The UAE’s embedded finance sector is experiencing rapid growth, driven by government support, technological advancements, and increasing consumer demand. A recent report predicts the industry will reach $1.56 billion in 2024, growing at 16.1% annually. The sector is expected to maintain strong growth, with a projected CAGR of 28.6% from 2024 to 2029, potentially reaching $550 billion by 2029.
Key factors fueling this growth include government initiatives like the Future and Dubai International Financial Centre (DIFC), which create a favorable regulatory environment for fintech innovation. Strategic partnerships, such as Al Etihad Payments’ collaboration with Core42 to implement Open Finance, are also driving progress in the sector.
The embedded finance market encompasses various segments, including lending, insurance, payments, and wealth and asset-based finance. Each segment is seeing significant growth across multiple industries, from retail and consumer goods to travel and hospitality.
Notable developments include the acquisition of UAE-based embedded finance platform Embedded by German marketing technology firm Mitgo Group, expanding their service offerings and market presence. Additionally, the Open Finance initiative by Al Etihad Payments and Core42 promises to enhance financial services integration and accessibility.
The UAE government’s supportive measures and regulatory modifications are crucial for the sector’s growth, aligning with broader economic strategies to enhance digital adoption and consumer convenience. This comprehensive growth and supportive ecosystem position the UAE as a leader in financial technology innovation and integration.
Government Support Drives Innovation
The UAE government’s proactive approach in fostering fintech innovation has been instrumental in the embedded finance sector’s growth. Initiatives like the Future and DIFC create a conducive environment for experimentation and development, attracting both local and international players to the market.
Technological Advancements Reshape Financial Services
Strategic alliances and technological advancements are reshaping the financial services landscape in the UAE. The implementation of Open Finance and other innovative solutions are improving the integration of financial services, making it easier for consumers and businesses to access a wide range of financial products and services.
