Wednesday 26 / June / 2024
The GCC has been experiencing rapid growth in its digital economy, spurred by a combination of government initiatives, regulatory support, and the increasing adoption of digital payments. Fintech also is helping this transformation with their innovative technologies that are extending the benefits of digital commerce to consumers and businesses. Through fintech, consumers are enjoying seamless and personalised payment financial experience, businesses can access a broader range of financial services, and the economy can benefit from increased financial inclusion and innovation.
Governments have been in the driver’s seat of this transformation. In Oman, the Central Bank of Oman has taken a proactive approach by introducing a regulatory sandbox, which allows fintech firms to test their new technology-based innovative solutions in a controlled environment. The Oman Startup Hub (OSH) is a platform for startups, investors, advisors, and entrepreneurs to connect and learn about the innovation ecosystem in the Sultanate. And the Oman Technology Fund “OTF” aims to put Oman firmly on the map of knowledge leaders in the Middle East.
Oman’s efforts have helped set the stage for fintechs like Thawani, which provides mobile payment solutions to merchants and consumers, to reshape Oman and the region’s fintech landscape.
Emerging technologies such as AI and Blockchain, part of the Web3 revolution, present an opportunity – AI alone, for instance, has the potential to deliver as much as $150 billion in real value in the GCC. The Oman government is working on creating a legal and regulatory framework that fosters AI innovation while ensuring ethical use of AI, and the Information Technology Authority of Oman has been working on a national strategy for AI, which outlines the country’s vision and roadmap for AI implementation across various sectors.
However, fintechs continue to face challenges that can potentially undermine their growth and limit the value they’re able to bring to individuals and economies. Our recent research identified emerging trends for the wider ecosystem to address to maximize the potential fintechs have to offer consumers, businesses, and the wider economy.
One significant hurdle is the global competition for tech talent. The high demand for skilled professionals
coupled with the relatively high cost of living makes talent acquisition costly, potentially hindering the growth of fintechs. In Oman, the government is investing in tech education to ensure a steady supply of tech talent, and the OSH to nurture tech startups and attract international tech talent. These hubs provide a conducive environment for innovation and entrepreneurship.
Access to underlying payment systems previously exclusive to banks and exchange houses is another trend shaping the fintech landscape. This access opens up multiple revenue streams for fintechs, including fees, float, foreign exchange, and data. Consequently, payments have become a major focus area for many fintechs, with large digital wallets emerging from telecom. The market is seeing diverse offerings – from BNPL solutions, personal finance, and virtual assets – which has ushered in an era of financial innovation.
The cross-border nature of many fintech operations also presents unique challenges. With business interests often spanning multiple MENA geographies, fintechs must navigate a complex web of country-specific licensing and regulations – an opportunity for the region’s regulatory players to address with ecosystem stakeholders.
Finally, there’s an increasing trend of fintechs seeking industry players for more mentorship, infrastructure support, and investment. This highlights the importance of the private sector contributing more to the government’s efforts to foster a supportive ecosystem for fintechs to thrive. Visa, for instance, has been supporting fintechs in Oman with several programmes, latest of which is the Saudi Arabia, Oman and Bahrain edition of the 2024 Visa Everywhere Initiative (VEI), for fintech startups to showcase their solutions on a global stage for a chance to secure funding to help them with development and operational costs.
Fintechs in Oman have the potential to offer even more broad social benefits– particularly when it comes to providing financial services to those who have traditionally been underserved and helping businesses in their digital transformation. That’s why it is so important to support fintechs in their growth journey. We have a promising future ahead for everyone, everywhere but we will only be able to reach it through close collaboration and cooperation.
The writer is Visa Country Manager for Oman
