In recent years, investment and fintech startups have grown exponentially in the Middle East. Approximately 465 fintech initiatives were anticipated to emerge in the region in 2019, but by 2020, there were more than 760 of them, reports Statista.
However, all opportunities come with some hurdles.
Here we discuss how you can scale your fintech business in 2023.
Fertile Land for Fintech
The demographics of the Middle East region present tremendous prospects for growth of fintech startups. The people of the Middle East are incredibly tech-savvy and eager to adopt new digital technology. For instance, more than 50% of people in the UAE currently utilize digital wallets.
Additionally, encouraging domestic entrepreneurship in the region and lucrative government assistance with fintech-friendly policies are attracting international businesses.
The region’s nations, particularly the UAE, Saudi Arabia, Egypt, and Bahrain, are promoting the fintech ecosystem through a variety of programs, including free zones like the Dubai International Financial Centre (DIFC), regulatory sandboxes like the Egypt fintech sandbox, and the SAMA regulatory sandbox in Saudi Arabia.
Scale for Growth: Here is How
Scalability- The ability of an organization to grow as demand increases without being bound by its resource base. Scalability includes ramping up client acquisition, and market expansion while keeping costs low.
While security remains the biggest risk, there are plenty of other critical curves and bends for fintech startups looking to scale. These include unexpected market occurrences, non-compliance with regulatory requirements, personal and professional liability, data thefts, and increase in global rivalry.
Hence, a well calibrated scaling up strategy is necessary.
Here’s a checklist that fintech companies can use to check their preparedness for scaling.
1. Diverse Finance Sources
Securing finance sources is always the first step in scaling a business, and this is true for fintech as well. A startup’s growth and expansion can be strengthened by diversifying its sources of financing.
Grants, accelerator programs, and public finance can offer viable alternate sources of cash in the early stages where seed funding, angel investment, or crowdfunding is in short supply.
Even for bootstrapped businesses, securing strategic partnerships can be a great way to ensure financial stability.
Having at least one board member, advisor, or mentor with banking experience can go a long way as they can open doors and lend credibility. Get consulting or accountancy companies involved as they are skilled at designing a risk and compliance framework.
2. Manage Resource to do More
Scaling demands a lot of resources. In addition to financial resources, expansion requires time, effort (from development teams and other parties), and dedication.
The ideal way, we suggest, to achieve outstanding scalability in the fintech industry is properly planned funding solutions, budget strategy, required infrastructure, new possible partners and services, and a backup plan.
It should ideally require the complete focus of some of the best employees, including a fantastic HR department that is working nonstop to identify, evaluate, and hire new talent at every turn.
3. Please the King aka Customers
Customer acquisition has always been equated with growth for finance firms. However, in a market where gaining new customers can add up to twenty times higher cost than keeping the ones you already have, founders are strongly encouraged to concentrate on their early adopters in order to scale without becoming overly dependent on finance.
The current users can add value in a number of different ways that can increase growth metrics. Personalized goods and services, for instance, encourage customers to spend more time on your platform, resulting in the collection of important customer information. Customers can be motivated by innovations that are tailored to their needs, loyalty-based programs, and portfolio expansion.
These strategies are effective scaling tools that should never be overlooked.
4. Robust Infrastructure
It is crucial to have a resilient infrastructure, which can necessitate hiring specialized software providers. Otherwise, processes like patching up tech stacks and moving databases to cloud platforms can soon become tedious, expensive, and time-consuming. It can be transformative to work with a service provider who can resolve any problems and who helps start-ups realize their growth objectives without incurring exorbitant fees.
5. Give a Go to Automation
Whenever feasible, take advantage of automation. With chatbots, algorithms, and big data gathering, artificial intelligence has the potential to significantly reduce costs. Fintech start-ups should take use of technological advancements and invest in the right CRM software to maximize automation efforts. Efficiency can be improved by streamlining smaller processes like data administration and marketing campaign tracking.
6. Security is Not an Expense
Customer trust and adherence to all security, compliance, and regulation laws that state actors impose upon businesses are crucial assets for any fintech startup, and cutting corners in these areas frequently results in wanton disaster. Security measures in fintech can be easily marketed as your company’s competitive advantage and therefore should be treated as an investment rather than an expense. Robust safety protocols make scaling easier despite being a necessary step by boosting business confidence and luring new customers and partners, like payment providers, to your platform.
Conclusion
The prospect rich demography of the Middle East offers tremendous growth promises for fintech businesses.
It is the right time to optimize your business with smart scaling methods to get an edge in an increasingly competitive Middle East market.
Let us know your thoughts in the comments below.
