Bahrain may be small in size, but its financial ambition is anything but small. Over the past few years, the Kingdom has quietly positioned itself as one of the most advanced fintech and digital banking hubs in the Gulf.
Strong regulation, early adoption of open banking, and a business friendly environment have attracted startups, global banks, and investors. Are you aware why so many fintech firms are choosing Bahrain over larger markets?
In this blog, we explore how Bahrain is building its fintech ecosystem, the numbers behind this growth, and what it means for businesses and investors in the region.
Why Bahrain is gaining attention in fintech
Bahrain has long been a financial center in the Gulf. Today, it is taking that role further by focusing on digital finance. The Central Bank of Bahrain was one of the first regulators in the region to introduce a fintech regulatory sandbox. This allowed startups to test new financial products under regulatory guidance.
As of 2025, Bahrain hosts more than 120 licensed fintech companies. This number has more than doubled since 2019.
The financial services sector contributes around 17 percent to Bahrain’s GDP, making it one of the largest non oil sectors in the economy.
Open banking as a key driver
One of Bahrain’s biggest advantages is open banking. Bahrain became the first country in the Middle East to introduce a full open banking framework. This allows banks and licensed firms to share customer approved data securely.
By 2024, over 90 percent of retail banks in Bahrain had integrated open banking systems.
This has led to rapid growth in digital payments, personal finance apps, and lending platforms.
| Indicator | Statistic / Figure | Year / Period | Source / Notes |
| Banks using open banking | 90% of retail banks | 2024 | Central Bank of Bahrain |
| Fintech firms licensed | 120+ firms | 2025 | Economic Development Board |
| Open banking launch | First in MENA | 2019 | CBB |
| Growth in digital payments | 20% annual growth | 2020 to 2024 | Banking reports |
Digital banking and neo banks
Digital only banks are another fast growing area. Bahrain has issued several digital banking licenses, allowing firms to operate without physical branches. Customer adoption has been strong. In 2024, over 65 percent of banking customers in Bahrain used mobile banking as their main channel.
Neo banks and digital wallets are especially popular among young users and small businesses. This shift has reduced costs for banks and improved access for customers.
Regulatory strength and speed
A major reason fintech firms choose Bahrain is regulatory clarity. Licensing timelines in Bahrain are shorter than many regional markets. In some cases, fintech licenses are approved within six months. The Central Bank of Bahrain offers clear guidelines for crypto assets, payments, crowdfunding, and digital banks. This balance between innovation and control has built strong trust. Are you confident your fintech or financial firm could scale faster with the right regulator?
Foreign investment and market access
Bahrain allows 100 percent foreign ownership in most financial and fintech activities. There are no capital repatriation limits, and corporate tax remains low compared to global standards.
Between 2020 and 2024, foreign investment into Bahrain’s fintech sector exceeded $1 billion.
Many firms use Bahrain as a base to serve the wider GCC market.
| Indicator | Statistic / Figure | Year / Period | Source / Notes |
| Foreign ownership | Up to 100% | Current | Bahrain investment law |
| Fintech foreign investment | $1 billion+ | 2020 to 2024 | EDB reports |
| License approval timeline | As fast as 6 months | Current | CBB |
| Fintech contribution to GDP | Growing annually | Recent years | Finance Ministry |
Talent and cost advantage
Bahrain also offers a cost advantage. Office space, staffing, and operational costs are lower than many neighboring markets. The country has invested heavily in digital skills training.
Over 50 percent of Bahrain’s workforce is under the age of 35.
This creates a strong talent base for technology driven firms.
What this means for you
Whether you are a fintech founder, bank, investor, or service provider, Bahrain offers real opportunity.
This growth means:
- Faster market entry
- Clear regulation
- Strong digital adoption
- Access to GCC markets
- Lower operating costs
Final thoughts
Bahrain is proving that size does not limit ambition. Through smart regulation, open banking, and digital focus, it has built one of the most advanced fintech ecosystems in the region. By understanding the data and the direction, businesses can position themselves early and grow alongside the market.
