Richard Teng says ADGM was designed to generate wealth for the region. Irene García León / The National
Richard Teng says ADGM was designed to generate wealth for the region. Irene García León / The National

ADGM sees fintech as transforming financial services across Middle East and Africa



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."

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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.

The biog

Favourite book: You Are the Placebo – Making your mind matter, by Dr Joe Dispenza

Hobby: Running and watching Welsh rugby

Travel destination: Cyprus in the summer

Life goals: To be an aspirational and passionate University educator, enjoy life, be healthy and be the best dad possible.

COMPANY PROFILE

Name: Xpanceo

Started: 2018

Founders: Roman Axelrod, Valentyn Volkov

Based: Dubai, UAE

Industry: Smart contact lenses, augmented/virtual reality

Funding: $40 million

Investor: Opportunity Venture (Asia)

SPEC SHEET

Display: 10.4-inch IPS LCD, 400 nits, toughened glass

CPU: Unisoc T610; Mali G52 GPU

Memory: 4GB

Storage: 64GB, up to 512GB microSD

Camera: 8MP rear, 5MP front

Connectivity: Wi-Fi, Bluetooth 5.0, USB-C, 3.5mm audio

Battery: 8200mAh, up to 10 hours video

Platform: Android 11

Audio: Stereo speakers, 2 mics

Durability: IP52

Biometrics: Face unlock

Price: Dh849

Company Profile

Name: HyveGeo
Started: 2023
Founders: Abdulaziz bin Redha, Dr Samsurin Welch, Eva Morales and Dr Harjit Singh
Based: Cambridge and Dubai
Number of employees: 8
Industry: Sustainability & Environment
Funding: $200,000 plus undisclosed grant
Investors: Venture capital and government

Honeymoonish

Director: Elie El Samaan

Starring: Nour Al Ghandour, Mahmoud Boushahri

Rating: 3/5

COMPANY PROFILE

Company name: Almouneer
Started: 2017
Founders: Dr Noha Khater and Rania Kadry
Based: Egypt
Number of staff: 120
Investment: Bootstrapped, with support from Insead and Egyptian government, seed round of
$3.6 million led by Global Ventures

UAE athletes heading to Paris 2024

Equestrian
Abdullah Humaid Al Muhairi, Abdullah Al Marri, Omar Al Marzooqi, Salem Al Suwaidi, and Ali Al Karbi (four to be selected).


Judo
Men: Narmandakh Bayanmunkh (66kg), Nugzari Tatalashvili (81kg), Aram Grigorian (90kg), Dzhafar Kostoev (100kg), Magomedomar Magomedomarov (+100kg); women's Khorloodoi Bishrelt (52kg).


Cycling
Safia Al Sayegh (women's road race).

Swimming
Men: Yousef Rashid Al Matroushi (100m freestyle); women: Maha Abdullah Al Shehi (200m freestyle).

Athletics
Maryam Mohammed Al Farsi (women's 100 metres).

COMPANY PROFILE

Company name: OneOrder
Started: March 2022
Founders: Tamer Amer and Karim Maurice
Based: Cairo
Number of staff: 82
Investment stage: Series A

The Little Mermaid

Director: Rob Marshall
Stars: Halle Bailey, Jonah Hauer-King, Melissa McCarthy, Javier Bardem
Rating: 2/5

Sarfira

Director: Sudha Kongara Prasad

Starring: Akshay Kumar, Radhika Madan, Paresh Rawal

Rating: 2/5

Brief scores:

Toss: Nepal, chose to field

UAE 153-6: Shaiman (59), Usman (30); Regmi 2-23

Nepal 132-7: Jora 53 not out; Zahoor 2-17

Result: UAE won by 21 runs

Series: UAE lead 1-0

UAE currency: the story behind the money in your pockets
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Send “thenational” to the following numbers or call the hotline on: 0502955999
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Libya's Gold

UN Panel of Experts found regime secretly sold a fifth of the country's gold reserves.

The panel’s 2017 report followed a trail to West Africa where large sums of cash and gold were hidden by Abdullah Al Senussi, Qaddafi’s former intelligence chief, in 2011.

Cases filled with cash that was said to amount to $560m in 100 dollar notes, that was kept by a group of Libyans in Ouagadougou, Burkina Faso.

A second stash was said to have been held in Accra, Ghana, inside boxes at the local offices of an international human rights organisation based in France.

Results:

CSIL 2-star 145cm One Round with Jump-Off

1.           Alice Debany Clero (USA) on Amareusa S 38.83 seconds

2.           Anikka Sande (NOR) For Cash 2 39.09

3.           Georgia Tame (GBR) Cash Up 39.42

4.           Nadia Taryam (UAE) Askaria 3 39.63

5.           Miriam Schneider (GER) Fidelius G 47.74

Biography

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Proudest achievement: Receiving a presidential award for foreign services.

Family: Wife and three children.

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Fines for littering

In Dubai:

Dh200 for littering or spitting in the Dubai Metro

Dh500 for throwing cigarette butts or chewing gum on the floor, or littering from a vehicle. 
Dh1,000 for littering on a beach, spitting in public places, throwing a cigarette butt from a vehicle

In Sharjah and other emirates
Dh500 for littering - including cigarette butts and chewing gum - in public places and beaches in Sharjah
Dh2,000 for littering in Sharjah deserts
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Dh1,000 for littering from a car in Abu Dhabi
Dh1,000 to Dh100,000 for dumping waste in residential or public areas in Al Ain
Dh10,000 for littering at Ajman's beaches 

COMPANY PROFILE

Name: SmartCrowd
Started: 2018
Founder: Siddiq Farid and Musfique Ahmed
Based: Dubai
Sector: FinTech / PropTech
Initial investment: $650,000
Current number of staff: 35
Investment stage: Series A
Investors: Various institutional investors and notable angel investors (500 MENA, Shurooq, Mada, Seedstar, Tricap)

War and the virus
Quick facts
  • Storstockholms Lokaltrafik (SL) offers free guided tours of art in the metro and at the stations
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  • Avoid rush hour – between 9.30 am and 4.30 pm – to explore the artwork at leisure
What is the Supreme Petroleum Council?

The Abu Dhabi Supreme Petroleum Council was established in 1988 and is the highest governing body in Abu Dhabi’s oil and gas industry. The council formulates, oversees and executes the emirate’s petroleum-related policies. It also approves the allocation of capital spending across state-owned Adnoc’s upstream, downstream and midstream operations and functions as the company’s board of directors. The SPC’s mandate is also required for auctioning oil and gas concessions in Abu Dhabi and for awarding blocks to international oil companies. The council is chaired by Sheikh Khalifa, the President and Ruler of Abu Dhabi while Sheikh Mohamed bin Zayed, Abu Dhabi’s Crown Prince and Deputy Supreme Commander of the Armed Forces, is the vice chairman.

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

COMPANY PROFILE

Company name: Revibe
Started: 2022
Founders: Hamza Iraqui and Abdessamad Ben Zakour
Based: UAE
Industry: Refurbished electronics
Funds raised so far: $10m
Investors: Flat6Labs, Resonance and various others

COMPANY PROFILE

Company name: Mozn

Started: 2017

Founders: Mohammed Alhussein, Khaled Al Ghoneim, Abdullah Alsaeed and Malik Alyousef

Based: Riyadh, Saudi Arabia

Industry: FinTech

Funding: $10 million

Investors: Raed Ventures, Shorooq Partners, VentureSouq, Sukna Ventures and others