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Abu Dhabi Global Market (ADGM) is working with its equivalent in Singapore to help it create the right environment to encourage financial services (fintech) IT innovation.
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The fintech team at the Financial Services Regulatory Authority (FSRA) of ADGM has been liaising with its counterpart at the Monetary Authority of Singapore.
A co-operative agreement (CA) has been signed to establish a framework for both regulators to help startups and innovators understand their regulatory regimes.
The agreement means regulators could now run joint innovation projects on the use of certain technologies in the finance sector. These include digital and mobile payments, blockchain, big data and application programming interfaces (APIs).
Richard Teng, CEO of finance regulator at the ADGM, said the CA will “advance innovation and the use of technology to promote growth in the financial sector and protect the best interests of investors in our jurisdictions”.
He added that Asia and the Middle East share similarities with both showing “immense growth potential and a large underserved financial sector”.
But the Middle East needs a boost in fintech because, despite being a fast developing region, it has seen limited fintech investments.
Alternative financial platforms – such as crowdfunding sites and peer-to-peer lending – have become the norm in the world’s fintech hotspots but, according to experts, the global trend has yet to infiltrate the Middle East. A report from FinTech Week in 2016 stated that less than 0.1% of fintech investment originates in the Middle East.
Read more about fintech in the Middle East
- The Middle East has been slow to join the fintech revolution, but there is an opportunity for CIOs to help banks stride ahead as demand picks up.
- UAE bank’s new account is based on a smartphone app that is designed to learn and adopt to customer preferences.
- Commercial Bank of Dubai (CBD) is targeting the digital-savvy citizens of the United Arab Emirates (UAE) with a mobile app-based bank.
However, things are picking up in the region. In June 2016, German challenger bank Fidor opened up an operation in Dubai to gain access to the Middle East market.
The bank, which launched in 2007, opened its Dubai office in the Dubai Silicon Oasis Park. The office will form a central hub for its international activities.
Meanwhile, Standard Chartered’s regional CIO for Africa and the Middle East, V Chandrasekar, told Computer Weekly in 2016 that the bank was investing in setting up fintech incubators across markets, including Dubai, to stay abreast of trends.