UAE regulators are concerned that laws aimed at over-regulating space for fintech companies will hamper innovation.
H.B. Lima, Director, Financial Services Regulatory Authority, Abu Dhabi Global Market (ADGM) said, “When it comes to regulation, fintech companies are entering a heavily regulated space. We need to strike a balance between not overly burdening them with regulations, and also trying to promote innovation.”
In 2016, ADGM unveiled the first fintech sandbox called the ‘Regulatory Laboratory’ in the Middle East region. “This is really a controlled environment where fintech startups can come in, get licensed but with a limited number of customers and operations,” said Mr. Lima.
Mr. Lima commented on the topic of Israel by cross introducing fintech startups between UAE and Israel and said that both markets will benefit from a stronger pipeline of companies. “We don’t just offer the UAE market – we are a gateway to the wider region. So, Israeli startups can explore us for the MENA region, and similarly, UAE startups can explore Israel as well,” he further added.
“If we really want to incentivize fintech companies to be licensed here, then adopting foreign regulation as a standard into Israeli regulation is the main road. I’m sure that within the scope of the talks already happening between regulators in the UAE and Israel, some kind of dual listing arrangements will be considered.”
Ken Coghill, Associate Director and Head of Operational & Technology Risk Supervision, Dubai Financial Services Authority (DFSA) said, “Fintechs need funding, they need access to markets – but there is a lot more fintechs are looking for. They are technology-based companies, but they need people to meet and engage with other market participants. They need to build the relationships. So, it goes beyond just being able to provide funding.”