Gulf fintechs are challenging banks’ and brokerages’ long-standing dominance, as the GCC forcefully pursues a digital future.

Across the Gulf Cooperation Council (GCC) states, a new generation of fintech start-ups are challenging the dominance of incumbent banks and brokerage firms. With the United Arab Emirates emerging as a hub, the region is experiencing a widespread digitalization of financial services, driven by mobile-first platforms, specific regulations, and growing consumer demand for transparency, specialization, efficiency, and speed.

“The GCC fintech ecosystem is undergoing a structural shift, shaped by macroeconomic diversification, digital policy agendas, and a wave of consumer-first innovation,” says Said Murad, a senior partner at UAE-based venture capital firm Global Ventures. “Trends attracting investor attention include the rise of open banking, increased adoption of embedded financial services, and mainstreaming of alternative lending and wealth solutions.”

Dubai International Financial Centre (DIFC) in the lead, the UAE now hosts more than 1304 AI, FinTech and innovation companies. Meanwhile, Abu Dhabi Global Market (ADGM) has become a testbed for open banking and digital asset regulation. Together, they are positioning the emirates as a major global fintech ecosystem.

From buy-now-pay-later (BNPL) services and payment platforms to Islamic digital banks and brokerage apps, Gulf fintechs are gaining traction with both users and investors. Start-ups like Tabby and Tamara have made their mark in consumer credit while wealthtech platforms like Sarwa have made investing more accessible to a broader demographic.

“Digital payments dominate the GCC fintech landscape, projected to hold a 90% market share and volumes of $7 trillion by 2032,” says Ivo Detelinov, general partner at Salica Oryx Fund. “Open banking is gaining traction, with Bahrain pioneering regulations and Saudi Arabia having implemented its Open Banking Policy in 2022. Islamic fintech is also on the rise, with assets in Islamic banking projected to reach $4 trillion by 2026, primarily driven by GCC nations.”

Challenging The Old Guard

Fintech development is increasingly pressuring incumbent Gulf banks and brokers to adapt. Many traditional institutions still rely on legacy infrastructure, manual processes, and rigid compliance frameworks, slowing their ability to innovate and respond to changing consumer expectations.

“Without bold investment in modernization, established players risk being outpaced by digital-native challengers offering faster, more agile, and lower-cost services,” warns Sara Grinstead, managing director at Alvarez & Marsal.

The brokerage sector has also been slow to adapt. While some firms have introduced digital onboarding or trimmed commissions, many still lack the user-friendly design, transparency, and product diversity that a younger, more globalized investor base expects.

A key advantage of fintechs is structural, argues Samy Mohamed, CEO of Tabadulat, a new ADGM-based, digital Shariah-compliant brokerage. 

“Incumbent brokers are often tied to legacy systems and limited by domestic markets, making them slow and expensive,” he says. “As a global, digitally native platform, we have a significant cost advantage that we pass directly to our customers.”

Independence is Tabadulat’s most powerful advantage, he adds. “We aren’t beholden to outdated models. This allows us to innovate new Shariah-compliant financial structures that were previously unattainable to retail investors.”

Challenger Banks Gain Ground

The UAE is becoming a hotspot not just for fintech growth but also in driving institutional innovation.

Emirates NBD, First Abu Dhabi Bank (FAB), and Abu Dhabi Islamic Bank (ADIB) have actively invested in next-generation platforms and API ecosystems. New ventures like Wio Bank, launched with backing from ADQ, Alpha Dhabi, e& (Etisalat) and FAB, signal a strategic shift toward purpose-built digital banking infrastructure while fintechs are filling specific market gaps.

Ruya, a fully digital Islamic community bank, typifies this emerging model. Ruya offers UAE Pass integration, which enables full digital onboarding in under five minutes, and mobile-first banking, with no hidden fees or minimum balance and access to digital assets.

CEO Christoph Koster, says: “We’re the world’s first Islamic bank to offer direct access to cryptocurrencies like Bitcoin and Ethereum in collaboration with our fintech partner Fuze [a cloud communications and collaboration software platform] and are working on introducing digital gold, stocks, and ETFs as well as other asset classes, all available within the ruya app.”

