The GCC is set to experience a surge in the use of FinTech platforms as consumers turn away from physical offerings during the ongoing global Covid-19 outbreak. It comes after Bahrain’s national electronic wallet BenefitPay announced a 1257% increase in the number of remittances through its Fawri+ service during the month of March 2020, worth some $273 million.
The spread of Covid-19 has presented enormous challenges for banks, but it also highlights the need for rapid technological transformation and a new wave of innovation through collaboration with the thriving FinTech sector. The GCC trend is echoed around the world, with a study by financial advisory firm deVere Group revealing that the use of FinTech apps in Europe surged by 72% in just one week at the beginning of the crisis.
The spread of Covid-19 has presented enormous challenges for banks, but it also highlights the need for rapid technological transformation
At the same time, ATM network Link revealed that the use of physical cash in the UK dropped by 50% immediately after the government’s announcement of restrictions on movement. According to industry experts, the FinTech market in MENA is set to reach a record high of $2.5 billion by 2022, with GCC countries playing a major role in the growth of the sector.
Bahrain is home to the oldest and most established financial centre in the Gulf region. It currently hosts more than 300 financial institutions, with Bahrainis continuing to play a large role in the financial sector. Among the most successful FinTech ventures in Bahrain are Sharia-compliant cryptocurrency platform Rain, open banking API provider Tarabut Gateway, NEC Payments and BENEFIT, the parent company of BenefitPay.
Bahrain offers a strong local test market backed by government initiatives including a regulatory sandbox which allows FinTech firms to experiment with new ideas and solutions. David Parker, Co-Chief Investment Officer at Bahrain Economic Development Board, said that online banking and cryptocurrencies are among the products with the biggest increase in transactions.
Parker said: “At a time when few customers can access physical services, FinTech platforms across the GCC are experiencing a surge in use, something we anticipate continuing well into the summer months. BenefitPay’s significant increase in transactions shows the region’s growing appetite for new technologies, and that being digital-first is no longer optional.”
Abdulwahed AlJanahi, Chief Executive of BENEFIT, added: “The remarkable growth of usage of electronic financial payments reflects on the awareness and commitment of our community to take the precautionary measures, reducing paper usage to limit the spread of the Coronavirus.”
“We have also witnessed a large number of businesses and home businesses that began providing their customers with the option to pay via BenefitPay, ensuring the success of our national team to limit the spread of this pandemic.”