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FinTech in the Middle East: Interview with Abu Dhabi Global Market

[fa icon="calendar"] Mar 25, 2022 10:41:37 AM / By Team

Team

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The fifth edition of Abu Dhabi Global Market (ADGM) flagship Fintech Abu Dhabi Festival was held from November 22-24 with a schedule packed with over 200 orators, shaping the international fintech landscape. The event was held under the HH Sheikh Hazza bin Zayed Al Nahyan, patronage of the Deputy Chairman of the Abu Dhabi Executive Council.

 

The Middle East's largest Fintech festival was organized in an exciting hybrid format, with the offline event being hosted at ADGM.In comparison to the previous year's events, the online venue of the Festival has seen ground-breaking global interest, with three times more enrollments and participants traveling in from 41 different countries to attend the event.

 

 Chairman of ADGM, Ahmed Jasim Al Zaabi, quoted:

"Given the rapid pace of transformation across the financial services sector, continued knowledge-sharing on how best to address and embrace these changes is crucial. We at ADGM take great pride in hosting the region's largest Fintech festival alongside esteemed colleagues, respected decision makers, and leading financial sector and Fintech representatives. This year's Fintech Abu Dhabi Festival will bear no exception to past editions in its aspiration to be inspiring, thought-provoking, and transformative, underpinned by a commitment to highlight Abu Dhabi as a global capital for financial innovation, investment, and regulatory excellence.

 

 

For the first time, the festival hosted the CEOs and founders of critical financial institutions and founders of some of the world's promising startups in its powerful step towards fintech evolution and the impact on the international platforms. 

 

What is ADGM?

 

Abu Dhabi Global Market (ADGM) is a world-renowned global financial hub strategically based in the capital of the United Arab Emirates- "Sowwah Square," founded by UAE Federal Decree. Its jurisdiction spreads across 114 hectares of Al Maryah Island.

 

ADGM has three autonomous authorities - the Registration Authority (RA), the Financial Services Regulatory Authority (FSRA), and ADGM Courts - to ensure that its business-friendly ecosystem aligns with global best approaches, recognized by significant financial hubs worldwide.

 

The financial hub was founded in 2013 and became fully functional in October 2015. Since then, ADGM has quickly earned international recognition for its powerful, advanced, and responsive business-friendly environment. By collaborating and focusing on understanding business requirements, ADGM presented many 'firsts' both regionally and internationally. ADGM provides value to its customers and peers as a catalyst for evolution and contributes to Abu Dhabi's ambitious development plan and approach. 

 

UAE FinTech market overview

 

The UAE is an evolving economy, home to FinTech global centers of Dubai and Abu Dhabi. The UAE's National plan 2021 focuses on transforming the country into financial and commercial capital for two billion people by ‘transitioning to a knowledge-based economy and evolving among the best in global entrepreneurship,’ shows its dedication to more comprehensive digital modification. 

 

According to IMD's World Digital Competitiveness Ranking 2020 Report, the UAE is ranked first in the Arab area (13th internationally) in digital competitiveness. Two leading UAE financial free sectors, Abu Dhabi Global Market and Dubai International Financial Center, are the critical flagship models of the UAE's financial services and fintech success.

 

The UAE central bank reported a three-year plan that comprises introduction of digital currency. The approach supports the digital modification of the UAE's financial services department, including embracing modern technology such as artificial intelligence and big data.

 

The UAE recently revealed the opening of the DIFC Innovation Hub, a welcome addition to the fintech infrastructure in the region, and a backed commitment from the UAE government to encourage the development of new and arising industries.



In conversation with ADGM's Wai Lum Kwok on FinTech Abu Dhabi and the state of FinTech in the UAE

 

Mr. Wai Lum Kwok is the Senior Executive Director – Financial Services Regulatory Authority of ADGM. He joined the position in June 2015 and headed up the capital markets department responsible for the admission and management of financial market infrastructures and capital market intermediaries. The department also holds the service of securities collective investments schemes.

 

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Mr. Kwok also spearheads FSRA’s strategy and actions to support innovation management in Financial Technology (FinTech) and the growth of the FinTech environment in ADGM.

 

He has more than ten years of supervisory experience. Before ADGM, he served as the Director of the Capital Markets Intermediaries Division of the Monetary Authority of Singapore. He is a graduate of Imperial College, London, with an M.Eng in Electrical Engineering and an M.Sc in Applied Finance from the National University of Singapore. 

 

YourTarget interviewed Mr.Kwok following the success of Fintech Abu Dhabi Festival (Fintech AD). Below is the exclusive interview:

 

YOURTARGET: The 5th edition of FinTech Abu Dhabi held recently was a success, congratulations! Can you give us the highlights of this year’s event?

