10 years on from the global financial crisis, we have a revolution in finance to celebrate.
Ten years on from the start of the global financial crisis in 2007-8, the focus of many policy makers has been to make banks safer and stronger. More capital please.
Global to regional. Although Middle East banks had no role to play in the origination of the subprime crisis, they will still need to comply with regulatory reforms such as Basel III. The introduction of reams of regulation across the banking and finance sectors has indeed been necessary to future protect customers, the sector and governments alike in the next wave of a crisis. The last ten years has also witnessed the emergence of another wave of change and disruption. The intersection of financial services and emerging technologies, in FinTech.
In fact, such is the penchant and excitement for FinTech that Goldman Sachs estimates that the startups driving the industry could be worth revenues around $5 trillion. These include ventures covering peer-to-peer lending, crowdfunding, payments, wealth management, and regulation. And some of the players in these spaces are growing, and fast. The interest and activity in the Middle East is also growing with the UAE leading the way by supporting and attracting enterprises. Promising path.
Certainly not to suggest that the death of traditional banks is nigh. Indeed, the current size of capital being lent on alternative platforms is miniscule. However, the emergence of FinTech and the proposed revolution it shall bring is worthy of celebration. It will force incumbents to cut costs and improve the quality of their service. Regulators should be happy and so should those seeking to diversify their economies, including in the Middle East. More innovation please.
Osman Khan, Fintech Team
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