FinTech & Innovation Drive DIFC Growth In 2022

In 2022, Dubai International Financial Centre (DIFC) experienced a remarkable surge in growth, reaffirming its position as the leading international financial hub in the Middle East, Africa, and South Asia (MEASA) region. The number of active registered companies rose by an impressive 20%, from 3,644 in 2021 to 4,377 in 2022, breaking previous records.

For the first time in the Centre’s history, more than 1,000 new companies were registered in DIFC in 2022, with a total of 1,084 new firms added. This unprecedented growth is a significant achievement and aligns with the objectives of the Dubai Economic Agenda D33, which aims to establish Dubai as one of the world’s premier commercial and investment destinations. This accomplishment is a testament to the vision of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai.

DIFC’s remarkable performance was propelled by strategic plans aimed at advancing the scale and depth of value-generating innovation created by its community. This growth demonstrates the Center’s continued commitment to attracting international firms and fostering an environment that encourages innovation and entrepreneurship. With this continued growth, DIFC is well-positioned to maintain its position as a leading international financial center and play a pivotal role in driving the region’s economic development.

Dubai International Financial Centre (DIFC) achieved a significant milestone in 2022 as its combined revenue surpassed AED1 billion for the first time in its history. The Centre recorded a remarkable 18% year-on-year increase in revenue, rising from AED897 million in 2021 to AED1.06 billion in 2022. Additionally, DIFC’s operating profit for 2022 increased by 19%, reaching AED679 million from AED573 million in 2021. These financial achievements reflect the Center’s robust financial situation and sustained growth.

His Highness Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, Deputy Ruler of Dubai; Deputy Prime Minister and Minister of Finance of the UAE; and President of the Dubai International Financial Centre, stated –

“DIFC’s outstanding performance in 2022 is a clear indication of Dubai’s growing influence as a major driver of innovation, entrepreneurship, and next-generation technologies in the financial sector of the Middle East, Africa, and South Asia (MEASA) region. Guided by the vision of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, DIFC has been instrumental in transforming Dubai into a leading global financial hub. The Centre’s ability to keep pace with global economic shifts and the rapid evolution of the world’s financial landscape has been a significant factor in its success, providing a platform for financial companies to explore new opportunities and grow.”

“The 2022 results of the Dubai International Financial Centre (DIFC) highlight the increasing need for a validating ecosystem for global businesses seeking to expand into emerging economies with rapidly expanding financial services markets. With financial technology (fintech) playing an increasingly important role in catalyzing growth across various sectors, the UAE’s ambitious initiatives to drive the future of finance are poised to create vast opportunities and new economic growth not just in the region but across the world.”

The year 2022 proved to be a remarkable year for the Dubai International Financial Centre (DIFC), as it witnessed its best-ever performance in terms of leased commercial space, with a total of 809,000 sq. ft. leased, compared to 349,000 sq. ft. in the previous year. The growth in demand for additional commercial space in DIFC reflects the increasing number of global businesses that are attracted to its supportive ecosystem and its potential to expand into high-growth financial services markets.

DIFC’s stable banking assets booked in 2022 remained at $199 billion, and the Centre arranged an additional $166 billion of lending, which represents a 54 percent increase. DIFC’s portfolio managers invested $164 billion in 2022, compared to $151 billion in the previous year, making it the global hub for emerging market Wealth and Asset Management. In addition, Venture Capital raised increased by 78 percent, reaching $1.2 billion. The insurance sector also demonstrated positive growth with Gross Written Premiums rising to $2.1 billion, up from $1.8 billion in 2021.

The Centre’s continued growth has been driven by its ability to attract and retain top industry players, with 17 of the world’s top 20 banks, 25 of the world’s top 30 systemically crucial global banks, five of the top 10 insurance firms, and five of the top 10 asset managers, as well as numerous major global legal and consulting companies being present in DIFC.

DIFC leads the MEASA region in contributing to the development of the global financial industry by being home to the largest clusters of banking and capital markets, FinTech, insurance, wealth and asset management, and professional services companies in the region. The strong expansion has continued across all sectors, including banking, capital markets, wealth and asset management, and professional services, thereby solidifying DIFC’s position as a major player in the global financial industry.

