BrazilOliver Wyman proposes Dubai innovation hub to aid regional financial inclusion
The global management consulting firm Oliver Wyamn has forwarded the UAE as the ideal centre for an innovation hub focused on enhancing regional financial inclusion.
In a report released in conjunction with the Dubai International Financial Centre (DIFC), global management consultancy Oliver Wyman has pointed to the Middle East, Africa and South Asian (MEASA) region’s highly underbanked population and promoted Dubai as perfectly positioned to facilitate greater financial inclusion through digital innovation.
According to figures from 2016, nearly half of the world’s financially excluded or underserved individuals are concentrated in the MEASA region, with an average of 48 percent of the working adult population holding a financial account compared the average figure of 69 percent. Three quarters of the world’s bottom 20 countries for account ownership are also found in the region.
As a breakdown, the number of Middle East and North African account holders in 2017 above the age of 15 stood at 54 percent according to Oliver Wyman data, with 62 percent of men holding accounts and 45 percent of women. For North America and Western Europe, these numbers were closer 95 percent, almost evenly shared by gender.
For South Asia and Sub-Saharan Africa, the disparity in banking participation is even greater, with only 48 percent in South Asia (split 55 percent and 40 percent as to the male and female populations) and just 41 percent (47 percent / 37 percent) in lower Africa owning an account or considered to be financially included.
“There is an urgent need for reforms to overcome this disparity,” said Greg Rung, Oliver Wyman Partner, Financial Services. “This however requires the collaboration of a broad array of stakeholders from across the financial, technology and government sectors. Given their rapid evolution, digital technologies are a critical catalyst in achieving financial inclusion.”
The push for advancement of financial inclusion, the consulting firm says, is currently witnessing renewed global momentum, with some US$37 billion in funds estimated to have been received in 2016 from public and private sources in an effort to address the issue. Yet, according to the firm, these initiatives have been hampered by a scattershot approach.
“While many existing efforts are underway across MEASA, these are often heavily fragmented and make a large-scale advancement challenging,” the firm states in the report, calling for the establishment of a “regional innovation hub dedicated to the development and distribution of scalable digital financial solutions.” And, according to its authors, the most suited location for that hub is Dubai.
“Dubai is ideally positioned to serve as the beating heart of such a hub given its geo-strategic location as international lay over destination for global business partners; and strong existing recognition as a global and regional financial centre as well as the government’s commitment to financial introduction,” the report argues, with Hunt noting that the proposed hub “will support the centralisation of efforts and identify opportunities for scalable solutions.”
Arif Amiri, CEO of the DIFC Authority, added; “With an approximate population of 3 billion, the MEASA region sits on a large pool of opportunities that are still untapped for the lack of financial access… The world-class infrastructure and innovation ecosystem that Dubai has built, and continues to enhance, provide an enabling environment for technology and disruptive businesses to create more inclusive solutions and services for the entire region.”
Recently, the DIFC signed a collaboration agreement with global consulting firm Accenture to support greater digital innovation in the financial sector through the ongoing development of the DIFC’s fintech accelerator FinTech Hive. Meanwhile, fellow Emirate’s Abu Dhabi Global Market has signed a strategic cooperation deal with the Hong Kong Monetary Authority to jointly promote fintech innovation across their respective jurisdictions.
