Growing Young MEASA Population Increasing Demand For Digitally Delivered Financial Services

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A growing young population across the Middle East, Africa and South Asia (MEASA) is increasing demand for digitally delivered financial services, a new report from research the Economist Intelligence Unit (EIU) has revealed.

The Unit states that with a combined population of over 3 billion, deepening mobile connectivity, and growing prominence as a trade and investment hub, the Middle East, Africa and South Asia will be a source of both demand and supply for more and better financial services.

The report, titled ‘The Next Frontier: The future of finance in the Middle East, Africa and South Asia’, was sponsored by Dubai International Financial Centre, The Economist Intelligence Unit (EIU). It explores the forces shaping the future of financial services, focusing on market, technology and policy enablers.

“This untapped potential presents an attractive opportunity for companies providing financial services—both traditional and non-traditional players,” states the report.

It indicates that as trade and investment increase in the region, there will also be a growing market for wholesale banking and capital markets.

Khaled Al-Aboodi, CEO of the Islamic Corporation for the Development of the Private Sector, Kyri Andreou, Co-founder of crowdfunding platform ATA Plus, Simon Bell, Global Lead for SME finance at the World Bank and Ronit Ghose, Global Sector Head for Banks at Citi Research, among others concluded in the report that for companies that move quickly, this is a multi-billion-dollar opportunity to bank on the future of a diverse region.

As such, experts, including Elain Lockman, Co-founder of ATA Plus, Elizabeth Rossiello, CEO of BitPesa and Helios Partner, Nimit Shah, among others say that governments and regulators have a crucial mandate to drive financial innovation.

“Governments and regulators must ensure that regulation keeps pace with advances in technology in the financial sector. There are examples across MEASA of legislation that enables a wider array of providers to enter financial services, from postal systems and telecoms companies to e-commerce platforms,” said the experts.

They explain that the future of finance in MEASA will not be determined solely by technology. The rise in equity crowdfunding platforms and lower-cost portfolio investment products is unleashing new capital for entrepreneurs and businesses, and is giving middle and lower-middle-income citizens the ability to become investors. Growth in the provision of credit, increasing interest in private equity and a rise in venture capital are also helping to drive growth in the middle market.

“Governments and regulators have a vital role to play,” said Melanie Noronha, editor of the report.

“They can prime the market by using better services and technologies themselves, or they can set it back by using outdated systems and approaches. They must balance innovation with prudence, protecting consumers and stability while encouraging promising new ideas to help increase the efficiency of the financial system,” she added.

The Economist Intelligence Unit is the world leader in global business intelligence. It is the business-to-business arm of The Economist Group, which publishes The Economist newspaper.

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