Recognising the importance of Open Banking and the role of FinTech in the UAE

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Wai-Lum Kwok, Senior Executive Director at the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM), shares his vision as a regulator for an open and collaborative ecosystem.


In a post Covid-19 world, digitization and innovation will be the key to helping the global economy recalibrate to a new normal.  Policy makers and regulators can be an important catalyst in enabling this transformation, bringing together FinTechs and financial institutions to solve common challenges and create new business opportunities and growth areas.

For instance, Open Banking, championed in certain jurisdictions such as Europe and Australia, has facilitated greater collaboration and innovation in the retail payments space.  At ADGM, we believe the benefits of open innovation and collaboration can be brought beyond payments to a wider range of financial services.  For example, ‘marketplace banking’ business models that expose internal business assets or services in the form of APIs to external counterparties, are creating an entirely new ecosystem of banking services predicated on intelligent data management and agility in developing new products.

A cornerstone of our efforts in supporting this vision is the ADGM Digital Lab — a digital sandbox and marketplace where FinTechs and financial institutions can co-create and test solutions to address specific challenges or business needs, with direct guidance and engagement by regulators.

Underpinned by APIs, and leveraging smart digital tools to create representations of its operating systems and data, a bank can use the Digital Lab as an innovation space instead of building its own.  Working together with FinTechs and regulators, the bank may pose problem statements and run proofs-of-concept (POCs) in an environment that replicates its production, making it easier for the bank to validate the intended outcome of the solution before launching into actual procurement and production.  The bank can safely evaluate the impact of opening up certain APIs to the industry, by using a synthetic representation of the data.  In this way, the bank will be able to see the types of innovations that publishing the data would enable.

Not just a testing ground, the Digital Lab is also a marketplace to build the digital community.  Users such as FinTechs can create profiles and showcase key features (e.g. funding raised, clients served, etc.) to seek investors and business opportunities.  Certification tools to validate listed APIs and solutions (in accordance with the standards published by ADGM) will be available on the platform, as well as noticeboards, collaboration tools and innovation challenges, all within a digital environment.

Looking ahead, there is a sense that FinTech innovation will take on an accelerated significance in the UAE and the wider MENA region.  Under the leadership of the UAE Central Bank, with its FinTech office now operational, we can expect a slew of initiatives to be rolled out in support of the FinTech ecosystem.  At ADGM, we want to play a part by offering the Digital Lab as a trusted and collaborative marketplace for experimentation and PoCs, to build the enablers for the digital economy and the next generation of financial services.

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