5G, fintech and mega-projects: What 2021 will mean for tech in the Middle East

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The MENA region is in the middle of a digital transformation, which 2020 and COVID-19 has only accelerated. I asked five experts to share the tech trends they see influencing the Middle East and North Africa (MENA) this year, with digital payments, greater investment in AI and mobile, coupled with the need for greater focus on cybersecurity, all getting a mention.

A look into big projects ahead

Innovation

Among the things to look out for on the Middle East tech scene in 2021 is the Expo 2020 event, which is due to take place in Dubai in the UAE for six months starting from October says Matthew Reed, practice leader, Middle East and Africa & Asia Pacific, at Omdia.

“The event, which was postponed last year due to the COVID-19 pandemic but will still be known as Expo 2020, is expected to showcase advanced technologies and applications including autonomous vehicles, smart city services, and space exploration, with the latter based on the UAE’s launch of an unmanned spacecraft to Mars in July 2020.

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“Saudi Arabia also has futuristic plans and in early January it unveiled the outlines of a major new city project, The Line, a 170-kilometre urban development that will be entirely powered by renewable energy and will be “hyper-connected though a digital framework incorporating artificial intelligence and robotics, according to the launch website.

“The Saudi authorities are also increasingly keen to encourage investment and growth in the country’s non-oil business sector, and that is likely to accelerate efforts to upgrade connectivity and technology services for enterprises over the year ahead.”

FinTech will be transformational

The fintech landscape in MENA is rapidly evolving from a focus on digital payments to expanding access to finance, both consumer and SME lending, says Ayman Ismail, Jameel chair of entrepreneurship, The American University in Cairo.

“The past three years were mostly about establishing infrastructure for digital payments. We saw numerous startups offering digital payments services through mobile wallets, credit and debit cards, acceptance methods for merchants both online and at retailers. Banks also expanded their online presence, acceptance offerings, and started building digital bank subsidiaries. Governments promoted digital payments for their services, payroll and social support. They also introduced numerous regulations to support the sector enabling data protections, electronic know-your-client (eKYC) and interoperability.

“In Egypt, the number of mobile wallets has exceeded 15 million, with double-digit month-over-month growth, and the number of point-of-sale (POS) machines more than doubled over the past year, allowing more merchants to accept digital payments. COVID-19 acted as a catalyst, accelerating the adoption of digital payments among consumers, businesses and governments alike.

“Having established this payment infrastructure, the next big trend in the region is in lending, both consumer lending and SME lending.

“Numerous startups are introducing solutions for consumer lending, ranging from payday loans, app-enabled nano-loans, to buy-now-pay-later retail solutions. Business lending is also expanding with existing micro-finance companies going digital and new startups introducing supply chain financing in partnership with manufacturers.

“Startups are also introducing enabling technologies such as credit scoring, AI-enabled Arabic language chat bots, and digital onboarding solutions. Markets are visibly thirsty for more credit that is easier to access and technology-enabled.

“Banks, private equity funds, and large investors are looking for these new digital channels to deploy capital and are searching for investments or acquisitions of successful players in this space, even at early-stage. Regulators are responding by updating many of the regulations for non-banking financial services and launching new licensing opportunities.

“This space is going to grow substantially in 2021. Digital payments and lending are at the core of this transformation and likely to grow exponentially over the next three years.”

Mobile continues to transform all walks of life

The COVID-19 pandemic demonstrated how fundamental digital connectivity is to societies and economies everywhere. With social restrictions put in place to curb the spread of the virus, many everyday activities, including work, learning, shopping and social interactions, have moved online, says Jawad J Abbassi, head of Middle East and North Africa at GSMA.

“A recent GSMA report underlines the role of robust broadband networks in connecting students and teachers for remote Education. In Saudi Arabia, 55% of the population purchased groceries online in April 2020, compared to just 6% before the outbreak.

“Governments also rely on connectivity to disseminate vital information in real time, thus enhancing efforts to fight the disease. In Sudan, Zain has sent over 60 million SMSs to communicate advice provided by the Ministry of Health. Moreover, some governments have introduced sound policies to enhance mobile broadband services, including providing additional spectrum to operators and allowing tech neutrality.

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“This trend will continue in 2021, helped by operators’ continued investment in high speed networks and rising smartphone adoption.

“Today, nearly 300 million people in MENA (47% of the population) connect to the internet via a mobile network – predominantly 4G, which now accounts for over 40% of mobile connections.

“However, 5G adoption will gain momentum this year and beyond, as people and businesses switch to enhanced connectivity solutions to support new ways of working and living in a post-COVID era. There are now 15 commercial 5G networks in seven countries in the region, with more expected in the coming years.”

The pandemic and events of 2020 will have a long-term impact

We can expect the Middle East and North Africa’s technology ecosystems in 2021 to be shaped by some of the continuing themes and unexpected changes brought by 2020, says Carrington Malin, entrepreneur, marketer and writer focused on emerging technologies

“Last year saw Saudi Arabia and the UAE continue to develop, invest in and promote tech ecosystems, in particular those that support open data and the adoption of artificial intelligence.

“Saudi stands to reap the rewards of the groundwork done by the Saudi Data and Artificial Intelligence Authority (SDAIA). During its first year, the authority merged 83 government data centres creating ‘DEEM’, the largest government data cloud in the region. This combined with its far-reaching National Strategy for Data & AI announced in October, provides the impetus for a broad range of public and private data, innovation, technology and tech funding initiatives for 2021.

“With its recent successes in making government data more open, its heavy investment in smart city technologies and increased focus on growing its startup ecosystems, the UAE looks set to remain the region’s tech hub during 2021.”

It’s time to get cybersecurity ready

This past year has driven more digital business transformation than all the decks and dollars spent on consultants in the previous decade. While that’s exciting news for the digital industry, we should step back and assess what this means for our digital footprint says Racha Ghamlouch, innovation & business adviser, co-curator MENA’s digital digest.

“Vital data about our healthcare, children’s education, business communication, personal information, and all aspects of our lives are now taking place online. Governments have sped up their digitization efforts and enforced digital payments (in Saudi) and the use of a unified tax portal (in Egypt), and introduced telehealth solutions straight through healthcare ministries (UAE). Unless secured, this is a recipe for disaster the size of the ongoing Solarwinds saga in the U.S.

“According to IBM’s annual Cost of Data Breach Report 2020, the average cost of a data breach in the Middle East is the second-highest globally at $6.52M! We are also the slowest in the world to identify a data breach, 269 days.

“For 2021, I believe it’s time and predict it’s necessary that startups and individuals get cyber-clean.”