So much of what defines fintech as a sector is its tendency to allude towards an exciting future, and what might be the next wave of technological innovation.
For contemporary investors, however, there is a business imperative and a growing desire not to be enticed by what sounds or seems most intriguing at first glance and to be drawn instead towards tangible evidence of real potential.
Or, to put it another way, what investors really want in 2025 is to find and fund fintech operators that can demonstrate strong fundamentals, rather than a proximity to popular buzzwords or overhyped trends.
GCC as a hotbed for fintech
While global trends and tendencies in fintech ebb and flow, one pattern of progress that is showing solid and seemingly immovable staying power is the growth of the GCC region as a hotbed for innovation and investment.
The UAE and Saudi, particularly, have become two of the preeminent fintech markets in the world in recent years, owing in part to generally accommodating and supportive regulatory frameworks, and ready access to funding opportunities.
From the perspective of ambitious fintechs themselves, the key to unlocking some of that funding potential in the GCC is increasingly to focus on fundamentals, according to Taras Boyko, a highly experienced European investor, founder of UAE-based BTG Corporate Services Provider, and advisor to fintech firms globally.
“In 2025 and looking ahead, I think the emphasis for fintechs should be on getting their core offerings right and demonstrating their scalability that way,” says Taras Boyko. “In the past, perhaps, startups have benefitted from hype in certain parts of the broader fintech sector but right now investors are looking for product maturity and unit economics that make the most sense.”
“There’s no doubt that there will continue to be enormous opportunities for fintechs and investors in GCC countries but founders need to stay focussed on getting the right building blocks in place, if they want to attract the right funding and accelerate their development.”
AI’s growing impact
Clearly, AI is among the fintech-impacting trends currently most prominent in the minds of investors and innovators in the GCC region and worldwide, with PwC estimating that AI could even add as much as $320 billion to the Middle East’s collective economic output by 2030.
Against that backdrop, GCC countries are sure to continue demonstrating their openness to fintech’s AI-driven evolutions, as they have so consistently and fruitfully in recent years in the realms of digital banking. Indeed, AI tech is already influencing the nature and functionality of the region’s latest fintech tools, as seen with the Dubai-based homebuying platform Huspy recently launching a new AI-powered mortgage chatbot available via WhatsApp.
Elsewhere, operators including the Saudi Awaal Bank have been partnering with MasterCard to use AI-powered tech to proactively assess financial transactions for potential vulnerabilities and to reduce the associated security risks. Notably, those capabilities were enabled through MasterCard’s 2017 acquisition of the AI software development company Brighterion.
From the perspective of founders too, AI tech could be invaluable as a means of doing more with less, and being able to scale up operations in ways that would otherwise be impossible. For investors, however, the fundamentals of a company’s proposition will remain the essential focus and the decisive factor in their fund allocation processes.
“AI is becoming a core component of fintech software developments in the GCC and worldwide, and that’s really exciting, of course,” says Boyko. “But for investors, in the end, what will matter most is the tangible outcomes and the unit economics they can see from founders and their companies.”
Why compliance remains critical
Companies with ambitions to attract investor attention in GCC countries must also work diligently to ensure that they are compliant with relevant regulatory frameworks. Failing to do so or leaving scope for uncertainty on any such issues can be a ‘red flag’ from an investor’s perspective, according to Taras Boyko.
“Regulatory environments in the region are designed increasingly to encourage and welcome innovation among fintechs but the rules are there for good reason and, in any case, being ready to comply fully with them and to be transparent about that readiness or otherwise is really a non-negotiable requirement for potential investors,” Taras Boyko explains.
High-growth areas and verticals
Across the GCC, there are certain hotspots within the fintech sector that stand out as high growth areas and verticals within which business is booming. Among them are the ‘buy now, pay later’ (BNPL) market, where Tabby and Tamara have emerged as regional leaders. Both companies have attracted significant funding and rapidly growing customer bases, with Tabby recently attaining unicorn status and reportedly preparing for a potential IPO on the Saudi Exchange.
At the same time, within the digital payments sector, companies such as Telr, Ziina, and Zbooni are expanding steadily, offering flexible payment and invoicing solutions for SMEs and consumers alike. On the digital banking front, Wio continues to grow its user base and strengthen its reputation among tech-savvy users in the UAE.
Beyond those arenas, blockchain-based services and cryptocurrencies are also emerging to greater prominence in GCC countries, while ‘open banking’ continues to consistently create scope for significant fintech innovation and app integration, including in Bahrain, Jordan, Saudi Arabia, the UAE and Oman.
Finding real value and potential
Investors aim to look beyond the hype to find what they view as real, tangible and demonstrable profit-making potential. In the fintech sector, perhaps more so than in most other markets, it is especially important to remain clear-eyed and level-headed precisely because there is often so much talk and excitement around ‘the next big thing’.
“That doesn’t mean there isn’t lots to be excited about in the context of what we might think of as ‘Fintech 2.0’,” Taras Boyko explains. “There absolutely is, in the GCC perhaps more than anywhere else. But investors in general are conscious that they need to find ways to discern where the greatest scope for scalability and solid returns really lies.”
Staying focussed on fundamentals
When asked recently by the international payments giant Visa, many fintech executives based in the GCC cited talent acquisition and retention among their most pressing challenges heading into 2025. Finding ways to neatly and productively integrate AI into their operations, while maintaining compliance with relevant regulatory frameworks, is sure to be another guiding priority. However, where the emphasis is on winning the backing of supportive investors, there is no substitute for having a robust underlying value proposition and a transparent approach to operational development. “Fintech innovation has for a long time helped to shape and characterise our shared futures, wherever we are in the world,” reflects Taras Boyko. “But founders who want to do well in the GCC funding game in 2025 need to keep their gaze a little closer to home and concentrate squarely on the fundamentals. So that means getting their products right and being ready to go in what we know is a thriving but clearly also a consistently evolving and highly competitive fintech landscape.”
