7th Sunrise Sector: Fintech Companies
The corporate world across the world has seen a decline in demand and disruption of supply chains due to the COVID-19 pandemic. Although industries including hospitality and aviation have been hit by the economic downturn, the emergence of sunrise sectors like e-commerce and Fintech is giving new hope to the economy in the UAE. Even before the pandemic has hit the world, the UAE has been making efforts to support the Fintech companies through financial free zones like ADGM and DIFC to attract the investors for business setup in UAE free zones
The new need for a contactless economy precipitated by the lockdown has accelerated the growth prospects of Fintech companies in the UAE. Banks and governments need robust Fintech solutions to cater to the financial needs of the people. Since the government is envisioning a digital-driven economy to address the COVID-19 challenge, Fintech companies would play a big role in transforming the environment of business setup in Dubai.
Why is Demand for Fintech Services Surging in UAE amid COVID-19?
The COVID-19 pandemic has created an unprecedented health crisis, which will be solved only through years of trial and error experiments. The WHO and the governments across the world have urged the people to learn how to live with the novel COVID-19 virus. Social distancing and avoiding personal contact are the only weapons available for human beings to fight this menace. In this situation, dealing with currencies has become a problem, which calls for the implementation of robust Fintech solutions. Financial advisory firm deVerem reports that globally, the download rate of Fintech apps increased 72% in the last week of March during the COVID-19 lockdown.
The UAE Central Bank has urged the people and the corporate world to switch to digital channels to meet their banking requirements. The banks and other financial institutions are also forced to upgrade to better Fintech solutions to cater to their customers. This new normal has created a favourable business setup ecosystem for the Fintech companies in Dubai. The government’s support for digital technologies is also a positive factor for Fintech entrepreneurs who are seeking company formation in Dubai.
Favourable Factors for Fintech firms for Business Setup in Dubai
1. The Move towards Contactless Economy
Since the world has to live with the COVID-19 for a long time, the frequency of which people physically visiting the banks will dramatically come down. Dubai is already witnessing a drop in physical branch visits due to the effect of lockdowns and social distancing practices. As this situation intensifies, more advanced technologies would be required to ease people’s access to digital services. Banks and other financial institutions would rely upon Fintech companies to deploy better digital platforms. Further, the demand will increase for faster and less expensive Fintech solutions.
2. Digital Currency
Many governments across the world have been pondering over switching over to the digital currency system to tackle the economic crisis.
Though, still in the discussion phase, the adoption of digital currency provides wider policy options for the Central Banks across the world. UK’s Bank of England stated in March 2020 that the digital currencies would enable the Central banks to implement negative interest rates thereby prompting the banks to lend more generously.
The central banks of the UAE and Saudi Arabia had developed a pilot program in 2019 to develop a shared digital currency for cross-border bank transactions. The program, if implemented, will use the blockchain database between the central banks of these two countries.
If the COVID-19 situation stays here for a prolonged time the switch over to digital currency may happen much earlier than expected, such a situation would bring more investments to the Fintech sector. More investors would prefer the environment of setting up a business in Dubai due to the emirate’s strategies for future technologies.
Why Choose Jitendra Business Consultants?
The COVID-19 pandemic has pushed the world into an unprecedented economic uncertainty and all the big powers have been struggling to contain the effect of the virus outbreak. However, the proactive UAE government has succeeded in responding positively to the challenges posed by the COVID-19 outbreak. The timely implementation of lockdowns, social distancing practices has helped the country to flatten the curve. The government has also initiated a slew of stimulus measures to assist businesses from feeling the heat of the economic uncertainty. As every crisis presents new opportunities, the COVID-19 outbreak has also caused the emergence of some sunrise sectors that have demonstrated resilience to the economic uncertainty. Along with e-commerce, Edtech, and other industries, the Fintech companies are seeing a surge in demand in Dubai. Dubai’s focus on future-ready technology and the current demand for a contactless economy is beneficial for setting up Fintech companies.
Jitendra Business Consultants (JBC) has responded positively to the challenges posed by the virus outbreak and has been helping the companies establish business in the emerging sectors in Dubai. JBC has a team of highly qualified business setup consultants who assist the companies in all the phases of company formation in Dubai, right from registration to incorporation. JBC is committed to providing robust business setup services to entrepreneurs in Dubai even in times of uncertainty. As a committed business setup consultant in Dubai, UAE JBC enables investors to achieve their business goals by helping them turn the crisis into an opportunity.