 

KWOK: Thank you.  Indeed, the fifth edition of our flagship Fintech Abu Dhabi Festival (Fintech AD) held from 22 to 24 November 2021, was the most successful by far. Organized under the patronage of His Highness Sheikh Hazza bin Zayed Al Nahyan, Vice Chairman of the Abu Dhabi Executive Council, the event saw record participation in a hybrid format of in-person gatherings and virtual streaming. Based on the theme of “Powering the Future of Finance”, FinTech AD 2021’s agenda was packed with over 80 sessions and 40 hours of content led by the world’s leading policy and decision makers, fintech innovators, unicorns, financial sector leaders, and investors shaping the global fintech landscape.  Over 27,000 registrants and 180 speakers attended the festival over the three-day event. You can watch the content on-demand at our website: https://www.adgm.com/initiatives/fintech-abu-dhabi

 

Having planned and overseen the event since 2017, Fintech AD 2021 has been the most significant for me from several perspectives.  I am particularly excited about how the event has shaped up as the de-facto convening platform in this region for investors and founders.  We brought together some 250 top-tier global investors including Abu Dhabi’s sovereign wealth and investment agencies, and 100 of the fastest growing fintechs around the world (the “Fintech 100”) for a day of deal-making and networking. There was lots of energy and great conversations in the room, as participants welcomed back the face-to-face interactions that were so sorely missed since the onset of the pandemic.

 

The process in which we go about searching for the Fintech 100 was just as enriching.  Leading up to Fintech AD 2021, we conducted a global virtual tour from June to October 2021 of over 35 countries to connect ADGM with other Fintech hubs.  Through a series of pitching competitions at each stop, we did our scouting.  One of the most memorable moments was when we hosted the tour stop at the New York Stock Exchange (NYSE), and the Fintech AD logo was lit up on the iconic ticker boards of the NYSE trading floor to mark our presence.

 

Then, there was the marquee tradition where ADGM Chairman (H.E. Ahmed Jasim Al Zaabi) delivered the opening keynote and announced key initiatives to support and help advance the digital transformation agenda of the financial sector.  I am particularly excited by our initiatives in using technological solutions (regtech) that make regulatory compliance simpler, more efficient and more effective for our supervised financial institutions.  The initiatives, captured in our report “Powering the Future of Regulation” launched in November 2021, underscore our vision of offering “Regulation-as-a-Service” where firms will be able to make use of regtech tools that we provide to achieve compliance against the regulatory requirements.

 

Finally, I am heartened to note how Fintech AD has supported the digitalisation agenda of financial institutions over the last five years. For instance, the Innovation Challenge at Fintech AD 2021 had for the first time involved participation from a good mix of UAE, regional and international banks as corporate champions to work with fintechs to address pain points in the financial sector.  The Fintech AD Awards ceremony also saw strong growth in the categories and nominations, recognising excellence in the field of fintech deployment, and promoting and supporting fintech talent within the UAE and the region.

 

 

YOURTARGET: Can you share with us an overview of the FinTech ecosystem in Abu Dhabi at present?

 

KWOK: Abu Dhabi has seen remarkable transformation in its innovation and fintech ecosystem in recent years.  Today it has one of the most sophisticated fintech ecosystems in the region. There are several developments that have contributed to this.

 

In particular, two major initiatives under the auspices of the Abu Dhabi Government 50billion Dirham accelerator programme known as Ghadan (which is the Arabic word for Tomorrow), truly accelerated the innovation landscape.

 

The first was the launch of Hub71, a global tech ecosystem located in ADGM that houses a dynamic community of start-ups, investors, corporate firms and policy makers, all under one roof.  Backed by a robust network of strategic partners including Mubadala, Abu Dhabi Investment Office, Microsoft and Softbank, Hub71 is a one-stop shop stringing all of Abu Dhabi’s tech start-up ecosystem developmental efforts and programmes together.  These include:

 

  • Incentive programme to help startups establish a foothold by providing subsidized housing, office space and health insurance;

 

  • Corporate engagement programme to create a bridge between the major corporates and the startups looking to transform industries and address pain points in their sectors;

 

  • Accelerator programme by world-class enablers such as Plug & Play and Techstars to help founders who have the potential to be local champions scale globally;

 

  • Upskilling programme to fast-track talent development by matching experts with innovators; and

 

  • Ventures building programme to co-create startups, gain funding from venture capital funds and increase market access to Abu Dhabi.

hub_71

 

The second major initiative was the investment schemes and funds placement programmes amounting to more than US$ 1billion administered by various Abu Dhabi stakeholders --- such as Mubadala, Abu Dhabi Investment Office, Abu Dhabi Catalyst Partners, ADQ --- to support start-ups and scale-ups at different stages of growth, to bolster VC activities and attract international talent to ADGM.  In the last two years, we have seen VC activities in ADGM increased fivefold, and we continue to see a strong pipeline of VC managers looking to establish presence in Abu Dhabi.

