Tehran to Become Mideast Fintech Hub

The exponential growth of fintech startups in Iran, along with financial and technical services provided by various domestic entities, has placed Iran on the path to become a regional fintech hub.

The target is well within reach, as the Central Bank of Iran, banks, the government and universities are taking steps to help realize it. Innovators are also proving their capabilities, at least in keeping up with global trends.

Iran’s 2025 vision projects Iran as the regional hub for financial and banking services. The CBI has planned the development of a  strong future for the banking system in its “2021 Roadmap”.

The roadmap is set to define an appropriate role for fintech companies in the Iranian banking system, including a separate regulatory body for monitoring and supporting innovative services.

Lenders and authorized payment companies are more optimistic about the future of fintech sector in Iran. 

“Tehran will be Middle East’s hub for fintechs by 2020,” claimed Mostafa Taqipour , a senior official at Fanap ICT, Bank Pasargad Iran’s affiliate.

Elaborating on the upcoming Fintech Festival sponsored by BPI, he said, “We are not merely organizing the event to give lip service to our support, but we have plans to commercialize noteworthy innovations.”

 Multilateral Support 

BPI will also hold the Second Fintech Trig-Up during the festival on March 8-10, wherein 45 experts will help 10-15 startups develop their ideas.

“Last year, we awarded three startups … [But only] one of the participating startups managed to meet the conditions and enter the market,” Fanap’s website quoted him as saying on Sunday.

Core-banking, business intelligence, data mining, customer loyalty and digital currencies are among prioritized areas of the event.

Fintech Festival is not the only fintech event in Iran, as several institutions and bodies have held or planned similar affairs in recent months. 

Bank Ansar and Tosan Company, specialized in banking solutions, last week hosted 25 startups, giving them 5 minutes each to present their ideas and take part in Tosan Innovation Challenge, Way2pay.ir reported.

“Chakad” and “Trade Off” were the most honorary participants, introducing blockchain-based innovation. Chakad allows users to issue checks and Trade Off is a platform for P2P transactions based on blockchain technology. 

Other notable startups included IP Way, a forex wallet; PBS Wealth 360, a wealth management application; Sharif Disrupter, a platform for assessing loan applicants’ behavior; and Mandeg, an application helping users save money on a daily basis.

Tehran’s Shahid Beheshti University also organized “Finwars Marathon” earlier this month, focusing on financial coding. In addition to cash rewards, winners were also assisted in marketing their innovations. 

The Vice Presidency for Technology and Innovation is organizing the Startup Trigger 6 in March, focusing on the use of artificial intelligence in financial technologies.

Sharif University’s startup accelerator will host the event and provide participants with financial and technical support.

The office, which is the body in charge of startups and knowledge-based firms, has announced that it is working closely with the Central Bank of Iran in the development of fintech regulations.

Development of the legal framework for licensing fintechs is the most vital part of the roadmap for promoting Iran as a regional hub of fintechs. 

The CBI should define a precise mechanism for regulating and supervising the sector, since fintechs unfamiliar with basic issues in financial markets are susceptible to legal pitfalls. 

At the same time, the framework must be capable of promoting fair interactions between different players, especially by protecting innovators’ rights in their partnership with banks.

All these undertakings, however, would amount to little in the absence of an efficient framework for monitoring fintech operations.