UAE-based international financial center and free zone, Abu Dhabi Global Market (ADGM) is launching a new digital lab to facilitate collaboration between large financial institutions and fintech companies within a managed platform controlled by regulators.
Ahmed Ali Al Sayegh, Chairman of ADGM said, “The lab provides a secure and trusted digital environment where Fintechs can create and test solutions with financial institutions to address real-world problems”.
Mr. Al Sayegh was delivering the inaugural address at this year’s FinTech Abu Dhabi event, which has been held virtually as a result of COVID-19 limitations.
“The digital laboratory will allow rapid prototyping and adoption of digital solutions that can help companies overcome their pain points or tap new market opportunities to provide a secure platform that encourages collaboration,” added Mr. Al Sayegh.
The laboratory has been developed in cooperation with the Central Bank of the UAE (CBUAE) and other leading local lenders First Abu Dhabi Bank, Abu Dhabi Commercial Bank and Abu Dhabi Islamic Bank. It enables financial institutions to post issues that Fintechs can solve under the joint oversight of ADGM regulators and the central bank.
Richard Teng, chief executive of ADGM’s Financial Services Regulatory Authority (FSRA) said, “Its version 2.0 of our very successful regulatory sandbox. It’s moving from the analogue mode to a digital format”.
Mr. Teng added that there is a range of benefits to bringing the platform online. It “brings about faster adoption” of technologies, and opens up a larger global network of Fintechs to the task of solving problems.
Richard Teng CEO – ADGM FSRA
“It enlarges the marketplace. In the past, financial institutions relied a lot on in-house solutions to bring about new technology, new production of services, and they realized that is an extremely slow process. In a COVID environment, where remote becomes the norm the only way for delivery and for customer onboarding will be in the digital format”.
The digital lab also “creates a very exciting marketplace where VCs [venture capitalists] can go in and have a look at new, exciting opportunities they can invest in”, Mr. Teng added.
Mr. Al Sayegh stated that ADGM will soon issue draft directives and seek industry response to regulate fintech companies attempting to work with financial institutions in areas such as open banking and open finance.
Despite the challenging situation this year as a result of the pandemic, the number of tech startups at ADGM increased by 80 percent to 291 and venture capital activity tripled from the previous year, concluded Mr. Al Sayegh.
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