The world is rapidly moving toward digitization across various economic sectors, with the financial sector at the forefront of these transformations. The Kingdom of Bahrain is one of the leading countries in the region in adopting fintech, successfully creating an innovation-friendly environment and attracting investments in this sector. According to local reports, the number of fintech companies in Bahrain reached 115 by 2024, growing by more than 100% over the past four years, reflecting significant expansion in the industry.

A key driver of Bahrain’s success as a regional fintech hub has been its regulatory environment. The Central Bank of Bahrain (CBB) has adopted a flexible and innovation-friendly regulatory framework, encouraging both local and international companies to establish operations in the Kingdom.

One of the most notable initiatives supporting fintech growth was the launch of the Regulatory Sandbox in 2017, which allowed startups to test innovative solutions in a controlled environment without full compliance with traditional financial regulations. This initiative has enabled the development of cutting-edge solutions in areas such as digital payments, blockchain technology, and open banking.

Beyond regulatory support, partnerships between traditional financial institutions and fintech firms have fueled sector growth. Collaboration between banks and startups has fostered a symbiotic relationship that supports innovation while maintaining financial stability. Initiatives such as the open banking framework and cloud computing regulations have further enhanced Bahrain’s attractiveness as an investment destination for fintech.

As Bahrain’s fintech sector continues to evolve, significant opportunities arise for exporting Bahraini expertise and solutions to global markets. Bahrain excels in areas such as digital Islamic finance, electronic payments, and blockchain technologies, which hold substantial value in both emerging and developed markets. However, Bahraini companies face challenges in international expansion, particularly in navigating complex regulatory and legal frameworks in foreign markets.

To successfully export local fintech expertise globally, two key factors must be prioritized: institutional support for fintech companies and in-depth studies on the sector.

Institutional support should address the challenges fintech firms encounter when dealing with complex regulatory and legal environments abroad. Providing targeted assistance, such as legal consultancy services and market entry programs, would be crucial in helping Bahraini fintech firms expand internationally, especially for small and medium-sized enterprises (SMEs).

Additionally, research and studies play a vital role in providing a comprehensive understanding of regulatory environments, market needs, and global competition. Studies can highlight the various challenges fintech companies face, such as regulatory risks, intense competition, and bureaucratic barriers.

Moreover, research can focus on regulatory differences between Bahrain and target markets. Each country has its own legal framework, which may significantly differ from Bahrain’s system.

In conclusion, Bahrain’s fintech sector represents a successful model for innovation and economic development, with a supportive regulatory environment and advanced infrastructure offering promising opportunities for local growth and global expansion.

However, strengthening Bahrain’s fintech exports requires robust institutional support and specialized research to understand international markets. This will enable local companies to overcome challenges and solidify Bahrain’s position as a leading regional and global fintech hub.

Note: This article has been automatically translated, the full article is available in Arabic.

Source: Akhbar Al Khaleej