I met Raja Al-Mazrouei in the glittering new FinTech Hive at the Dubai International Financial Center (DIFC), all open-plan workspaces, break-out areas and coffee machines.
There is even a sound-proofed pod suspended from the ceiling that looks like a football cut in half, where you can make mobile calls without being disturbed by the background noise from the young entrepreneurs who will be working there.
I remarked to her that it was all “pretty hip,” and she replied, “Yes, I suppose you could call it hip.”
Since May this year, Al-Mazrouei has been in charge of the DIFC’s financial technology (fintech) initiative, which the center sees as a crucial part of its ambitious plan to triple in size by 2024, helping maintain Dubai’s lead as the premier financial marketplace in the region.
Last week, it officially opened the FinTech Hive at DIFC, and marked that by announcing the names of 11 successful applicants to its “accelerator” program, designed to attract fast-growing fintech companies to Dubai. “It’s been very busy,” Al-Mazrouei said.
Fintech is as hip as it gets in the sometimes dull world of financial services. Essentially, it is the application of new technology to the finance industry, ranging from mobile-based personal banking services through to huge global systems like the blockchain digital accounting system and cryptocurrencies like bitcoin.
Fintech has attracted an army of smart young entrepreneurs, all keen to win a slice of the estimated $50 billion that has been invested in fintech in recent years, according to a recent analysis by consultants Accenture. The DIFC’s Hive is the latest bid to create a fintech hub in the Arabian Gulf region, to rival more established centers like New York, London and Singapore.
“We want to create an ecosystem of partners to encourage ‘growth stage’ fintech firms to use DIFC as their hub,” Al-Mazrouei said.
The issue, however, is that virtually every other financial center in the Middle East has the same ambition. While the region came pretty late to fintech, compared to the big global financial markets, there has been a clamor to catch up.
In early 2016, Abu Dhabi declared its ambition to be the fintech capital of the Gulf, and has since set up and is operating its own fintech hub in the Abu Dhabi Global Market, the UAE’s new financial free zone.
Bahrain has also established a fintech hub, while Saudi Arabia has declared fintech to be an integral part of the Vision 2030 strategy to transform the economy, and has the financial firepower to back up that ambition. There is speculation in the Kingdom of a big investment in fintech by one of its funds.
Even Cairo has highlighted fintech as a growth area, and set up two units to encourage financial entrepreneurship in the sector.
So is the fintech market in the region sufficiently big to satisfy all those aspiring new entrants? “I think the market is there. Dubai has some other advantages, apart from the fact DIFC is the leading financial hub in the region. The fintech initiative coincides with the government’s innovation program, and with the whole ‘smart city’ strategy. It makes a compelling case for Dubai,” said Al-Mazrouei.
In theory, the Gulf should be a magnet for fintech investment. The Middle East, Africa and South Asia (MEASA) region — of which it is the hub — has a population of 3 billion, a big youth demographic, and high rates of cellphone usage. Underbanked in the traditional sense, the theory is that young people in the region will miss out altogether on traditional branch banking, and go straight to mobile services.
These factors would seem to make it a natural fintech hub, but investment has so far lagged global levels. Only 1 percent of the $50 billion estimated by Accenture has gone into the Middle East.
The FinTech Hive at DIFC is designed to help bridge that gap. Its “accelerator” program, which advanced significantly last week with the unveiling of the 11 successful participants, is a crucial part of that strategy.
The 11 “winners” are what Al-Mazrouei calls “growth stage” firms. “They are already doing business but they might need some fine-tuning, for example to upgrade their technologies to take into account the special needs of the MEASA region — products that address the access for younger populations of the Middle East, Africa and Asia who are the most likely potential customers of fintech products for personal finance. The firms all have either a financial history, or they have raised investment already. Some of them have funds and a working product,” she explained.
The accelerator program involves a three-stage “curriculum” over the coming 12 weeks. In the first phase, the 11 firms will meet with executives from the accelerator’s financial partners — 10 prominent banks — to identify industry challenges and possible solutions to address them.