Koster sees fintechs like ruya as collaborators rather than adversaries of traditional banks. 

“Fintechs bring agility and niche focus; ruya brings regulatory credibility, customer trust, and ethical oversight. Together, we can innovate faster, with trust,” he says.

Faced with mounting competition, traditional institutions are adapting, albeit unevenly. Some have launched digital subsidiaries while others have taken equity stakes in fintechs or entered strategic partnerships.

Emirates NBD, for example, has partnered with BNPL provider Tabby’as the issuing bank for its card. Mashreq, another Dubai-based lender, has embraced a banking-as-a-service (BaaS) model, offering core infrastructure to emerging fintechs. FAB and ADIB continue to scale their in-house digital capabilities and innovation labs.

In Saudi Arabia, some lenders have launched their own BaaS models while others collaborate with fintech firms. In April 2025, Al Rajhi Bank announced a strategic partnership with Muhide, a Saudi fintech platform, to digitally authenticate and govern SMEs’ finance transactions.

“Banks in the GCC have primarily focused on digital transformation, making heavy investments in mobile channels, technology delivery hubs, and the transformation of branches,” notes Sheinal Jayantilal, partner and leader of McKinsey’s Retail Banking and Fintech Practice in EEMEA. “Some banks have even rationalized their branch networks to lower servicing costs, which has been a significant step in staying relevant and meeting customer demands.”

But the pace of change varies significantly. Compliance-heavy operations, siloed decision-making, and cultural resistance often hold back legacy players

“Fintech competition is now a tangible reality for banks in the GCC. What was once theoretical is now a boardroom concern,” says Mustafa Domanic, a partner in Oliver Wyman’s Dubai office. “Banks shouldn’t fear the migration of customers; it’s already happening. The winners will be those who participate in the transformation, not resist it.”

Regulatory Catalyst

Much of the momentum in fintech across the GCC is being fuelled by forward-thinking regulators. The UAE’s ADGM and DIFC have launched regulatory sandboxes, fast-track licensing schemes, and frameworks for digital assets and open banking.

The UAE stands out as a progressive regulatory environment in the GCC, says Mohamed Fairooz, Middle East lead at Standard Chartered’s SC Ventures. “We see the regulator here proactively embracing fintech, digital assets and innovation sandboxes.”

Saudi Arabia, too, is catching up. Under Vision 2030, the kingdom aims to host 525 fintechs by the end of the decade. The Saudi Central Bank and the Capital Market Authority have introduced sandboxes and digital finance strategies to attract innovation.

Other jurisdictions, like Bahrain, are introducing emerging technologies in a bid to attract tech firms and investors.

“Bahrain has emerged as a regulatory test-bed thanks to the Central Bank of Bahrain’s early embrace of sandboxes and open banking,” notes Grinstead. “It has attracted digital banking and compliance technology innovators, although market size presents scalability limits without cross-border expansion.”

Indeed, cross-border scalability remains a pain point. Fragmented regulation, duplicative licensing, and differing compliance requirements across jurisdictions hinder regional expansion.

Staying Competitive

As Gulf fintechs mature, some will acquire full banking licences while incumbent banks and brokers will increasingly seek to embed fintech capabilities to stay competitive.

McKinsey forecasts that MENA will be the fastest-growing region globally, with 35% annual growth in fintech net revenue until 2028, compared with a global average of 15%. A large proportion of this growth will be driven by the GCC’s banking sector. 

Sectors like embedded finance, AI-driven personal finance, and wealthtech are driving the next wave of growth. M&A will also accelerate as banks acquire fintechs to fast-track innovation, according to a report by Lucidity Insights.

For traditional banks and brokers, survival will require more than digitizing legacy systems; it will demand a rethinking of the entire value chain. Pricing models, onboarding, product offerings, and ethical frameworks will all need reinvention.

“To remain competitive,” Domanic argues, “banks must closely monitor developments in the fintech sector and understand how emerging business models may impact their core operations.”