The UAE’s financial landscape is evolving rapidly, driven by digital transformation, supportive regulation, and a diverse population with varying financial needs. While major banks continue to dominate retail and corporate banking, a significant opportunity lies in underserved and niche customer segments—groups that traditional banks often overlook or cannot serve efficiently.
Industry experts at the Banking Innovation and Technology Summit, organised by Khaleej Times, highlighted that the fastest-growing digital banks and fintech players in the UAE are those that concentrate on specific, underserved verticals. This focus allows them to develop deep expertise, create tailored products, streamline costs, and scale profitability faster than broad-based competitors.
Why Niche Segments Matter
For digital-first institutions, competing with large incumbents head-on is challenging. Instead, targeting high-potential niches helps these players create value where gaps exist.
Saadaat Yaqub Bajwa, Director and Co-founder of Kamel Pay, shared that their decision to serve blue-collar workers came from identifying a massive unmet need.
“In the UAE’s population of around 10 million, 50% falls into this category,” he explained. “They are underbanked and underserved. It had the biggest potential to expand.”
By focusing on this overlooked segment, Kamel Pay built specialized financial products tailored to blue-collar users. Over time, the company expanded even deeper into the segment:
Microfinance and small-ticket loans
B2B services for employers of foreign workers
New financing solutions and value-added products
This laser-focused specialization helped the company scale meaningfully in a competitive market. As Bajwa noted, “Competition is tough for UAE’s relatively smaller population. Niches become critical.”
Balancing Niche Focus with Broad Capabilities
Not all institutions can remain completely vertical.
Vibhor Mundhada, CEO of Neopay, emphasized that while niches matter, breadth can also be key—especially for large-scale players.
“For merchant acquiring, we must ensure the platform offers every payment method a merchant needs,” he said.
This highlights the strategic balance modern financial players must strike:
deep expertise in a niche, supported by broad, essential services across the customer journey.
Technology as a Scaling Engine
One of the most powerful enablers for niche-focused growth is technology. Many smaller institutions now compete effectively with long-established banks by leveraging automation, AI, and digital-first compliance.
Fazil Badrudeen, Head of Brand and Marketing at Vision Bank, explained:
“In today’s age of AI, cross-manual processes can be automated—from customer due diligence to KYC and transaction monitoring. This lets us scale transactions with a small compliance team without compromising on regulatory requirements.”
Automation enables digital banks to maintain regulatory precision with lower operational costs—crucial for serving low-margin or previously unviable segments.
A Supportive UAE Regulatory Environment
The UAE’s regulatory ecosystem plays a crucial role in enabling fintech and digital banks to innovate confidently.
Mohamed Roushdy, CIO of Reem Finance, commended the UAE for its forward-thinking approach:
He noted that the Central Bank actively supports partnerships, sponsorships, licensing, and controlled innovation—creating a structured and balanced environment for financial institutions transitioning into full-scale banking.
This regulatory openness empowers niche-focused institutions to enter the market safely while meeting all compliance requirements.
The Path Forward: Growth Through Specialization
As the UAE continues its digital transformation journey, the next wave of growth for banks may come from:
Serving underbanked or overlooked demographics
Providing specialized financial solutions for SMEs, gig workers, or specific professions
Leveraging AI and automation to reduce costs and increase compliance efficiency
Forming partnerships that expand capabilities without diluting focus
In a dynamic market with intense competition, niche depth often outperforms broad but shallow presence.
