DIFC marks best year of gains

The number of new firms operating in Dubai International Financial Centre grew 20 per cent in 2020, taking the total to 2,919, the global financial hub said on Tuesday.

Marking the best performance in its 16-year history, DIFC recorded in 2020 a 24 per cent increase in the number of active companies to 915, up from 735 in 2019.

In a statement, it said the number of businesses in the FinTech and Innovation ecosystem more than doubled with 189 joining in 2020, taking the total to 303.

“This represents substantial progress on DIFC’s 2024 vision and strategy to drive the future of finance. The wide range of new clients further contributes to the breadth and depth of DIFC, underscoring the solid foundations that the Centre has been built on. Business sectors across DIFC achieved exponential growth, including banking, capital markets, wealth and asset management, FinTech and professional services,” the financial hub said.

Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum said DIFC’s exceptional accomplishments in 2020 demonstrate the strength of the economic foundations created by Vice President and Prime Minister of the UAE and Ruler of Dubai His Highness Sheikh Mohammed bin Rashid Al Maktoum.

“DIFC’s best ever annual performance in its history, achieved in the country’s 50th anniversary year, also reflects the UAE’s and Dubai’s ability to partner with its business communities to facilitate continued growth despite the most challenging conditions we have seen in the international economy,” said Sheikh Maktoum.

Notable financial services firms opening headquarters and regional offices in DIFC in 2020 included Tata Asset Management, Samba Financial Group, Caixabank and AfricaRe. Fintechs included global and regional names such as Ebury, Ripple, Adyen, KoFax Me and Tabby.

In 2020, total banking assets booked in DIFC increased six per cent to $189 billion. An additional $64 billion of lending was also arranged by DIFC firms. DIFC based Wealth and Asset Management portfolio managers invested $203.5 billion, up by 106 per cent, from $99 billion in 2019, with the industry now worth $528.5 billion. Gross written premiums for the insurance sector reached $1.7 billion.

DIFC's operating profit was $125 million, broadly consistent with the prior year despite global economic headwinds.

Essa Kazim, governor of DIFC, said DIFC delivered exceptional growth across all business sectors, which reflects the confidence the global finance industry holds in DIFC.

“During 2021 we will continue to demonstrate resilience following the Covid-19 pandemic, are well-positioned to make further progress on our key 2024 priorities and will contribute further to Dubai's long term economic growth.”

Arif Amiri, chief executive officer of DIFC Authority, said DIFC’s commitment to driving the future of finance has delivered tremendous growth in the fintech and innovation sector. “This is an area where we will continue to lead the way in the region given the industry is accelerating its implementation of technologies, recognising strategies and operating models need to change in a post pandemic world.”

The number of fintech and innovation firms in DIFC almost doubled in 2020 and has tripled in the last two years. The centre is now home to 303 businesses which is more than 50 per cent of those operating in the GCC.

In 2020, DIFC became a major part of the Dubai Future District. A major initiative launched in 2020 was the DIFC Innovation Hub, the region's only comprehensive technology ecosystem.

Six businesses received funding from the DIFC FinTech Fund including Rain, Beehive, FlexxPay, Go Rise, NOW Money and Sarwa, which enabled them to demonstrate unique solutions and generate revenue.

Start-ups aspiring to be just as successful as those who received funding joined the fourth cohort of DIFC Fintech Hive's accelerator programme. A record 720+ applications were whittled down to 17, covering Islamic FinTech, and broader FinTech. As many as 111 start-ups have been part of the programme since 2017. To meet demand, the DIFC Fintech Hive tripled in scale during 2020 to capitalise on exponential sector growth. FinTech firms based in DIFC Fintech Hive have now raised more than $1.1 billion (to accelerate regional growth.

DIFC said it introduced and updated laws and regulations to reflect global best practices and distinguish itself as the leading financial centre in the region.

DIFC’s new leasing law provided further protection to property owners and tenants, aligning the centre's legal and regulatory framework with best practice and international standards. The new Data Protection Law brought the previous DIFC Data Protection regime in line with the EU's General Data Protection Regulation principles, a first for the region, reflecting the DIFC's commitment to data security, information protection and cyber resilience.

— issacjohn@khaleejtimes.com