In the second phase, they will receive direct “mentoring” from the financial institutions and from the DIFC, on technology, legal and regulatory affairs, and Islamic finance.
The third phase will involve the companies preparing to pitch ideas at an “investor day” in mid-November, when they will present their products to a group of private investors, bankers and government officials. The countdown to investor day has already begin in the DIFC, with posters showing the number of days remaining until the 11 aspirants learn their fate.
Then, assuming they make the cut, there are several possible outcomes, Al-Mazrouei explained. “They will be acquired by one of the banks; they will attract more funding to invest more in their development; or they will have contracts to provide services to financial firms,” she said.
Any of those would seem to be attractive propositions for young fintech-savvy entrepreneurs. Of the 11 chosen for the accelerator, two are from the UAE, three are from the US, and there is one each from the UK, Sweden, Jordan, India, Singapore and Azerbaijan.
The Azerbaijan team, which has developed a fintech product for Islamic finance, was especially enthusiastic and insisted on attending all the interviews in person, rather than via Skype, Al-Mazrouei said.
There is interest from Saudi entrepreneurs too, which may show through in the next accelerator round. “Some young Saudis recognized me in the DIFC and began explaining about their payments system. It’s very ambitious and I’m sure it has a future,” Al-Mazrouei said.
She hopes the changes going on in Saudi Arabia under the Vision 2030 strategy for economic diversification will being benefits for the whole region. “I think all the signs are pointed in the right direction and are aligned with the overall economic strategy. The dynamics of the region are changing but Saudi Arabia is in tune with those plans. The recent appointments of women to senior positions in the financial industry was a very good indicator of the way things are going,” she said.
Another reason Al-Mazrouei is confident there is a market for fintech in the region despite the growing number of centers focusing on it is the level of response DIFC got to its accelerator program. “It was overwhelming. We thought we’d get between 70 and 80 applicants, not 111 as we (did get),” she said.
On the tricky question of whether she and the DIFC would cooperate with other centers, rather than competing for business as seems to be the case now, Al-Mazrouei responds: “I am always willing to cooperate. But all the other centers are each doing it slightly differently. I think the accelerator program is unique in that we have offered them the opportunity to partner with 10 big financial institutions in the region.”
DIFC’s fintech initiative has the potential to add significantly to its expansion plans. Under the center’s 10-year strategy announced in 2014, it aims to triple the number of regulated financial firms in a decade, with a target set of 1,000 members. At the last estimate in June, that sat at 463 firms regulated by the Dubai Financial Services Authority (DFSA).
Between now and 2024, one could expect to see around 70 new fintech DIFC member firms via the accelerator scheme, assuming the target of 10 per year is met. “Fintech fits in well with the DIFC’s 10-year strategy. The aim is to triple the size of the DIFC by 2024 — in physical space, member firms and assets under management. The new fintech entrants will add to all three of those categories,” Al-Mazrouei said.
Of course, there is nothing to stop fintech firms applying to become immediate full members of the DIFC; they could also apply for a special innovation testing license, which gives them one-year membership of the DIFC on competitive terms, under regulation of the DFSA. If after one year they and the DIFC agree it is beneficial, they can move to full DIFC membership, Al-Mazrouei said.
Al-Mazrouei is a prime example of the new generation of Emirati women who are forging an executive path in the higher echelons of UAE business life. Her background seems to make her perfectly suited for the Hive job.
After education in the UAE and a degree in business information technology, she graduated from the Harvard Business School’s advanced management program in the US, and then came back to work in Dubai in IT-related posts for National Bonds, and for Dubai Holding, the government-owned conglomerate. At the DIFC, she spent time as the head of marketing and communications at the center, in addition to IT roles.
“I have experience in IT and in marketing, so it comes together well in this new role. I’m an engineer by background, so I understand technology. The combination works really well in the fintech space. Plus I have experience of international marketing and how it supports development,” Al-Mazrouei said.
Of the current elite global fintech hubs — New York, London and Singapore — Al-Mazrouei believes the UK capital is the one Dubai must seek to emulate. “I think we learned most from London, which I see as the center of global fintech. It’s the biggest and most innovative,” she said.
