Qatar strategically positioning itself as leading fintech hub in Middle East : PwC

Qatar is strategically positioning itself as a leading fintech hub in the Middle East and a pioneer in digital transformation and sustainability within the financial services sector, PwC Middle East said in a report.
The country recognises the potential of fintech and has established initiatives to foster a strong and sustainable fintech ecosystem, PwC said in its latest ‘Qatar banking sector report’.
Qatar's digital transformation is making considerable progress towards achieving its National Vision 2030 of building a digital economy.
Strategic initiatives like the Doha cloud region by Google Cloud and the implementation of OpenAI's GPT technology in the Azure Qatar Cloud are expected to empower Qatari companies with long-term benefits.
However, while embracing emerging technologies, banks must also consider risk mitigation and regulatory policies for successful implementation.
Qatari banks have embraced ESG (environmental, social, and Ggovernance) practices and are adopting sustainability measures.
Leading banks have integrated ESG factors into their strategies and reporting, aligning with global frameworks and supporting green financing and social inclusion.
Despite challenges, banks aim to build a sustainable future through technology and data governance. The government's emphasis on environmental impact during the FIFA World Cup 2022 has led to strategic partnerships for sustainable finance initiatives.
However, widespread ESG implementation is still evolving in the market and climate risk management will still be a challenge for most of the banks.
In the Mena (Middle East and North Africa) region, including Qatar, supervisory efforts focused on core banking activities, with initiatives aimed at customer and data protection, data infrastructure establishment, and promoting ESG practices.
Qatar's regulators took proactive steps to strengthen the financial system and launched initiatives for sustainable finance, green finance, and fintech development.
“We are expecting further execution guidelines to be issued in the digital banking and fintech areas,” PwC noted.
According to the report, Qatari banks have experienced single digit growth of total assets and liabilities over the financial year of 2022 (FY 2022 vs FY 2021).
Growth of aggregated assets accelerated in FY 2022 by 3.6% to QR2.02tn compared to QR1.95tn for FY 2022, and by 3.3% CAGR over the three-year period (FY 2022 vs FY 2020) evidencing that the banking industry in Qatar has been expanding at a fast pace over the past three years.
These observations underscore the importance of effective capital allocation, risk management and responsiveness to market conditions in maintaining profitability and competitive advantage in the banking sector.
Growth of aggregated liabilities accelerated in FY 2022 by 3.5% to QR1.79tn compared to QR1.73tn for FY 2021, and by 3.3% CAGR over the three-year period (FY 2022 vs FY 2020).
On another note, foreign liabilities accounted for 10.4% of the sector’s funding FY 2022 (11.2% FY 2019) and net external debt decreased by almost 8% of Qatar’s forecasted GDP FY 2022.
The report reveals that banks in Qatar have reported gradual growth in balance sheet and financing portfolio. Earnings metrics, including gross income, operating income, and profit before tax demonstrate growth and highlight high adaptability to the changing interest rate environment.
Banks in the country have been continuously developing their digital capabilities by prioritising customer-centric approaches and digital innovation, according to the report.
Developing new digital products, embracing an open banking mindset and establishing strategic partnerships with fintech companies, guided by complementary regulations, are all factors helping to strengthen their positions.
Furthermore, the Qatari government's emphasis on environmental impact during the FIFA World Cup 2022 has led to strategic partnerships for sustainable finance initiatives.
Therefore, leading Qatari banks are also integrating ESG factors into their strategies and reporting, aligning with global frameworks and supporting green financing and social inclusion.
Ahmed al-Kiswani, Qatar Financial Services Sector leader, PwC Middle East commented, “Qatar is strategically positioning itself as a leading fintech hub in the Middle East and a pioneer in digital transformation and sustainability within the financial services sector. We remain confident that the financial sector in Qatar is well placed to adapt to a changing financial environment and continue to grow.”