In recent years, the UAE has worked hard to ensure it is an attractive place to launch and grow new businesses and those efforts are certainly paying dividends.
Dubai is home to 90% of all the country’s scale-up startups. 87% of all funding rounds for UAE-based businesses are aimed at startups headquartered in the city (EconomicTimes). At the same time, Abu Dhabi is the fastest-growing emerging startup ecosystem in the MENA region, achieving 28% compound annual growth between 2019 and 2023 (MediaOffice).
While the number of new startups in the UAE is growing, so is the number of successful growth cases. Across the MENA region, the number of startup exits has almost tripled over the last eight years, from 15 in 2015 to 43 in 2023. In a sign that the country’s startup scene is reaching maturity, UAE-based startups account for more than 55% of the 2023 exits (AGBI).
Understanding the UAE’s startup success
Central to this success are the UAE’s free zones - economic hubs where foreign investors and entrepreneurs can retain 100% ownership of companies and often benefit from tax exemptions. Generous visa policies complement the free zone strategy, creating a vibrant business environment that encourages innovation.
It’s not all foreign investment, though. The UAE and MENA region is home to a comparatively young population, with 55% of residents aged 30 or under, compared to 36% in OECD nations (OECD). This contributes to a thriving community of young entrepreneurs and a sizable digital-native consumer base hungry for new technologies. Finally, regional financial institutions recognize the growth potential and are keen to continue driving and profiting from the UAE’s startup boom.
Onboarding in financial services remains an issue
Despite the generally friendly business environment, startups in the UAE still face several challenges. Most notably, navigating the intricacies of the country’s banking system and gaining access to financial services. This is understandable. To maintain the current high level of trust individuals and organizations have in regional financial institutions, comprehensive KYC, KYB, and onboarding processes are required
However, in the UAE, these processes are still often manual and involve large amounts of paperwork. Consequently, they are slow, labor intensive, and susceptible to human error. Often, startups are awarded their provisional business license to operate in the UAE but have to wait several months for a functional bank account because the KYB, onboarding, and verification processes take too long.
This is challenging for the startup because they cannot conduct their business fluidly. It is a problem for banks and financial institutions because they are offering a subpar customer experience and they risk losing customers to other, newer organizations that can onboard quickly. And it is not ideal for the free zones, which pride themselves on eliminating obstacles to commerce.
EDC solutions enhance documentation and speed up onboarding
Fortunately, startups and established tech businesses are also developing effective solutions to this problem. New partnerships between banking institutions and organizations like EDC are helping to smooth out this process and speed up access to financial services for new startups in the UAE.
EDC achieves this by equipping banks, financial institutions and other entrepreneurial organizations with innovative electronic KYC and KYB solutions that utilize ICP services and trusted and accredited authentication modules to automatically verify trade licenses, Emirates IDs, and other important documentation in real-time.
This enables organizations to offer a first-rate customer experience to residents, non-resident individuals and non-resident corporates by automating documentation verification, minimizing paperwork, and implementing workflow safeguards that ensure compliance and prevent human error. The EDC solution empowers financial institutions to eliminate the barriers that have previously prevented startups from gaining easy access to financial services. The result is a more satisfactory customer experience and a competitive advantage over other service providers.
Most importantly, EDC solutions guarantee compliance with all KYC and KYB regulations, offering financial organizations a trusted means of improving onboarding. The ability to provide startups with bank accounts and other critical financial services promptly without compromising customer trust is key to the continued success of the UAE’s startup ecosystem.
Learn more about EDC onboarding and verification solutions
EDC verification solutions contribute to faster onboarding, smoother processing, guaranteed compliance, and happier customers. In an increasingly competitive marketplace, this ensures financial services providers stand out and can distinguish themselves from competitors.
To learn more about how EDC solutions enhance your organization’s ability to offer accessible financial services to startups, speak to one of our expert advisors today.
