The Dubai International Financial Centre (DIFC) partnered with Refinitiv, a business of the London Stock Exchange Group and a prominent global provider of financial markets data and infrastructure, to release a report titled “Drivers of Innovation in Financial Services.” The report offers a five-year forecast on the future of innovation within the financial services industry.
In the wake of the initial wave of innovation triggered by the pandemic, the global financial services industry is undergoing significant transformations. Responding to the changing preferences and expectations of customers and clients, there is a growing demand for convenient and personalized services. This surge in demand has intensified competition and brought about continuous disruptions as new players, including FinTech and Big Tech companies, carve out their presence in an expanding market.
Significant investment
Moreover, businesses are harnessing the power of automation technologies like artificial intelligence (AI), blockchain, and cloud computing to drive innovations in their business models and products. This has resulted in reduced operating costs and improved efficiency by eliminating inefficient processes.
Additionally, the FinTech sector is experiencing significant investment, with a projected compound annual growth rate (CAGR) of 17.2 percent, reaching $949 billion between 2022 and 2030. This investment is fueling the rapid pace of FinTech innovation, both globally and in Dubai. Dubai’s strategic location provides access to high-growth emerging markets in the Middle East and North Africa (MENA), Western Europe, Asia, and Africa, further accelerating FinTech development.
Four key trends
Furthermore, the report reveals four significant trends that will play a crucial role in shaping the financial sector in the coming five years. These trends include harnessing the potential of open finance, increasing decentralization in finance, the rise of digital assets as a viable asset class, and the integration of environmental, social, and governance (ESG) considerations throughout banking operations.
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