The Fintech ecosystem in Bahrain has matured “on many fronts,” according to a new report.
As noted in the update, new developments from government, corporate, and investment stakeholders have “created a more conducive environment for local and international startups to grow and scale from the Kingdom.”
The number of Fintechs established in Bahrain “is now in the hundreds, including larger fintechs valued at over $1bn.”
The previous edition of the Bahrain FinTech Ecosystem report “represented a snapshot of the local fintech environment in 2018, at the time of Bahrain FinTech Bay‘s launch, and now serves as a benchmark for comparison.”
Although growth in the sector is clear, “embracing innovation and emerging technologies has proved vitally important to society, business, and economic growth.” The second edition of the Bahrain FinTech Ecosystem Report now “reviews key emerging Fintech trends within Bahrain’s local ecosystem.”
It identifies growth drivers necessary “to capitalize on the ecosystem’s maturity and catalyze the expansion of the industry.”
As stated in the report:
“Bahrain Fintech Bay plays a strategic role in realizing this national ambition and strategy to drive forward corporate innovation and investment, as well as support local and international startups and scaleups by facilitating unique partnerships and business models.”
The report added:
“Looking ahead, innovation and technology have the potential to disrupt, transform, and create opportunities beyond financial services. The growth of the fintech sector in the Kingdom is a testament to the opportunities these new industries can create.”
Although these entities are working on building the drive for fintech startups, there also needs to be “a more comprehensive and competitive funding ecosystem to enable fintech not only in their base operations in Bahrain but to scale to other regions as well.”
Globally, it was found that “funding activity increased in countries where regulatory sandboxes were established.”
The Central Bank of Bahrain could “connect sandbox participants with the investor network and facilitate introductions in order to spur the funding ecosystem.” Moreover, developing a Fintech registry as mentioned previously could “provide the investors with legitimate and viable investment options; Fintechs that are verified and approved by the government/CBB.”
The report further revealed:
“Bahrain is gradually developing in the fintech space. This is mainly driven by a supportive regulatory framework and the financial services’ sector’s drive for innovation.”
Leveraging the support of academia to introduce fintech-focused curriculum, as well as encouraging funding by facilitating deeper connections “will have the most impact in speeding up local Fintech adoption.”
The report continued:
“Moving forward, Bahrain can expect the following trends coming up: Greater number of big international players are looking to invest in local startups that localize the concept of a successful global fintech solution.”
The Fintech sector will “drive a large number of investment exits in the next two years.”
As mentioned in the update:
“By encouraging greater market collaboration between all stakeholders involved and exchanging knowledge, business opportunities, and experiences, Bahrain can become the ideal testbed for new fintech companies looking to establish or startup in Bahrain.”
The report also noted that there is a “shift in traditional job roles towards fintech and innovation at a broader scale.” There will be “a focus on roles in growing and established scaling startups, particularly within regulatory compliance.”
Moreover, corporates launching new digital/fintech platforms or subsidiary companies in the area of fintech “will be looking for fintech specific talent.”
Real estate also “presents a big opportunity for investment and fintech adoption in the future,” the update revealed.
You can view the full report here.