How Bahrain is taking on the fintech challenge

June 10, 2018

Bahrain's FinTech Bay hopes to be a catalyst for change in the digitally-savvy kingdom


For decades, tiny Bahrain – population 1.5 million – has punched above its weight in the banking and financial services industry, rivalled only relatively recently in the Gulf by regional powerhouse Dubai. But rather than rest on its laurels, the small Gulf kingdom is striving to be on the cutting edge of the transformations being brought on by financial technology – more popularly known as fintech. Nowhere is this more evident than in Bahrain FinTech Bay.


Launched in February 2018, Bahrain FinTech Bay – housed in the ultra-modern and undeniably striking Arcapita Building – has a threefold aim: accelerating local early-stage fintech companies to their next stage of development; attracting foreign growth-stage fintech companies to establish regional offices in Bahrain and facilitate their expansion in the GCC; and creating a physical hub for co-creation and the sharing of resources and ideas.


“I think it’s been a pretty good start,” says FinTech Bay’s youthful, British-educated CEO, Khalid Saad. “It’s been only just a few months since launch, but what we’ve started to see is that there is a much bigger engagement with stakeholders in the ecosystem. There are a lot of digitalisation and fintech-related initiatives that have kicked off already.”


"The main criteria to be physically based in FinTech Bay is that you have to be fintech related, so you don’t dilute the value proposition”


As founding partners, FinTech Bay boasts the likes of local powerhouses Investcorp, Batelco and the National Bank of Bahrain (NBB), as well as promising regional start-ups such as Saudi payment processing firm PayTabs and even global behemoths such as Cisco and Microsoft.


“Already companies from abroad have moved in to be based in FinTech Bay, and we’re looking to increase that. We’ve been selective about who comes in, but all in all it’s been good,” Saad notes. “The most important thing is that this is a model that requires an ethos and a mental shift in terms of complete alignment on fintech between regulators, government agencies and the private sector. We’re looking to make FinTech Bay mean something to everybody in a different way.”


Bahrain FinTech Bay aims to lead the way in the Gulf region’s fintech ecosystem


Open to all


One of FinTech Bay’s main lures for companies is that it is “agnostic” when it comes to who can call the facility home, even if they strive to remain selective.


“The main criteria to be physically based in FinTech Bay is that you have to be fintech related, so you don’t dilute the value proposition,” he says. “That could be a local company or not. We already have local entrepreneurs sitting with us, or it could be a regional or international company that plays within the space. We haven’t set any hard quotas… we’re open to all and treat them equally. There is no exclusivity, no preferential treatment.”


That isn’t to say that creating a place such as FinTech Bay is without its own set of challenges. For one, Saad says that FinTech Bay had to overcome a natural tendency among businesses to operate in silos, or – because of their inherently competitive nature – are not used to talking to one another or collaborating in any way as they seek to scale.



“There is always that edge that everyone [believes] they need to maintain over the others, and that is fully understandable,” he says. “But there are a lot of common friction points or pain points where you need complete alignment between different stakeholders, whether its policy makers, the ones setting the regulations or private sector institutions. It’s not an easy concept.”


In Saad’s view, however, in just a few months FinTech Bay’s partners have begun to see the benefit of the approach that he advocates. “We’re starting to see that there is a lot of cross-fertilisation of ideas. People talk about ‘regulatory sandboxes’, but there is also a need for an industry sandbox in which people come together and put their hands together, or certain categories of players, like banks, coming together and working on pilots or solutions that will help everybody, including them,” he notes. “It’s a tough undertaking but it has to be done for the ecosystem to meaningfully develop.”


Bahrain markets itself as a place where local regional, international fintech institutions could collaborate


Big ambitions


For Bahrain, the creation of FinTech Bay comes at a vital time. The country, like most of its neighbours in the Arabian Gulf, is pushing an ambitious diversification agenda to get away from a long-standing dependence o