Dubai financial center’s Hive creates buzz in regional fintech market
Dubai financial center’s Hive creates buzz in regional fintech market
‘Get in the queue now, win the game’ — why fusion energy could solve global energy dilemma
DAVOS: Fusion energy is closer to commercial reality than many assume, and countries in the Gulf could be among those best positioned to benefit if they move early, executives at Commonwealth Fusion Systems told Arab News in Davos.
Speaking at the World Economic Forum, Rick Needham, chief commercial officer at CFS, said that the company was on track to demonstrate net energy gain from fusion within the next two years. “We are building a demonstration device right now outside of Boston,” he said.
“That’s expected to turn on in 2027 and hit net energy gain, producing more energy out of the reaction than goes in,” he added.
“If you’ve ever played the video game SimCity, fusion is the last card you play,” Needham said.
“You build coal, oil and gas, and then there’s a fusion power plant. Once you get fusion, the game is essentially won.
“From a fuel perspective, fusion is effectively a limitless energy source, the fuel comes from water, it’s abundant, and it’s available everywhere, which fundamentally changes the energy equation.”
For Middle Eastern economies investing heavily in artificial intelligence, data centres and next-generation infrastructure, Needham argues that fusion represents not just a clean energy source, but a competitive advantage.
“If you want to be a leader in AI, you have to be a leader in energy,” he said. “Power has become the binding constraint.”
And CFS believes commercial fusion is now within reach.
The company is currently building SPARC, the demonstration fusion device outside Boston. It will generate about 100 megawatts of thermal power, paving the way for CFS’s first commercial power plant, ARC, a 400-megawatt net facility planned in Virginia through a partnership with Dominion Energy.
Google has already committed to purchase half of ARC’s output. Construction is expected to begin around 2028, with power coming online in the early 2030s, they explained to Arab News.
Jennifer Ganten, chief global affairs officer at CFS, said that fusion’s shift from theory to execution is what sets this moment apart.
“We use a magnetic confinement approach known as a tokamak, which has been studied and built for decades,” she said. “What hasn’t existed before is a design optimised for commercial power.”
She continued: “For us, this is no longer a physics challenge, it’s an engineering and systems integration challenge, and those are problems we know how to solve.”
That distinction, she said, is why fusion has started appearing more prominently on policy and investment agendas, including in the Middle East.
“Energy demand is rising everywhere, and the push for AI leadership is accelerating that,” Ganten said. “Fusion has begun to feature not just at energy conferences, but at forums like COP in Dubai and here at Davos.”
A critical factor in determining where fusion plants are ultimately built will be regulation and how quickly governments move to put frameworks in place.
“Fusion should not be regulated like nuclear fission,” Ganten said. “There’s no chain reaction, no risk of meltdown, and no long-lived radioactive waste.”
She pointed to the UK and US, which regulate fusion similarly to particle accelerators, as early movers. Germany, Canada and Japan have since followed.
“Getting regulation right makes a country an attractive market for deployment,” she said. “It lowers cost, reduces timelines and signals seriousness.”
Needham said that the difference is material. “Instead of five to ten years and hundreds of millions of dollars for licensing, fusion projects can move in roughly 12 to 18 months,” he said. “That changes everything.”
For Gulf states accustomed to long-term energy planning, both executives stressed that waiting for fusion to be fully proven could mean missing out on early deployment.
“If you wait until fusion is obvious, you’re at the back of the queue,” Needham said.
“The countries that start preparing now, with regulation, grid planning, supply chains, they will be at the front.”
Ganten agreed. “Once fusion is demonstrated at scale, demand will spike very quickly,” she said. “The jurisdictions that created the right conditions early will secure the first plants.”
Beyond decarbonization, fusion offers energy security, a powerful proposition for governments seeking resilience in a volatile geopolitical climate.
“Fusion breaks the link between energy and fragile global fuel supply chains,” Needham said.
For Middle Eastern economies balancing growth, sustainability and technological ambition, fusion may not just be a future option, but a strategic decision about when to get in line.
As Needham puts it, getting fusion can “win you the game.”
