Northern Ireland’s rich FinTech ecosystem attracts the UAE spotlight

Envoy Andrew Jenkins is heading to FinTech Abu Dhabi to raise sector's profile with Gulf investors

Gary Lyons, left, and Gerry Murtagh of Regtick, winners of the UK leg of ADGM's Fintech100 competition, which aims to find the world’s most inspirational pioneering financial services start-ups. PhotoShow more

When Northern Ireland FinTech firm Regtick set up in August last year, its founders never imagined the business would be taking on UAE clients just 14 months later.

The unexpected expansion came after the company’s innovative platform, which simplifies the management of complex regulations for companies, saw it become the UK winner of Abu Dhabi Global Market’s FinTech 100.

The recognition has already secured clients based in the Emirates, with Regtick now planning to open an office in Abu Dhabi next year, shortly after it participates in the finals of the ADGM competition this month at FinTech Abu Dhabi, the Mena region’s leading event dedicated to financial services.

It is an example of the fast-moving growth in the sector in Belfast, which is currently the world’s number one destination for FinTech development investment projects, the top city in Europe for new FDI software development projects and was ranked in the inaugural Top 10 European Tech Cities for the Future.

“When we set up the company our initial plan was, ‘if we can get a nice chunk of the UK market, we'll be very happy’,” Regtick’s chief executive Gary Lyons told The National.

“But when you actually look at the way the platform works, it doesn't know geography and there’s lots of business in the UAE, as both Abu Dhabi and Dubai are making a really strong play to rebrand as financial services centres.”

Regtick’s acceleration into the UAE’s FinTech market is exactly the kind of success Andrew Jenkins, FinTech envoy for Northern Ireland, hopes for a whole cluster of businesses.

Mr Jenkins, director of mobility data and analytics company Arity, was appointed to the FinTech envoy role by John Glen, economic secretary to the Treasury, in 2019, when the UK government was looking to bolster its post-Brexit trade ties and level up the economy.

“We have world-leading technology clusters here in Northern Ireland – with particular expertise in regulatory technology – and when you start to build up particular areas of expertise, companies come and seek that out,” Mr Jenkins told The National.

Northern Ireland a leading FinTech cluster in UK

Northern Ireland has been identified as one of the UK’s top 10 FinTech clusters by the Kalifa Review, a February 2021 independent study of the sector, with about 10 per cent of firms achieving high-growth status and the region ripe for further growth.

The region's FinTech sector is now worth about £400 million ($538.4m) a year to its economy, with the potential to attract £25m in foreign direct investment in the next three years, said a September report commissioned by FinTech Northern Ireland.

“We’ve had a few accolades come our way in the recent years and we’re clearly doing something right,” said Mr Jenkins.

He highlighted the Centre for Secure Information Technology at Queen's University Belfast, and the Cognitive Analytics and Research Lab at Ulster University, as well as clusters of artificial intelligence machine-learning dotted around Belfast as evidence of the territory’s rapidly evolving FinTech scene.

Northern Ireland can learn from UAE expertise

In turn, however, companies in the sector in Northern Ireland should look to the UAE for guidance, Mr Jenkins said.

“The UAE is building some really strong capabilities, specifically around payments, blockchain and crypto and insuretech. Every ecosystem has its strengths and there's always opportunity to complement one another,” Mr Jenkins said.

Swathi Sri, head of territory for India, Middle East and Africa at Invest Northern Ireland, the regional economic development agency, said Northern Ireland was keen to expand into new sectors as its exports currently focus on material handling. The region produces 40 per cent of the world’s mobile crushing and screening equipment and almost a third of all airline seats.

While exports from Northern Ireland to the UAE totalled Dh1.5 billion over the past five years and imports from the UAE hit Dh499m over the same period, Invest NI now wants to make FinTech a new focal point.

While more than 30 Northern Irish companies have a base or a sales office in the UAE, First Derivatives, a Northern Ireland-founded capital markets software company that supports a number of banks in the Emirates, is one of the only FinTech entities with a presence there.

At FinTech Abu Dhabi, where Mr Jenkins will moderate a panel examining the relationship between the UK and UAE, he plans to raise the profile of Northern Ireland’s FinTech sector to ensure it evolves from a “largely unknown quantity” in the region.

“Every day $500 billion – 10 per cent of the global FX market – travels through Northern Ireland. This will really be about highlighting what Northern Ireland is about in terms of FinTech and speaking about our areas of strength," he said.

Big companies attracted by Northern Ireland's talent pool

Those strengths include a number of well-known FDI companies that have already established a presence in Northern Ireland, including PwC, which has set up its largest blockchain lab in Belfast, as well as US insurance player Allstate, which employs more than 2,400 people in Northern Ireland.

