Abu Dhabi Global Market rolls out new digital lab

The platform has been developed in collaboration with the Central Bank of the UAE and some of the emirate's biggest lenders

FH1NBM Evening view of new financial and business district called Abu Dhabi Global Market square (ABGM) on Al Maryah Island Abu Dhabi. Alamy
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Abu Dhabi Global Market is rolling out a new digital lab to promote co-operation between large financial institutions and FinTech companies within a controlled platform supervised by regulators.

The lab “provides a secure and trusted digital environment where FinTechs can create and test solutions with financial institutions to address real world problems”, Abu Dhabi Global Market chairman Ahmed Al Sayegh said.

“The digital lab will enable rapid prototyping and adoptions of digital solutions that can help businesses to overcome their pain points or tap new market opportunities to provide a secure platform that promotes collaboration,” Mr Al Sayegh said in his opening address to this year's FinTech Abu Dhabi event, which is being held online as a result of Covid-19.

The lab has been developed in collaboration with the Central Bank of the UAE and with major local lenders First Abu Dhabi Bank, Abu Dhabi Commercial Bank and Abu Dhabi Islamic Bank. It allows financial institutions to post problems that FinTechs can solve, under the joint supervision of regulators from ADGM and the central bank.

"It's really version 2.0 of our very successful regulatory sandbox. It's moving from the analogue mode to a digital format," Richard Teng, chief executive of ADGM's Financial Services Regulatory Authority, told The National.

Moving the platform online has a number of advantages, Mr Teng added. It "brings about faster adoption" of technologies, and it throws open the challenge of solving problems to a much wider global network of FinTechs.

"It enlarges the marketplace," he said. "In the past, financial institutions relied a lot on in-house solutions to bring about new technology, new production of services, and they realised that is an extremely slow process. In a Covid environment, where remote becomes the norm ... the only way for delivery and for customer onboarding will be in the digital format," he said.

The digital lab also "creates a very exciting marketplace where VCs [venture capitalists] can go in and have a look at new, exciting opportunities they can invest in", Mr Teng added.

ADGM will soon be issuing draft proposals and seeking industry feedback on a new framework to regulate FinTech companies that want to work with financial institutions in areas such as open banking and open finance, Mr Al Sayegh said.

Despite the challenging situation as a result of the pandemic this year, the number of tech start-ups at ADGM grew by 80 per cent to 291 and venture capital activity tripled from the prior year, Mr Al Sayegh said.