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Abu Dhabi is aiming to become the capital of financial technology – or fintech – in the Arabian Gulf under an initiative announced by Ahmed Al Sayegh, the chairman of the Abu Dhabi Global Market, the capital’s financial free zone.
Mr Al Sayegh announced the plan, to be prepared in cooperation with international and regional partners, at the opening session of the Global Financial Markets Forum 2016 in the capital yesterday. He said that fintech was a fast-growing part of the international financial industry.
The global value of fintech investment has expanded threefold in the past three years and could be worth as much as US$12 billion by 2018, he added.
“We have not yet seen a deeply established fintech ecosystem in the GCC. Our intention is to promote Abu Dhabi as the fintech hub in the GCC in partnership with key stakeholders,” Mr Al Sayegh said.
Richard Teng, the chief executive of the ADGM financial regulator, said that work was under way on a “roadmap” towards achieving the fintech goal, in collusion with stakeholders in the region and abroad. Details of the roadmap would be announced “in due course”, he said.
Mr Al Sayegh also announced two new financial members of the ADGM. Macquarie Capital, the Australian-based international investment banking group, and Aberdeen Asset Management, one of the UK’s leading wealth management businesses, have both applied to become ADGM licencees.
The admission process is said to be “advanced”. When they are admitted, it will mean there are three financial members of the ADGM, which declared itself “open for business” in October, in addition to 25-plus non-financial companies.
Mr Teng said there had been “very robust” interest in ADGM services from regional and international companies. On Macquarie and Aberdeen, he said: “They both have ambitions for this region and they are looking for a hub. They believe ADGM will provide them with that hub.”
Fintech has emerged as a stand-alone branch of the financial services industry, with heavy investment by nearly all global banks.
Increasingly sophisticated technological innovation is considered to be a response to the complexity of modern financial systems. Blockchain, the high-tech bookkeeping system for financial transactions that is behind Bitcoin, is perhaps the best-known example.
Mr Al Sayegh said the strategy behind the fintech initiative was threefold: to develop innovative services and products with the aim of making markets more efficient; to enhance and exploit growth opportunities in the Abu Dhabi financial system; and to anchor fintech in local banks and institutions to capitalise on their strengths and minimise risks.
Mr Al Sayegh said he expected this year to be a “year of global uncertainty and market volatility”, as had been the case in the opening weeks of the year. There was concern about the global impact of China’s slowing growth rate and the effects of a shift in Federal Reserve interest rate policy.
These factors had increased risks in the global system and increased the need to focus on financial innovation and technology to minimise these risks, he said.
In earlier keynote speeches yesterday, the forum heard from Sheikh Nahyan bin Mubarak Al Nahyan, UAE Minister for Culture and Knowledge Development, of the need for the financial and economic industries to adopt ethical standards in transactions as well as the social, environmental and educational arenas. “Let us all apply our wisdom to the world’s financial markets. The world will welcome that wisdom,” he said.
Nasser Ahmed Alsowaidi, the chairman of National Bank of Abu Dhabi, which is the host of the forum, said that the UAE should be “no longer enslaved to the oil price”.