic prize on offer in the country allows fintechs to scale fast and attract capital.”
“That is what led Western Union to plough $200 million into stc pay in November, only two years after the payments company was founded. The pandemic has seen demand for its QR code and remote payments services increase in a country with huge consumption,” the report added. “Another attraction is the company’s shariah compliant solutions, which could potentially be popular across the Muslim world.”.
Islamic banking has grown over the last decade in the region, and players in the religious financing space have looked for new ways to manage the challenges Covid-19 has presented, adapting higher levels of digital solutions and increasing reliance on fintech.
Islamic fintech is on the rise globally, especially in Saudi Arabia and the UAE, with the total volume of transactions within OIC countries at $49 billion. While that constitutes only 0.7 percent of global fintech transactions, Islamic fintechs are projected to grow to $128bn by 2025 at a 21 percent compound annual growth rate, according to the Global Islamic Fintech Report (GIFR) 2021.
Overall, Saudi Arabia ranks 65th on the list. The UAE ranks number 28, ahead of Belgium and directly behind Austria.
For fintech, the presence of a regulatory sandbox is integral to test and develop new ideas, which the UAE and Saudi Arabia have both introduced.
Dubai climbed three spots overall from last year, while Abu Dhabi made its first appearance on the list this year.
For the top 20 cities globally, only Tel Aviv from the Middle East made the list at number five, with the others scattered across North America, Europe and the Asia Pacific region.
“The other clear message emerging from the top 10 risers is the diffusion of innovation beyond primary tech hubs in the US and Europe,” the report said.
The UAE and Saudi Arabia have introduced a slew of new initiatives over the past few years designed to make starting a business easier. For fintech, the presence of a regulatory sandbox is integral to test and develop new ideas, which the UAE and Saudi Arabia have both introduced.
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