Big companies are attracted by the territory's large “talent pool”, Mr Jenkins said, thanks to its excellent universities and broader higher education colleges, as well as its favourable cost base in comparison to other parts of the UK and good standard of living.

“I'm 15 minutes from rolling hills and 10 minutes from amazing beaches and there's very few places anywhere else in the UK like that,” Mr Jenkins said.

The trade envoy also wants to learn from the UAE’s rapid growth in the FinTech sector, with the country now leading the Mena region and on track for a record of $2.5bn by 2022, said law group Clifford Chance, as regional and multinational financial institutions transform customer experiences, reduce costs and meet data regulations.

This dwarfs Northern Ireland’s contribution to the sector, which employs 7,000 people, with about 30,000 in the broader tech sector and 40,000 in financial services.

Ms Sri said Northern Ireland was “punching above its weight” given its population of only 1.8 million compared with the UAE’s 9.9 million, but Mr Jenkins said one vital area of potential collaboration is regtech, as both regions have strengths in this field.

UAE and Northern Ireland can share expertise on regulatory technology

This is something with which the team at Regtick certainly agree.

The company entered the ADGM FinTech 100 contest six months ago because “it was a natural fit” for their brand as ADGM, which set up in 2013, acts as the financial regulator for all transactions leaving the jurisdiction.

“There's a number of reasons why it would be attractive for us to have an office there,” said Mr Lyons, “including the fact that it's a credible jurisdiction in terms of its financial regulatory behaviour”, as well as its robust legal and judicial system.

Regtick's platform complements well-regulated jurisdiction well, he said, because "then people know what they need to do and will look to us and say, 'well, you've got a platform that does the work for us'.

“Plus all the big banks now have a regional head office in Abu Dhabi or Dubai, so from a strategic point of view, geographically, it's very good for us because it's a really credible bridge for us to consider further afield.”

When Regtick pitches at the finals of the ADGM contest, which aims to find the leading start-ups in the financial services sector from across the globe, it will focus on how companies can manage their compliance requirements.

“It's a real showcase event for us as a start-up. It puts us in front of chief executives from the biggest financial institutions globally,” said Mr Lyons, a former Scotland Yard fraud officer.

The Belfast company looking to expand to Abu Dhabi

Set up by Mr Lyons’s brother-in-law Gerry Murtagh, a financial analyst in the financial sector, the company helps others stay on top of their regulatory requirements by logging every step of a company’s compliance process to ensure they comply with regulatory change.

The duo funded the development of the platform, tapping into the “very strong FinTech development community” in Belfast to ensure it was robust and secure.

“Literally every other building seems to be some sort of a development house,” said Mr Lyons.

“There is a thriving FinTech community and it’s competitive in the desire for its own businesses to work but it’s also free with advice so we’ve had lots of advice form lots of people.

“I’m not a tech developer, I’m a grumpy, retired old policeman – but the available help we’ve had from the existing community has been amazing.”

Three weeks ago the company received a £70,000 investment from Invest NI to help grow the fledgling firm, with Regtick also joining the trade body on a recent trade mission to Gitex in Dubai.

“We made lots of contacts and had a really positive response with some business going to come out of it,” he said.

Winning the UK leg of the ADGM contest helped to raise their profile in the Emirates even more.

“Since winning the competition, we’ve had a number of inquiries from Abu Dhabi, saying, ‘Oh, you know, we see you're coming over here, can we set up a meeting to see your platform,’" said Mr Lyons.

Having boots on the ground will be vital for the company’s expansion, he said, although it will remain based in Belfast.

“Without selling ourselves short, we will probably generate more income in the UAE than we will in Belfast. And that's just a reality of the players and the size that's available,” he said.

Northern Ireland now a viable investment option for GCC states

Other Northern Ireland companies considering an expansion to the region may be attracted by the tax and lifestyle advantages that come with domiciling a company in Abu Dhabi.

“They offer some fairly competitive allurements for people to move their companies there,” Mr Lyons said.

Meanwhile, Northern Ireland is also increasingly regarded as a credible location for investment from the Emirates, said Ms Sri.

"We have received quite a few enquiries from the UAE and Saudi Arabia recently from people interested in FinTech, as well as other sectors such as EdTech, wanting to understand the landscape of Northern Ireland," she said.

"Traditionally, companies and family offices in the UAE, Saudi Arabia or in the wider Middle East would look at London and then Manchester [for investment] and they wouldn't go beyond that.

“But the recent developments around Saudi Arabia’s Albilad Capital investing in one of the biggest office properties in Northern Ireland backed by a bank from the UAE says that they are looking beyond the traditional cities. This is why we are taking over the UK Pavilion for a day in February to showcase that Northern Ireland is a location to study, live, work and invest in trade."