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.”

<img height="800" width="1200" src="" alt="">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.

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“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.”

<img height="785" width="1200" src="" alt="">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 on fossil fuel. At the heart of this strategy is, in Bahrain’s case, the financial services sector, which already contributes 16.7 percent to the kingdom’s GDP – second only to petrochemicals and the most of any non-oil vertical. “We want FinTech Bay to be a catalyst to move the country towards digitisation and an innovation and knowledge-driven economy. It’s important,” Saad notes. “This [FinTech Bay] could help propel the country.”

As a sign of Bahrain’s potential to be a fintech hub far more important than its size would suggest, Saad proudly points to a more than 300-page report from Startup Genome that listed Bahrain as the only “fintech ecosystem” to watch in the entire Middle East and North Africa (MENA)  region. Clearly proud, Saad says he believes the report projected “a positive image of the country that it is welcoming innovation, open to ideas, and hopefully is a place where people can experiment, fail and try again.”

There is talent, but there still needs to be work done in terms of talent development”

The key to successfully accomplishing the kingdom’s fintech goals, Saad says, is its human capital, which he believes has made significant strides in recent years as more and more Bahrainis – particularly young people – become familiarised with the technologies and principles needed by the tech-driven, knowledge economy of which fintech plays a part.

“Having said that, I think that more needs to be done. It’s still early days when it comes to developing specific skill sets, like cybersecurity and blockchain,” he remarks. “This could be [remedied] through targeted courses or university courses. There is talent, but there still needs to be work done in terms of talent development and getting people upskilled to have the skills needed to be competitive in this new world.”

<img height="800" width="1200" src="" alt="">Khalid Saad, CEO of Bahrain FinTech Bay

A young fintech entrepreneur’s take

Speaking to young Bahrainis, it is hard not to detect a remarkable enthusiasm for entrepreneurship and technology, particularly in the promising fintech sector. Among those that have decided to enter the field is Fatema Ebrahim, a New York-educated Bahraini who says she decided to “take the plunge” and establish Valopay, an online platform that is designed to facilitate payments between buyers and sellers within the Instagram marketplace.

“I’m not from a finance background at all, but I decided to really invest my time in getting to know the fintech space. I knew Bahrain, being a financial hub, would take that direction,” she says.

There are a lot of government and private entities that dedicate time to listen”

Although Valopay is not – at the moment – a partner in FinTech Bay and is currently self-funded, Ebrahim notes that the project is “amazing” for those in the fintech sector, whether or not they are partners in it or not.

“They have mentorship sessions, and the right kind of mentors in place at FinTech Bay. Some of their [members] have partnerships with universities, so in terms of education and fintech’s evolving trends, there are a lot of awareness sessions.”

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This education, she notes, is part of Bahrain’s larger efforts to help facilitate, encourage and accelerate start-ups.

“That’s what I like about Bahrain. There are even accelerators for food trucks, or incubators for fintech. You could even get [subsidised] office space and funds for some events. There are a lot of government and private entities that dedicate time to listen to pitches and ideas and go from there.”

<img height="550" width="800" src="" alt="">Valopay simplifies deals for SMEs online

FinTech Bay’s long-term aims

Looking to the future, Saad notes that it is hard to give predictions about where FinTech Bay will be in five years – other than a larger premises – but says he is sure what he wants FinTech Bay to represent.

“We want to be the reference point for someone thinking about fintech. If someone wants to plug in, get knowledge and data, we can be that,” he says.

“But we’ll also be happy if Bahrain moves along this innovation journey and becomes a leader in fintech, and people say we played a significant role. If people move to a stage where they are innovative and digitally-savvy, we’d consider that a success.”