Arthur D. Little said that the UAE has strengthened its position as the leading fintech hub in the region thanks to advanced regulation, institutional stability, and globally connected financial centres such as Dubai and Abu Dhabi.

The company added in statements to Annahar that the UAE moved early to establish specialised fintech ecosystems, including regulatory sandboxes and licensing frameworks that facilitate the expansion of startups and attract investors.

It explained that these factors, along with strong digital infrastructure, government supported innovation agendas, and access to regional and international capital, have strengthened the country’s position as the leading fintech hub in the Middle East and North Africa.

This comes alongside the company’s report titled The Next Phase of Fintech Growth in the Middle East and North Africa, based on a survey conducted in the second half of 2025 that included more than 140 founders and senior executives in fintech companies across the region.

According to the report issued on Wednesday, around 60% of participants believed that the UAE will be the market most capable of leading fintech innovation over the next three years, while about half of respondents considered the regulatory environment in the country to be positive and supportive of growth.

Arthur D. Little told Annahar that 61% of survey participants viewed the UAE as the most capable market for leading innovation in the sector over the next three years, reflecting strong confidence in the maturity of its ecosystem and its long term growth prospects.

Saudi Arabia also emerged as a rising fintech hub, with 31% of founders and entrepreneurs saying it will be among the leading markets for innovation in the sector.

The report indicated that 77% of respondents said the fintech sector in the region was stronger in 2025 compared to the previous year, while 75% expressed optimism about the sector’s medium term future, rating it between four and five out of five.

Despite this optimism, the report highlighted ongoing structural challenges, as 78% of participants considered the lack of cross border regulatory alignment a major barrier, while 73% pointed to difficulties in raising fintech financing, in line with a global slowdown in fintech financing.

Arjun Singh, Partner and Global Head of Financial Services at Arthur D. Little Middle East, said that the fintech sector in the Middle East has spent a decade building credibility through regulatory frameworks, standard investment cycles, and real adoption of digital services. He added that this structural depth will be the key factor in facing current pressures.

Despite global caution in venture capital financing, fintech financing in the Middle East and North Africa reached 3.8 billion dollars in 2025, according to the report.

Notable deals included the AI based Islamic bank Mal Bank, which raised 230 million dollars, the crypto asset trading platform Rain, which secured 58 million dollars, the embedded finance company Hala, which raised 157 million dollars, and the financial services and shopping app Tabby, which raised 160 million dollars.

Arthur D. Little, founder of the company (official website)

Arthur D. Little told Annahar that the UAE remains attractive to investors thanks to “regulatory stability, a supportive environment for innovation, strong digital infrastructure, and globally connected financial centres.”

It added that these factors reinforce the UAE’s image as “one of the most scalable and resilient fintech markets in the region.”

Growth areas

The report identified six key growth areas in the sector, including SME financing, cross border payments, digital wallets, digital Islamic finance, the development of Web3 based payment systems and stablecoins, as well as real estate technology and asset fractionalisation.

The company told Annahar that SME financing remains one of the most underserved areas by traditional financial systems, which opens the door for more flexible and faster lending solutions.

It also said that cross border payments and remittances represent a major opportunity given the large expatriate population in the region and the growing demand for low cost and fast transfer solutions.

It added that digital wallets are gaining strong momentum as mobile payment adoption expands, while Islamic fintech products remain less developed than the level of demand despite opportunities in payments, savings, lending, and wealth management.

Regarding technology trends, participants ranked embedded finance as the most impactful innovation in the next phase at 34%, followed by artificial intelligence and machine learning at 29%, and open banking at 21%.

Integrated payment models

Arthur D. Little told Annahar that the coming phase will see financial services shift toward more integrated and personalised models, with financial services embedded directly into sectors such as real estate, healthcare, and education.

It added that artificial intelligence will enhance personalisation, risk assessment, and credit underwriting capabilities, while open banking will accelerate data exchange and enable new financial products and partnerships.

A robot operating using artificial intelligence (AFP)

However, the company warned that the biggest challenge lies in “execution speed” within the ecosystem, particularly regarding the expansion of cooperation between banks, regulators, and fintech companies.

It told Annahar that areas such as cross border payments, embedded finance, and digital assets still face obstacles linked to traditional banking infrastructure, compliance complexity, long technical integration cycles, and slow institutional decision making.

It added that 73% of participants believe that banks are not adapting quickly enough to current transformations, while cross border regulatory alignment remains the most significant challenge to sector growth.

Mehdi Letaief, Chief Financial Services Officer at Arthur D. Little Middle East, said the data shows that the ecosystem “has built something real over the past decade,” adding that the challenge now is “to protect what has been achieved, maintain cooperation between regulators, banks, and fintech companies, and prove that this structural depth can withstand pressure, not only under favourable conditions.”