Fintech, innovation drive DIFC growth in 2022

Fintech and innovation became the fastest growing sector in DIFC with 291 new clients. A total of 686 fintech and innovation firms, ranging from start-ups to global unicorns, are now based in DIFC


Muzaffar Rizvi

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Published: Mon 20 Feb 2023, 1:33 PM

Last updated: Mon 20 Feb 2023, 3:44 PM

Dubai International Financial Centre (DIFC) on Monday said it registered 20 per cent year-on-year growth in active registered companies as strategic plans aimed at advancing the scale and depth of value-generating innovation created by the DIFC community proved a great success.

Addressing a media briefing in Dubai, the DIFC top executives said new companies registered in the centre surpassed the annual milestone of 1,000 for the first time as it registered 1,084 new firms last year while the total number of active registered companies rose to 4,377 from 3,644 in 2021.

DIFC’s recorded over Dh1 billion revenue for the first time as it recorded a 18 per cent year-on-year revenue growth to Dh1.06 billion from Dh897 million in 2021.

Operating profit also surged 19 per cent to Dh679 million last year compared to Dh573 million in 2021 while total assets crossed Dh15.3 billion, reflecting DIFC’s strong financial position.

The number of people employed at the DIFC surged 22 per cent to 63,083 workers in 2022.

His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, said DIFC’s exceptional performance in 2022 demonstrates Dubai’s growing role as a major driver of innovation, entrepreneurship and next-generation technologies in the region’s financial sector.

“The centre’s performance reflects its ability to keep pace with global economic shifts and the rapid evolution of the world’s financial landscape, and provide a platform for financial companies to tap new opportunities. DIFC’s growth significantly contributes to the goal of the Dubai Economic Agenda D33 to transform Dubai into one of the world’s top three cities for business,” Sheikh Mohammed said.

Essa Kazim, governor of DIFC; Arif Amiri, chief executive officer of DIFC Authority; and other officials at the media briefing in Dubai on Monday. — Supplied photo
Essa Kazim, governor of DIFC; Arif Amiri, chief executive officer of DIFC Authority; and other officials at the media briefing in Dubai on Monday. — Supplied photo

He said the Dubai International Financial Centre’s 2022 results also reflect the growing demand for a supportive ecosystem from global businesses looking to scale into emerging economies with high-growth financial services markets.

“With financial technology becoming a vital growth catalyst across sectors, the UAE’s ambitious initiatives to drive the future of finance will create immense opportunities and new economic growth not only in our region but also across the globe,” Sheikh Mohammed said.

Banking, insurance assets

The centre also recorded its best-ever performance in additional net commercial space leased with 809,000sqft leased compared to 349,000sqft in 2021.

“Total banking assets booked in DIFC remained stable at $199 billion while an additional $166 billion of lending was also arranged by DIFC firms, reflecting a growth of 54 per cent,” according to the DIFC statement.

DIFC is home to 17 of the world’s top 20 banks, 25 of the world’s top 30 systemically important global banks, five of the top 10 insurance companies, five of the top 10 asset managers and many leading global legal and consulting firms.

As a global hub for emerging market Wealth and Asset Management, DIFC portfolio managers invested $164 billion in 2022 compared to $151 billion in 2021 while Venture Capital raised increased to $1.2 billion, up by 78 per cent.

Gross Written Premiums for the insurance sector reached $2.1 billion, rising from $1.8 billion in 2021, the statement said.


Contributing to global industry

The centre leads MEASA in contributing to global industry development by being home to the largest clusters of banking and capital markets, fintech, insurance, wealth and asset management and professional services companies in the region. Strong growth has continued across business sectors, including banking, capital markets, wealth and asset management and professional services.

DIFC-based fintech and Innovation companies attracted over $615 million in 2022. Fintech and innovation became the fastest growing sector in DIFC with 291 new clients. A total of 686 fintech and innovation firms, ranging from start-ups to global unicorns, are now based in DIFC.

A total of 1,369 financial and innovation related entities are now active and operating within DIFC, up 22 percent from 2021, while 291 new fintech and innovation firms joined in 2022 taking the total to 686, an increase of 36 percent.

The number of Dubai Financial Services Authority (DFSA)-regulated financial entities grew to 590 with 89 regulated financial service firms authorised in 2022, up from 51 in 2021.

Notable firms joining DIFC in 2022 included ADIB, BIC-BRED, Continental Group International, fintech unicorn Darwinbox, Jefferies, Habib Bank AG Zurich, Lord Abbett, 1291, Prevensure, Proton, Sculptor Capital Management Hong Kong Limited, 3S Money, United Bank of Africa Group and Volante.

DIFC a major contributor

Essa Kazim, governor of DIFC, said Dubai’s economy continues to grow and DIFC is proud to be a noteworthy contributor to the emirate's GDP and a key creator of employment.

He said the UAE's globally recognised management of the pandemic, strategic investment and business-friendly structural reforms, long-term residency schemes, and innovation-friendly regulatory framework have helped draw entrepreneurial talent from every corner of the world.

“Our focus in 2023 will be to accelerate the future economy by building upon our already strong position as a preferred gateway for businesses looking to expand into and grow within the massive Middle East, Africa and South Asia (MEASA) market and attracting more investment into the UAE's financial sector,” he said.

Kazim said the DIFC has about 60 hedge fund firms, with north of a trillion dollars in assets under management, waiting to be licensed. "A few have already been licensed," he said.

Millennium Management, ExodusPoint Capital Management and BlueCrest established a presence in Dubai last year, just three of the many funds attracted by lower licensing fees and capital requirements for the industry.

"The hedge fund industry is capitalising on new rules and regulations that have been developed to support the sector, which is one of the sources of DIFC’s growth, Kazim said.

Unparalleled opportunities for startups

Arif Amiri, chief executive officer of DIFC Authority, said DIFC's comprehensive fintech and innovation proposition has created unparalleled opportunities and success for start-ups, global players and unicorns.

“Our client growth continues to be strong across all sectors. However, we continue to be excited by the high numbers of financial firms and fintech and innovation clients who are using DIFC as a platform to grow faster than the market,” he said.

“We are confident that DIFC’s approach will continue to elevate Dubai's reputation as a hub for technology and innovation, and further strengthen our position as a global centre for financial services,” he said.

Firms within DIFC manage $445 billion worth of assets, highlighting Dubai’s reputation as a safe and secure investment destination as well as a preferred global financial centre. DFSA and DIFC’s globally recognised levels of transparency and governance have helped attract some of the world’s most renowned financial companies, such as Goldman Sachs, Morgan Stanley and BlackRock.

A future focused financial centre

DIFC maintained its position as the leading financial centre in the region in the Global Financial Centre Index rankings and achieved its highest increase in its global ranking in the green financial centre index.

In 2022, DIFC partnered with the Global Ethical Finance Initiative (GEFI) to launch the first industry led programme ahead of the United Nations Framework Convention on Climate Change’s 28th Conference of the Parties (COP28) to be held in Expo City Dubai.

The Path to COP28 will drive change across the world’s financial industry relating to delivering Net Zero; unlocking Islamic Finance; financing nature and biodiversity; and financing sustainable development goals. As host financial centre for the Path to COP28 programme, DIFC is supporting a series of report launches, round tables, training programmes and community engagements in the run-up to the event.

In 2022, DIFC continued to develop its position as one of Dubai’s leading lifestyle destinations. Footfall within Gate Avenue increased to 10.34 million, reflecting a year-on-year increase of 71 per cent.


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