How can financial centres play a role in revolutionizing a region’s financial services sector?
Answering that question has taken various forms in the past, depending on where it’s being asked. In New York ca. 1850s, the answer would have been in stock trading and utilizing the vast flow of immigrants and their foreign culture to support and enrich the labor force. In the 1970s, Singapore capitalized on its Asian Currency Unit to allow more participation from banks and financial institutions.
Recently awarded the Financial Centre of the Year at the annual MENA Capital Markets Summit & Awards in Dubai, 2017’s Abu Dhabi Global Market (ADGM) starts its operations and jumps right into the fray by boldly spearheading FinTech initiatives across the region. From the FinTech Abu Dhabi Summit that launched their first batch of initiatives to the partnerships signed around the world, here are the highlights of their successes in just two years of operations.
FinTech Abu Dhabi Summit
The inaugural FinTech Abu Dhabi Summit was held last October, a two-day invitation-only event filled with panel discussions, keynote speeches, demo sessions, and workshops. It was widely attended by around five hundred FinTech personalities from around the world at the Fairmont Bab Al Bahar.
This was the event where the launch of the ADGM’s Innovation Centre, and its global partnership with the world’s largest startup accelerator Plug and Play, was announced. It also marked the culmination of the first FinTech Abu Dhabi Innovation Challenge, the winners being FRS Labs and Silent Eight.
The FinTech RegLab — short for Financial Technology Regulatory Laboratory — was formulated by the ADGM to foster innovation. It provides a safe environment for participants to implement their FinTech solutions by removing much of the regulatory burdens found in the real world — a contained, cost-effective sandbox for start-ups.
They recently announced the approved second batch of RegLab participants, comprised of eleven local and international FinTech startups.
Accelerator partnership — Plug and Play
The Silicon Valley tech accelerator, whose past investments include Google, Dropbox, and Paypal, has signed a global partnership with the ADGM. It has opened an Abu Dhabi office, and plans to bring several of its FinTech start-ups to work with the local financial institutions. It will work in collaboration with the new ADGM FinTech Innovation Centre mentioned below.
When the project was announced, Plug and Play Chief Executive Saeed Amidi told The National that close to one hundred portfolio companies are interested in moving to the Middle East and implementing their innovations alongside regional banking institutions.
This is a physical hub that aims to foster a vibrant FinTech ecosystem, allowing innovation to take root in Abu Dhabi and the region. Expected to be completed by the first half of 2018, the Centre will include a co-working space for FinTech startups and financial institutions, investors, and potential partners, as well as facilities for networking and events. This is where the ADGM’s partnership with the Silicon Valley’s Plug and Play will (hold its mahor events and activities), with the goal of bringing in FinTech entrepreneurs and companies from all over the world to develop and implement innovative solutions to the region.
The Centre will also house the participants of the RegLab, ADGM’s sandbox for companies and regulators to live-test their innovative FinTech products. The Centre welcomes startups specializing in Artificial Intelligence, Blockchain, DLTs, Biometrics, E-Payments, RegTech, and other focuses that can change the financial services landscape in the years to come.
There are many reasons why one would want to set up a business in the ADGM. It has a welcoming SPV regime, for one, regulated by Common law jurisdiction and independent ADGM Courts. It is also the first in the MENA region to have a private REIT regime, an attractive asset class offering investors exposure to income-generating real estate with the advantage of investment in manageable amounts and better liquidity compared to direct investment in property.
It is also leading the region in FinTech initiatives. The ADGM has not wasted time in supporting greater financial innovation, cultivating FinTech talents, fostering closer industry collaboration and facilitating cross-border investment opportunitites to bolster the development and growth of financial services in Abu Dhabi and the region.
Despite its youth, it has garnered attention around the world with all it has achieved. The ADGM found its differentiation by shifting goalposts — towards a digitized future that aims to provide a more holistic experience in the finance industry, for both businesses and clients.