Dubai And Abu Dhabi: Fintech Capitals Of The Future Show Us How It’s Done

Sergio Barbosa, CEO, FutureBank


Co-founder and CIO of enterprise software development house, Global Kinetic, Sergio directly heads its open banking platform, FutureBank. A skilled software engineer, innovative product developer, and keen business strategist, he has participated in several notable fintech milestones, including building the southern hemisphere’s first digital-only bank all the way back in 2002.

I’ve wanted to blog about Dubai for a while now, and not only because the Cape winter has me thinking of those +40°C temperatures almost longingly. I was recently in the United Arab Emirates (UAE) for Seamless Middle East 2022.

We have experience in the region. We’ve been working with a Saudi Arabian bank for a while and are actively exploring opportunities with several other financial institutions, as well as potential fintech partners in the wider GCC. Banks there are highly competitive, deeply engaged with the latest technology, and faced with several of the same challenges that their peers struggle with in other regions. Our conversations with them are always animated, with legacy core systems a frequent topic.

Global Kinetic’s banking platform, FutureBank, has resonated faster there than in some of our other markets, where the promise of open banking was perhaps not grasped so fast. As CEO of FutureBank, I’m bullish about doing business in Dubai and its environs.

Different boom, same town

But, really, who wouldn’t be? The UAE’s economy continues to mature at pace, with tech innovation and business increasingly superseding tourism and real estate, much less oil, as the country's primary focus for future development. Sheik Hamdan bin Mohammed, the Crown Prince of Dubai, recently referred to the emirate as “the city of entrepreneurs”, giving some insight into the sources of wealth he and others envisage will be drivers of future success. (The UAE’s nearest fintech rival, Israel, is often called “the start-up nation”.)

The UAE’s fintech takeoff wasn’t an organic phenomenon. The sovereign wealth funds of Dubai and its brother emirate Abu Dhabi have each invested hundreds of millions of dollars in fintech over the last few years, vying – at least, according to some people I’ve spoken to – to expand their already dominant positions in the Middle East, Africa, and South Asia and, perhaps, eventually take the Asian crown from Singapore.

Both emirates established hugely successful finance-focused special economic zones back in 2017, the Dubai International Finance Centre (DIFC) and the Abu Dhabi Global Market (ADGM), which are in part tasked with accelerating growth of the regional fintech sector. A couple of months ago, Dubai launched a +R1729.81-million fund – the Venture Capital Fund for Start-ups – to support new projects and “promote the economic growth of the emirate and consolidate its position as a global center for [fintech] and innovation in investment capital”.

Abu Dhabi recently set up a similar fund in partnership with Jordan and its global investment-focused tech ecosystem, Hub71, has welcomed over a hundred startups from 25 countries, active in 18 industries including fintech, so far. Its sovereign wealth fund, the Abu Dhabi Investment Authority, announced on 1 June that it had made an investment in the fintech Acrisure, boosting its value to a whopping R397.86 billion.

Catalysts for growth and healthy competition

Most important elements in generating a competitive fintech environment

Twice a year, Long Finance and Financial Centre Futures survey stakeholders on the most important ingredients for fintech hub success. Access to finance, ICT infrastructure, and an ecosystem of innovation came up tops in their most recent report.

Source: The Global Financial Centres Index 31; March 2022

Venture capital is pouring in following the heavy government investment in the ecosystem, but funding is only part of the reason why Dubai and Abu Dhabi are doing so well in fintech. The UAE’s free economic zones provide the benefit of business-friendly regulatory regimes, as well as highly attractive tax and foreign exchange rules. Does zero tax on business income or profits sound good to you? What about full foreign ownership and free repatriation of all capital and profits? You might also enjoy the complete waiver on personal income tax and low capital gains taxes.

There’s also excellent digital infrastructure and a strong focus on emerging technologies (Dubai wants to be the first “blockchain-powered city”); awesome tech community collaboration and innovation programs (the DIFC Innovation Hub has nearly 600 innovation and tech companies, ranging from start-ups to unicorns); valuable support from traditional financial institutions like the Abu Dhabi Islamic Bank and Mashreq; large pools of international talent, owing to the quality of life, which beats many of the emirates’ rivals. The Dubai Chamber of Digital Economy, founded a year ago, proposes policies aimed at nurturing the digital economy and helps to plan and direct efforts to attract businesses, investment, and talent.

Going somewhere very, very fast

The Central Bank of the UAE also has a FinTech Office, established in 2020. Its “strategic ambition journey” gives December 2023 as the point by which it hopes Dubai is a top-five global fintech hub. That doesn’t seem to me like ambition out of touch with reality. Not when you’ve lined things up the way Dubai and Abu Dhabi have. You can feel the excitement in Dubai when it comes to fintech, and there is no doubt a similar vibe in Abu Dhabi.

If you’re considering the next phase of your own strategic ambition journey, choosing between these two cities for regional headquarters could be hard. But perhaps not as hard as you’d think. They’re just 140 km removed, less than an hour-and-a-half’s drive apart – a taxi ride will cost you about 280 dirhams (roughly R1314.66 or 1200 rand). And soon, they could be linked by hyperloop, which would cut travel time to just 12 minutes, sucking you through an overland tube at around 1,000 km/h. It’s the perfect mode of transport for cities with more gold taps than stop signs (totally made that up), sharing a mindset so determinedly focused on the future that you’d be stupid not to go along for the ride.

Reaching new customers through fintech partnerships

Sergio Barbosa, CEO, FutureBank


Co-founder and CIO of enterprise software development house, Global Kinetic, Sergio directly heads its open banking platform, FutureBank. A skilled software engineer, innovative product developer, and keen business strategist, he has participated in several notable fintech milestones, including building the southern hemisphere’s first digital-only bank all the way back in 2002.

