Abu Dhabi Global Market (ADGM), the Emirate's nascent financial hub, wants its fintech initiatives to be the catalyst for a revolution in financial services across the Middle East and Africa, where 80 per cent of the population doesn't have a bank account and small business face a funding gap of US$260 billion.
"In our view, this whole region is ripe for financial transformation and that's where fintech comes into play," Richard Teng, the chief executive of ADGM's Financial Services Regulatory Authority, told the National.
"Why is that the case? You look at demographic growth, if you take Middle East and Africa, you are going to see very strong growth. They have a huge need for financial services. There's much more financial intermediation that needs to take place, rising middle class, much more capital formation. The region is going through a huge diversification exercise so much more financial intermediation is needed."
Mr Teng spoke to The National ahead of FinTech Abu Dhabi 2017, a two-day summit hosted by ADGM on Sunday and Monday under the patronage of Sheikh Hazza bin Zayed, vice chairman of the Abu Dhabi Executive Council.
Speakers at the summit include Saeed Amidi, chief executive of Silicon Valley venture capital fund Plug and Play, Ambareen Musa, the founder of price comparison site Souqamal.com, and Fadi Ghandour, the executive chairman of Dubai-based venture capital firm Wamda Capital.
The freezone has placed a high emphasis on fintech since opening its doors for business in late 2015, signing multiple collaboration agreements with local and international financial institutions and government entities. It announced on Saturday a partnership with Abu Dhabi Commercial Bank aimed at promoting fintech and contributing to ADGM's existing fintech ecosystem.
"In March 2016, our chairman highlighted our ambition and no one at the time was looking at fintech here; ... we were the first in the region to plant the flag that we want to be the fintech hub," Mr Teng said.
At the heart of ADGM's efforts to encourage fintech start-ups to the capital are its RegLab incubator programme for fintech entrepreneurs and the FinTech Abu Dhabi Innovation Challenge for start-ups, run in conjunction with KPMG.
Mr Teng said the centre will announce on Sunday the second batch of entrepreneurs to be included in the RegLab programme.
Beyond its fintech ambitions, Mr Teng said that ADGM had more than tripled the number of registered companies on its books in the past year, with over 500 firms having now set up shop, including 55 financial services firms.
He insisted there was room for future growth, in spite of competition from rival financial freezones across the region.
"There aren't enough financial services," Mr. Teng said. "There's much more room for growth in financial services and with the government diversifying a lot of financial intermediation will be needed."
Over the past year, the centre's financial regulator has been boosting regulations at the ADGM to attract more businesses to set up shop in the freezone. In July, ADGM announced a landmark new arbitration hearing centre, alongside an agreement with the International Chamber of Commerce (ICC), marking a significant addition to the country’s legal infrastructure.
The ICC Court, which is headquartered in Paris, has administered disputes in a total of 23,000 international, commercial, business and investment arbitration cases since 1923. It is widely used in international transactions in the Middle East.
ADGM’s efforts in recent years to become an international finance hub of global standing have started to pay off. Last month, the ADGM rose three places to No 25 in the closely-watched Global Financial Center Index, compiled every six months by the market intelligence firm Z\Yen, which is based in London.