Fintech Futures in the Gulf: How the GCC Can Lead the Next Wave

12 Oct 2025

Fintech Futures in the Gulf: How the GCC Can Lead the Next Wave
By Mohamed Alaali, BBK Chief of Strategy and Sustainability

Last week, I had the privilege of participating in a panel discussion titled “Infrastructure and Innovation: Building the Framework of the Future” at Fintech Forward 2025. The session brought together leaders from across the region to explore how technology, regulation, and collaboration are reshaping financial ecosystems.

Here’s a summary of my key reflections and contributions during the discussion — centered around how the Gulf, and Bahrain in particular, can set the pace for fintech integration and infrastructure innovation in the decade ahead.

Over the past decade, fintech has evolved from a niche experiment into the engine of modern finance. Across the Gulf, this transformation has been particularly striking. The GCC fintech market was valued at around USD 169.92 billion in 2023, and projections indicate it could soar to USD 7.85 trillion by 2032 (CAGR ~56.1%) (DataCube Research, 2024).

Globally, the fintech sector is forecast to expand from roughly USD 245 billion today to USD 1.5 trillion by 2030 (BCG & QED Investors, 2023).

Yet scale alone is not enough. The real differentiator will be the strategic choices we make today—choices about standards, governance, and ethics—which will determine whether the Gulf becomes an architect of the next global financial infrastructure or remains a participant in frameworks defined elsewhere.

Learning from the Past

History offers a simple lesson: technological revolutions are rarely won by those who move first, but by those who define the standards. When TCP/IP became the universal language of the internet, when credit-card networks adopted common security protocols, or when ISO 20022 redefined financial messaging, it wasn’t technology alone that triumphed—it was coordination and interoperability.

Fintech stands at a similar crossroads. The future of financial systems depends not only on who can innovate fastest but on who can connect best. The real prize lies in designing the “plumbing” of tomorrow’s financial networks—those invisible layers of interoperability, identity, and trust that allow innovation to scale seamlessly across borders.

The Three Strategic Choices

At the heart of this transformation lie three critical decisions that will shape the Gulf’s fintech future.

First, in cloud infrastructure, the priority is to establish clear standards for interoperability and data security. Without shared data models, consistent privacy rules, and transparent

governance, the region risks building isolated systems that cannot talk to one another. Bahrain’s early adoption of an Open Banking Framework in 2020 (Central Bank of Bahrain, 2020) illustrates how setting technical and operational guidelines can spark innovation. By defining how banks, fintechs, and third parties connect through APIs, Bahrain laid the foundation for a truly collaborative digital ecosystem (Bahrain EDB, 2023).

Second, in blockchain, governance and accountability will determine success. Distributed systems thrive only when participants trust the framework that governs them—who validates transactions, how disputes are resolved, and how upgrades are managed. Clear governance models will decide whether blockchain becomes a core enabler of Gulf trade finance and cross-border payments or remains a series of disconnected pilots (BIS Innovation Hub Project mBridge, 2024).

Third, in artificial intelligence, ethics will shape adoption. AI is transforming everything from lending to fraud detection, but public trust depends on transparency, fairness, and explainability. GCC countries are already advancing “soft regulation,” promoting responsible AI principles while avoiding heavy-handed constraints (UAE National AI Strategy 2031; Saudi Data & AI Authority – SDAIA, 2024). This balance between innovation and accountability will be central to sustainable progress.

The GCC’s Emerging Model

Across the Gulf, the foundation for fintech leadership is already taking shape. In Bahrain, more than 120 fintech firms now operate—double the number since 2018 (ICLG Fintech Report 2024). Bahrain’s electronic payment systems—BenefitPay, Fawri, and EFTS—handled around BD 33 billion (≈ USD 87 billion) in transactions during 2024 (News of Bahrain, 2024).

Regionally, the GCC is investing heavily in shared infrastructure. The AFAQ payment system is linking real-time gross settlement (RTGS) networks across member states (Arab Monetary Fund, 2024), while the BUNA platform is establishing a unified cross-border clearing and settlement mechanism for Arab economies (IMF Fintech Note 2024). These initiatives point to the emergence of a regional “financial backbone” built on interoperability and sovereign control.

Nonetheless, fragmentation persists. Regulatory frameworks differ across jurisdictions, with inconsistent open-banking standards and sandbox rules. Talent mobility remains limited by national licensing constraints, and the absence of a unified GCC digital identity or shared KYC/AML system continues to slow cross-border scaling. Addressing these gaps is essential to unlocking the full potential of regional collaboration.

Why It Matters

The stakes could not be higher. For the Gulf, fintech is more than an industry—it is a strategic driver of economic diversification and competitiveness. It generates high-value, exportable capabilities and fosters inclusion at scale. In Bahrain, nearly 100% of adults have access to a bank account, supported by aggressive digitization and financial-inclusion policies (Tamkeen FinTech Report 2024).

Beyond economics, this is about digital sovereignty. Regional infrastructure ensures that data and privacy remain governed by local values rather than global platforms. It enhances resilience against external shocks and gives GCC nations control over their own financial architecture. Conversely, if global standards solidify under foreign dominance, local fintech innovators risk being relegated to the margins of systems they don’t control.

The Moment of Choice

The coming decade will decide who writes the next chapter of global finance. The GCC’s advantage lies in its agility, forward-looking leadership, and the ability to align regulators and industry around shared goals. Bahrain, the UAE, and Saudi Arabia have all laid solid foundations—open-banking regimes, instant-payment systems like Sarie, and long-term digital-economy strategies.

Now is the moment to integrate these efforts: to create a GCC-wide interoperability framework that allows data, payments, and innovation to move freely across the region. Harmonized regulations, shared sandboxes, and common digital-ID standards could make scaling regional fintechs as seamless as expanding within a single market.

A Vision for the Future

In the years ahead, the architecture of global finance will be redrawn. The Gulf has a unique opportunity not merely to adopt emerging technologies but to define their governance. By prioritizing interoperability, embedding robust governance, and weaving ethical AI into financial infrastructure from the outset, Bahrain and its GCC peers can build something extraordinary: a fast, trusted, and sovereign fintech ecosystem that becomes a global benchmark for inclusion and collaboration.

The question is no longer whether the Gulf will participate in the fintech revolution —

the question is whether it will lead it.

References:

• DataCube Research (2024) – GCC Fintech Market Forecast 2023–2032
• BCG & QED Investors (2023) – Global Fintech 2030 Outlook
• Central Bank of Bahrain (2020) – Open Banking Framework
• Bahrain Economic Development Board (2023) – Leading the Open Banking Revolution
• ICLG (2024) – Fintech Laws and Regulations: Bahrain
• News of Bahrain (2024) – EFTS Transactions Cross BD 33 Billion
• Arab Monetary Fund (2024) – AFAQ Payment System Overview
• IMF (2024) – Arab Regional Payment System (BUNA)
• Tamkeen (2024) – FinTech Sector Skills and Inclusion Report
• UAE AI Strategy 2031 & SDAIA (2024) – AI Ethics and Governance Frameworks