DIFC witnessed remarkable growth in its FinTech and Innovation sector with an influx of $615 million in 2022. This sector became the fastest growing in DIFC, welcoming 291 new clients, and bringing the total number of FinTech and Innovation firms in the DIFC to 686, ranging from start-ups to global unicorns.

The number of financial and innovation entities operating in DIFC reached 1,369, marking a 22% increase from 2021. The Dubai Financial Services Authority (DFSA) regulated 89 financial service firms in 2022, up from 51 in 2021, making the total number of DFSA-regulated financial entities 590.

The year 2022 saw the addition of several notable firms to DIFC, including ADIB, BIC-BRED, Continental Group International, FinTech unicorn Darwinbox, Jefferies, Habib Bank AG Zurich, Lord Abbett, 1291, Prevensure, Proton, Sculptor Capital Management Hong Kong Limited, 3S Money, United Bank of Africa Group, and Volante.

A competitive, differentiated global financial center
DIFC’s success as a leading global financial center is driving the UAE’s next generation of foreign direct investment (FDI). In 2021, Dubai outperformed other major financial cities like London, Singapore, New York, and Paris in attracting FDI. As a free zone, DIFC has ranked first globally in attracting FDI every year from 2017 to 2021, playing a significant role in attracting 58 FDI projects worth AED926.2 million to the sector.

DIFC’s ability to attract financial institutions, FinTech businesses, and innovation companies from around the world, including high levels of interest from hedge funds seeking new locations to establish, supports sustained economic growth and further differentiates Dubai as a global financial hub. Firms within DIFC manage $445 billion worth of assets, indicating Dubai’s reputation as a secure and preferred investment destination. DFSA and DIFC’s internationally recognized clarity and governance standards have also contributed to attracting some of the world’s most prominent financial companies, including Goldman Sachs, Morgan Stanley, and BlackRock.

Enabling the future of finance
In Q1 2022, DIFC co-hosted the largest Dubai World Insurance Congress with Global Reinsurance, attracting 800 delegates from 51 countries, and highlighting Dubai’s emergence as a top destination for global knowledge exchange in the financial industry.

DIFC has shown its commitment to supporting family businesses and the economy by establishing the first DIFC Family Wealth Centre, expected to draw family businesses and UHNWIs from the region and around the world to Dubai.

DIFC’s ability to attract hedge funds has garnered international attention. Its customized offerings, such as subsidized license fees and quick setup, have led to several hedge funds joining DIFC in 2022, with more expected to follow.

DFSA has expanded its digital assets regime for DIFC clients, now including recognized cryptocurrencies. These regulations will facilitate supervised innovation in a careful, responsible, and transparent manner.

DIFC has recorded its fastest employment growth rate, with employee numbers rising to 36,083, a 22% YoY increase. This demonstrates DIFC’s growing status as a global talent hub for both finance and FinTech. With a highly skilled workforce representing over 160 nationalities, the DIFC community has the highest per-capita contribution to GDP across all economic sectors in Dubai.

A global home for FinTech and Innovation

DIFC continues to solidify its position as a global hub for FinTech and Innovation by hosting FinTech Week, an event that aims to drive the adoption of next-generation technology solutions in the financial services industry. The event covered 10 key themes, including Web 3.0, metaverse, NFTs, crypto, blockchain, payments, embedded finance, open banking, RegTech, and ESG. FinTech Week brought together over 1,000 innovative FinTech pioneers, top investment firms, banks, policymakers, and service providers from around the world to discuss the future drivers of growth in the financial services sector.

DIFC has implemented initiatives to attract top talent and companies to Dubai while supporting the growth of those already located within the Centre. The world’s first Venture Studio Launchpad has been presented with a focus on universal finance and digital asset techniques. This Launchpad offers comprehensive assets to create, test, and found new start-ups, scale-ups, and corporate ventures, revolutionizing the way companies are built. In addition to this, DIFC partnered with the Global Start-up Network to further enhance the relevance of studios to start-ups.

DIFC recently hosted its annual flagship FinTech Hive Investor Day in the metaverse, where global investors could interact with accelerator graduates of DIFC FinTech Hive. This was the first time such an event took place in the metaverse, cementing DIFC’s position as a leading global financial technology accelerator in the MEASA region.

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