Bahrain has been ranked as the most cost-competitive location to operate a financial services firm with a tech hub within the GCC countries, with a 48% cost advantage, in the ‘Cost of Doing Business in the GCC’ financial services sector report published by Ernst & Young LLP’s United States office.
In view of the growing importance of technology and innovation in developing the financial services industry in the GCC region, the in-depth study analysed key data, factoring in direct and indirect annual costs associated with yearly operating costs.
The categories benchmarked included office space, talent acquisition, business set up fees, taxes, as well as visa, work authorisation and residency costs comparing locations in Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE.
Commenting on the findings, Ali Al Mudaifa, Chief of Business Development at the Bahrain Economic Development Board (Bahrain EDB), said: "In today’s digital economy, establishing robust tech hubs is essential for financial services firms to innovate, compete, and stay ahead. Bahrain is positioning itself as a regional leader in this space, offering a supportive environment that combines cost-efficiency, cutting-edge infrastructure, and a forward-looking regulatory framework."
Bahrain’s reputation as a regional hub for financial technology, tech talent, and innovation is exemplified by the kingdom’s performance in international rankings and the presence of several global financial institutions that have established or expanded their operations in the country.
According to the World Competitiveness Ranking by IMD, Bahrain stood 4th globally for skilled labour and 6th for digital and technological skills.
Notable firms that have selected Bahrain for its tech talent include Citi’s Global Tech Hub, which pledged to employ 1,000 Bahraini coders, and JP Morgan’s Global Technology Centre, expected to create 200 high-quality job opportunities for the local workforce.
In the financial services sector, talent is a major cost factor, in the EY case study of financial services tech hub, the most common occupations are highly skilled data analysts as well as software and web developers, who collectively represent over half of the total talent employed.
"The country’s financial services sector not only provides cost advantages but also creates opportunities for sustainable growth and technological leadership in the GCC. Our goal is to empower global financial institutions to leverage Bahrain’s unique advantages and highly skilled talent to drive technological advancement across the region," stated Al Mudaifa.
The island nation of Bahrain is fast becoming a regional hub for financial services firms looking to set up global operations, providing significant savings in various operational areas, he added.
According to the EY report, annual labour costs for a financial services tech hub in Bahrain are up to 24% more competitive than the GCC.
Additionally, businesses can save 85% on annual business and licensing fees and enjoy 60% better value for office space rental, it stated.
Financial services in Bahrain are regulated by a single regulator, the Central Bank of Bahrain, that provides a simplified, streamlined process where the country’s category-based licensing procedure for financial services firms allows companies the flexibility to engage in various activities.
Andrew Phillips, Partner/Principal & Co-leader of Quantitative Economics & Statistics (QUEST) at Ernst & Young said: "Tech hubs are the heartbeat of modern financial services, enabling firms to develop innovative solutions, attract top talent, and expand their digital capabilities."
"Bahrain’s competitive costs provide an advantageous business climate for financial services innovation. Bahrain’s cost advantages relative to other GCC locations allow financial services tech hubs to direct their financial resources toward innovation rather than basic operating expenses," he added.-TradeArabia News Service
