The UAE-based international financial center and free zone, Abu Dhabi Global Market’s (ADGM) Financial Services Regulatory Authority (FSRA) have brought a new regulatory framework for the authorization and supervision of fintech firms giving third-party services to customers of financial institutions.
The Third-Party Providers (“TPPs”) are firms that act as intermediaries between customers and the financial institutions that provide services to them in order to help customers manage and use their data more effectively when undertaking financial transactions.
The new framework will support the improved management of personal finances by focusing the regulated activity for TPPs on the accessing, processing and transferring of customer data, with appropriate regulatory requirements in the areas of data protection and privacy of information, the conduct of business, technology risk, anti-money laundering and countering terrorist financing.
Under the new regulation, TPPs will be enabled to work alongside financial institutions in a secure and efficient manner that will simplify customer transaction procedures, whilst protecting their data and interests. Further, it will offer a foundation to support the growth of open finance, with the focus being on giving customers and businesses more control over a wider range of their financial data, like investment and other financial products.
“We are excited to launch this new framework, which is based on international best practices. It will help TPPs and financial institutions collaborate in order to serve their customers more efficiently, and it lays the ground for the development and growth of open finance in the region. This framework will ensure that customers’ and financial institutions’ best interests are protected by requiring TPPs to be responsible.”
The new framework will further cater to a wide range of innovative services, thereby supporting Abu Dhabi’s digital transformation agenda and supporting the growth and diversification of the UAE’s enterprise economy.
The formation of new regulations is all part of ADGM’s ongoing efforts to develop a sound and progressive fintech ecosystem that promotes innovation and new models to deliver financial services.