August in the UAE is, shall we say, not the most productive month in the business calendar. With many of us heading off for cooler climes, major campaigns and initiatives tend to get put on the backburner, giving those employees remaining in the country a chance to relax a little until business ramps up again in September.
Not so Abu Dhabi Global Market (ADGM), which seems to have skipped the seasonal lull this year. ADGM's fintech partnership with remittance firm UAE Exchange, unveiled yesterday, was its fifth fintech announcement in less than two weeks, underscoring in a big way the freezone's ambitions in the sector.
Yesterday’s deal will see UAE Exchange work with ADGM to mentor fintech startups; but both entities will be hoping the knowledge sharing goes both ways, with each hoping to benefit from increased exposure to potentially disruptive start ups.
ADGM for its part has marketed itself as the most fintech-friendly financial centre in the region; its Regulatory Laboratory, providing a light-regulation sandbox environment for regional startups, was one of the first programmes of its kind in the Arabian Gulf. Last week, it announced a high profile international competition, the ‘Fintech Abu Dhabi Innovation Challenge’, in collaboration with KPMG.
These and other initiatives are gaining attention around region. But the nascent freezone faces competition from other more established regional financial centres. Bahrain is rolling out the red carpet for fintech entrepreneurs, while the DIFC’s recently launched Fintech Hive incubator has also attracted interest.
The opportunities and risks of fintech are perhaps even more apparent for UAE Exchange, the dominant remittance company in the Arabian Gulf. Fintech has already transformed the international remittance sector; TransferWise, co-founded by Skype’s first employee Taavet Hinrikus in 2011, has already grown to become the world’s fourth largest remittance company.
In this brave new world, financial services firms and regulators have no choice but to work with fintech start-ups to remain relevant. Given the speed of the disruptive impact of fintech on traditional financial institutions, that may even mean putting in a little extra time and effort when those around you are off on holiday.