FinTech COMPANIEs place trust in UAE’s financial and legal infrastructure, but Covid-19 remains A SIGNIFICANT risk factor – Várri Consultancy’s “UAE FinTech survey 2021” results revealed
- Primary risk drivers are supply chain disruptions, liquidity risk, IT and cyber risk Liquidity risk and operational risk are expected to increase in 2012177% of FinTech respondents plan to implement changes totheir business modelswithin 12 months
DUBAI, UAE, 23rd Match 2021:Várri Consultancy,a specialised Dubai-based consultancy focused on strategy and risk assessment, announced today the findings of its first comprehensive “UAE FinTech survey 2021”, which surveyed over a hundred leading companies within the FinTech sector to assess the levels of risks.
The UAE is leading the FinTech market in the Middle East and North Africa region, which is estimated to top USD 2.5 billion by 2022.The study revealed that as the UAE FinTech industry continues to grow, over 60% of respondents believe that greater risk and uncertainty lie ahead, compared toa year ago. The primary risk drivers include supply chain disruptions, liquidity risk, IT and cyber risk.Underscoring specific threats, more than half of the respondents said their company had been the subject of a cyber-attack in the last year, which in most instances resultedin financial liability and direct revenue loss.
Neither country risk nor inflation was perceived as having any material impact, reflecting the level of trust FinTech companies place in the UAE’s financial and legal infrastructure. 51% of respondents stated that their companies are exposed to more earningsuncertainty.A year into the pandemic,Covid-19remains one of the main risks to their companies achieving their strategic objectives in 2021. Additionally, almost half of the respondents also believe that liquidity risk and operational risk will increase in the coming year, compared to a quarter who believe those risks will reduce.
Commenting on the UAE focused survey outcomes, Johnny Kollin, Founder and Managing Director, Várri Consultancy, said: “The survey results reflect the uncertain times, globally. The FinTech sector has the potential to disrupt existing business models of financial services companies, and it is clear that the professional community recognisesthat it comes with risks.”
“Companies are responding to the current uncertainty by reassessing their business models and strategies. The survey reveals an opportunity for UAE FinTech companies to take the lead in developing innovative solutions and, with the help from relevant subject matter experts, improving and spearheading risk management in the sector,” he added.
The survey further concluded that 77% of the respondents envisage making material changes to their companies’ business models in the next 12 months to better guard against uncertainty and increasing competition, coupled with updated regulations.