 

At ADGM, we play an active role in activating the fintech ecosystem in collaboration with industry stakeholders to accelerate the transformation of the fintech landscape in the region.  The Fintech AD Festival is a case in point, fostering community engagements and anchoring entrepreneurial talent to leverage Abu Dhabi’s ecosystem as a gateway to the vast Middle East, Africa and South Asian markets.



YOURTARGET: What were the trends in FinTech seen and presented at this year’s event?

 

KWOK: Based on the emergent trends and developments that we witness in the region, we continuously review and update the agenda of Fintech AD to ensure that we capture and remain relevant to the latest discourse and issues in the world of fintech. 

 

Fintech_trends

 

For Fintech AD 2021, we added several exciting new forums, including:

 

  • CxO21, a digital banking innovation summit that delves into the world of corporate innovation and digital banking;

 

  • Token, focusing on the fast-evolving world of digital assets and currencies;

 

  • Fintech for Good, a dedicated forum taking a closer look at the intersection of sustainability, Fintech and innovation;

 

  • Fintech Souk, a close look at cutting-edge developments in retail and payments; and

 

  • Risk4.0, a forum focussing on risk management in Fintech and financial security.



YOURTARGET: Can you tell us more about the ADGM Digital Lab? When was this established and what is the main objective?

 

KWOK: The ADGM Digital Lab was launched in 2021 as a direct response to the challenges faced by industry stakeholders in trialing and deploying innovative solutions to market. These include matching relevant fintechs and regtechs to incumbents, validating their effectiveness and building a strong business case for collaboration. Conceived as a one-stop-shop to identify innovative solutions, exchange with market participants and test an initial collaboration, the Digital Lab is the world’s first regulator-led digital sandbox, and as such is being provided to the ecosystem as a public service. 

 

ADGM_Digital_lab

 

In order to provide an end-to-end tool for the innovation iteration process, the Digital Lab is made up of a marketplace and virtual testing environment. The marketplace allows startups, financial institutions, academics and government entities to register profiles detailing their product offerings or needs, as well as expose their APIs to the community. The testing environment is equipped with a full suite of technical functionalities that allow financial institutions to replicate their core-banking systems in secure, access-controlled containers and observe how start-up solutions would interact with their existing infrastructure. The Digital Lab is pre-populated with synthetic data sets containing hundreds of thousands of realistic transactions in order to facilitate testing in full compliance with data protection requirements.

 

There are currently 97 entities on the platform, including leading financial institutions such as ADCB, FAB, Emirates NDB, SABB, Standard Chartered and HSBC. In addition to financial institutions, startups and tech vendors, as well as regulators and government agencies are utilizing the platform to inform and further our innovation agenda.



YOURTARGET: What is your forecast for 2022 and the next 5 years for the FinTech market in Abu Dhabi?

 

KWOK: Given how rapidly financial innovation and technological advances have transformed the financial sector in the last few years, it would be anyone’s guess on what the fintech landscape in the UAE and region will look like in the next 5 years.  But one area that I am particularly excited about is the tokenization of financial assets and products.   

 

Traditionally, investments in private capital markets such as private equity and venture investments tend to be illiquid and accessible largely to institutional investors.  However, with the advent of financial technology and innovation, private capital markets have the potential to become more accessible to investors of all types and more efficient for private enterprises which seek to raise capital.  In particular, the adoption of digital assets and tokenized securities has enabled greater accessibility and transferability of private capital market investments.

 

Another development that I would like to see is the strengthening of collaboration between financial institutions and fintech innovators in the area of open finance and open banking.  At the core, open finance is about improving customers’ control over their data.  By allowing access to a customer’s financial information and data through open APIs and mobile apps, fintechs and other tech service providers are able to customize innovative solutions for consumers, which a financial institution or bank on its own is unable to deliver.

 

YourTarget always focuses on creating the best content for its readers. If you want us to feature other industries or experts in the YT blog, leave a comment below. We always aspire to communicate with industry experts to bring the most updated and fresh information for our readers. Our content strategy focuses on creating the most relevant and informative piece and hence we always welcome YourTarget media partners and guest writers for collaboration.

 

We also released an eBook with the top digital marketing trends for 2022, which includes trends for FinTech in the Middle East. Download your free copy now and get updated with the new trends that will shape the world of digital marketing this year.

 

Download YourTarget's Latest eBook on Digital Marketing Trends and Forecast for 2022

Topics: Business, DigitalTransformation, Middle East, FinTech

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