Abu Dhabi has launched a financial cluster, with a focus on FinTech, insurance, digital and alternative investment assets, amid plans for the emirate to attract more investment and diversify its economy away from oil.
The initiative, announced at Abu Dhabi Finance Week, was approved by Sheikh Khaled bin Mohamed, Crown Prince of Abu Dhabi and chairman of the Abu Dhabi Executive Council, Abu Dhabi Media Office reported.
It is expected to contribute Dh56 billion ($15.24 billion) to Abu Dhabi's economy by 2045 and create more than 8,000 skilled jobs across FinTech, asset management and other sectors. It is also expected to attract Dh17 billion in new investment.
The launch of the cluster represents a strategic step towards building an integrated global financial ecosystem that harnesses capital, innovation, advanced technologies and AI solutions, Sheikh Khaled said.
He also emphasised the continuing need to develop innovative economic infrastructure to further attract investors, start-ups and entrepreneurs in advanced FinTech.
The platform is to connect regulators, FinTech innovators and small and medium-sized enterprises into “one coherent structure" to help businesses grow in Abu Dhabi, Fatima Al Hamadi, head of financial services cluster at Abu Dhabi Investment Office, told The National at Abu Dhabi Finance Week.
Companies specialised in digital payments and tokenisation, as well as family offices and wealth management firms, will also be part of the cluster.
“It brings together local players, regulators and other global financial institutions into one coherent structure so they can work together to grow at scale,” Ms Al Hamadi said.
The cluster aims to develop institutional-grade digital asset infrastructure and advanced FinTech platforms, while establishing frameworks that other jurisdictions can leverage as a global benchmark, ADMO said.
The strategy will also support the development of green finance instruments to attract investors focused on environmental, social and governance factors.
It will also provide tailored financial infrastructure for the emirate’s other priority clusters, including agrifood, smart and autonomous mobility and life sciences.
The cluster also expands access to diverse funding sources, including alternative lending, venture debt and growth capital solutions, for small and medium enterprises, which represent 42 per cent of Abu Dhabi’s non-oil GDP, ADMO said.
Infrastructure for private equity, venture capital, real estate investment vehicles and other alternative assets will support institutional and qualified investors.
The cluster will also strengthen Abu Dhabi’s insurance and reinsurance capacity and further enable the development of investor-protected savings products for UAE nationals and expatriates, and establish retirement planning frameworks.
Regulatory oversight will be led by the Ministry of Finance, UAE Central Bank, ADGM and the Securities and Commodities Authority. Financing and funding partners include the Khalifa Fund for Enterprise Development alongside sovereign wealth funds and family offices.
The physical and digital infrastructure will be provided by the Abu Dhabi Pension Fund, Al Etihad Payments, Khalifa Fund for Enterprise Development, General Pension and Social Security Authority, Etihad Credit Insurance and Etihad Credit Bureau.
An innovation and research and development network will be led by Hub71, United Arab Emirates University, Khalifa University, Emirates Institute of Finance and ADGM Academy to strengthen R&D partnerships in areas such as digital assets, artificial intelligence, advanced analytics and financial infrastructure.
Local talent will also be developed in actuarial science, FinTech engineering, quantitative finance and related disciplines, ADMO said.
"Abu Dhabi already has a strong financial base, with more than $1.7 trillion in assets being managed by sovereign institutions," Ms Al Hamadi said. "What Fida [FinTech, insurance, digital and alternative asset management] is aiming to do it to build a modern financial infrastructure to make it easier for businesses to grow."
Companies specialising in wealth management have been setting up their businesses in the ADGM as Abu Dhabi's economy continues to grow. In October, Switzerland’s largest bank UBS opened an advisory office in Abu Dhabi's financial centre as it seeks to capitalise on the influx of wealthy people to the UAE.
The UAE, the Arab world’s second-largest economy, has been striving to boost FDI and attract more companies as it diversifies its economy away from oil.
To boost FDI, the UAE has unveiled initiatives including 100 per cent foreign ownership of companies, reduced visa restrictions and incentives for SMEs. It also unveiled the NextGen FDI programme, which seeks to speed up licensing, increase the issuance of bulk or golden visas, improve banking services and provide commercial and residential lease incentives for technology companies seeking to relocate to the country.