Back in October, I made an argument for open banking’s relevance to regional American banks and credit unions. I listed several ways that open banking platforms could benefit institutions like these – specifically those with under a billion dollars in assets.

My focus in this post is on the enormous potential banking-as-a-service (BaaS) and banking-as-a-platform (BaaP) have for helping traditional banks reach new customers, including those that were uneconomical, unreachable, or unheard of in a physically restrictive and data deficient banking paradigm.

Platforms that leverage APIs and facilitate integration can enable banks to benefit from fintechs’ data-driven and customer-centric approach to innovation by offering them the embedded finance foundation that fintechs need in return for greater customer acquisition on the bank side.

They can also enable banks to develop highly engaging new offerings faster, more efficiently, and with far less risk than before. Both fintechs and banks could leverage a combined customer data set in various ways – with their approval, of course.

Let’s look at three broad opportunities banks and credit unions have to gain new customers or members through open banking partnerships.

Meeting the needs of niche markets

What bank is the best fit for serial house restorers? And for TikTok entrepreneurs? Convenience store franchisees? Everything counts in large amounts, as the song goes, and the economies of scale that digital technologies can provide could bring millions of potential customers within reach of the smallest bank. Sifting through them, you’re bound to find a market, even a very niche, geographically distributed one.

Going “niche”, as they say, means targeting market segments and communities united by emotional or cultural bonds, personal concerns, and unmet financial needs that have little to do with geography. 

US banks and credit unions have long focused on the needs of narrowly-defined communities, but their geographical footprint has almost always been limited by cost considerations related to their physical branch and ATM networks, if not by their charters too.

No more. Digital channels have freed them – and their competitors – to market to prospects and serve customers far beyond their home county, state, or region without much additional outlay. To get a good return on investment, however, they have to hone their value proposition carefully – and that may require further specialization.

Going “niche”, as they say, means targeting market segments and communities united by emotional or cultural bonds, personal concerns, and unmet financial needs that have little to do with geography. These groups may always have been there – ethnic, racial, or sexual minorities, for example – or could be entirely new – think of crypto-asset traders and gig economy workers.

It’s an approach that many smaller financial institutions see as a way to differentiate themselves from competitors large and small, gain customers, and profit from value-added services delivered through low-cost channels – even as banking infrastructure and traditional banking products are commoditized.

Some examples:

All of these businesses reflect something profoundly different about the open banking paradigm: banking is increasingly conceived of as something rooted in everyday life, occasioning a far wider range of interactions at many more moments in the day.

High-context recommendations – product and service cross- or up-sell, meaningful communication and useful advice, shortcuts to the next step on any given journey – these all depend on knowing your customer intimately and understanding the motivation behind their transactions.

Fintech partnerships help these financial institutions:

Meeting the needs of the unbanked

The US federal Community Reinvestment Act obliges financial institutions to serve neighbourhoods across a range of incomes in their catchment, but industry consolidation, commercial imperatives, as well as patchy enforcement have seen low-income communities – urban as well as rural – hit disproportionately hard by branch closures spanning decades. It’s a leading cause of financial exclusion, together with lack of government ID, insufficient credit history, and unaffordable or unpredictable service fees.

Open banking platforms can go a some way to addressing financial exclusion while helping mid-sized banks and credit unions reach new customers at reduced risk. 

According to the US Federal Reserve, 6 percent of adults in the United States are unbanked, while 16 percent are under-banked (the FDIC has similar figures). These millions of Americans represent frustrated human potential and an untapped market. Digital service provision is not a cure-all, as the Fed pointed out just before the onset of the pandemic, but open banking platforms can go a some way to addressing the problem while helping mid-sized banks and credit unions reach new customers at reduced risk.

Partner-provided data concerning devices, payments, online and social media interactions, etc., combined with third-party AI systems help manage risk and improve efficiency, so that the market can be served more cheaply and effectively.

Fintech partnerships help these institutions:

Meeting the needs of other businesses’ customers

Open banking – BaaS in particular – has opened many senior executives’ eyes to the exciting potential in distributing financial services over third-party channels, essentially reaching and making money from people and businesses with which their institution does not have a direct relationship.

With embedded finance, the bank brand may take a back seat to another – a racing car maker, a global charity, even a Kardashian or two – but the opportunities to extend your reach are immense. 

These third parties are often fintechs, but they could be any enterprise looking to leverage banks’ money-moving infrastructure, rich troves of data, and competencies in areas like fraud detection and prevention, identity and access management, and regulatory compliance. Banks, in turn, either gain revenue directly from the fees they charge or benefit from their products’ relatively cost-effective exposure to a wider, captive audience.

Some examples:

Embedded finance is an especially promising development. It allows financial services providers and an almost limitless number of non-bank brands to integrate financial services seamlessly in websites, apps, games, and the point of sale for greater convenience and deeper engagement. The bank brand may take a back seat to another – a racing car maker, a global charity, even a Kardashian or two – but the opportunities to extend your reach are immense.

BaaS partnerships help these institutions:

You don’t have to be a fintech startup to be excited by the future these partnerships will help build. Regional banks and credit unions have as much to gain as any other stakeholder, and with the right partners and a few good ideas, they will.

FutureBank is a fintech marketplace and technology platform enabling banks and credit unions of all sizes to test a wide range of third-party products at scale. There is minimal upfront cost and significantly less risk involved in making an investment. Compatible with over 6000 financial institution back-end systems, we offer a single integration point for fintech technologies for rapid time-to-market.

Looking to explore new opportunities in open banking?

Contact FutureBank for a presentation.