By 2024, the DIFC plans to be the permanent home to 1,000 active financial firms and have 50,000 working professionals. Already, they are the leading financial hub in the Middle East, Africa and South Asia (MEASA), a region poised to shape the financial future.
The DIFC together with Dubai has grown to be the leading financial centre in the MEASA region. “DIFC and Dubai are the gateways to the vast MEASA region. A region whose three billion people and $7.4 trillion GDP offer vast opportunities,” says Eisa Kazim, Governor of DIFC.
These opportunities lie in the region’s increasing mobile connectivity, growing prestige as a trade and investment hub and predominantly unbanked populations, consisting mainly of women and young adults. MEASA will be the cause of the demand and the supply for greater and superior financial services. And according to the Economist Intelligence Unit, this is a multi-billion-dollar opportunity to bank on.
“As the world reaps the benefits of the digital age, the financial sector in emerging and developing economies are well positioned to succeed by embracing a combination of technology, innovation, and smart policymaking. As the leading financial centre in the region, DIFC is catalyzing this shift by serving as an established platform for firms to tap into transformational opportunities throughout MEASA,” said Arif Amiri, Chief Executive Officer of DIFC Authority.
The future of finance:
The basics of the financial system are starting to change all over the world. And the root of this change is the next generation consumer that prefers digitally delivered services. The only way businesses can survive this shift, is by keeping up with the digital times. Many financial companies have adapted their offerings already across the financial services spectrum. These technological advances have done more for the transformation and inclusion of the financial sector in the last ten years compared to any other decade prior to it.
Another key technological component set to change the future of finance is the omnipresence of mobile phones that are transforming the financial system, such as payment methods. In a nutshell, mobile phones make getting and keeping customers cheaper. This enables financial inclusion and increases the supply of financial services to all levels of society.
Financial companies in various stages have started to invest in platforms that meet the demands of the next-generation consumer.
Enabling finance through regulation and best practices:
Governments, central banks, and financial regulators shape the evolution of financial services. They do this by balancing innovation with stability while protecting the consumers. Enabling finance through regulation and best practices can foster financial innovation in the future.
The financial sector’s regulations are built around the walls of the past. A good example of this is the Know Your Customer rule. This rule requires financial institutions to meet the clients face-to-face to verify important details using physical documents. This process ensures that money moves through the system legally, but the cost of this compliance requirement is high.
Finding a balance between financial crime prevention and financial innovation is not an easy task. However, the MEASA region has shown some interesting examples of solving this difficulty.
Some of the best practices enabling financial innovation are, smarter data that helps to improve credit scoring, the involvement of governments to promote the shift to digital, the collaboration of financial services, financial education, the development of educational hubs and the implementation of Islamic finance.
The future of finance in MEASA does not rest on technology alone. Improving educational facilities to attract the next generation of entrepreneurs and developing diversified financiers from the region plays an equally important role, in strengthening the sector’s long-term business growth and improving lives.