Since its inception in 2015, Abu Dhabi Global Market (ADGM) is a clear example of the city’s aspirations to create a strong financial and trading hub. Since its inception in October 2015, it has successfully established a sound and progressive jurisdiction and business platform that augment Abu Dhabi’s position as a global trade and financial hub.
As October is Abu Dhabi Global Market’s (ADGM) five-year anniversary, The FinTech Times exclusivity speaks with Richard Teng, CEO of the Financial Services Regulatory Authority (FSRA) at ADGM. Mr. Tang reflects on the successes, the 2020 landscape, and future aspirations of ADGM.
The following summarises the key highlights during the interview. The full interview can also be viewed below:
Despite the current global challenges, what has been going in the Abu Dhabi fintech landscape in 2020? And specifically, with ADGM (successes, partnerships, events, other announcements)?
We continue to drive the agenda. I do think that the COVID-19 situation has compressed the timeline for digital deployment and adoption, which are key beneficiaries, and you see a huge uptick in terms of technology adoption, in terms of fintech deployment, which are really necessary, because if you look at the lockdown situation, there is no way to deploy and deliver products and services. Therefore, to deliver those products and services to operate via digital and even on onboarding basis is necessary. How do you do KYC? How do you do lone assessment? A lot of them have to be digital. And this crisis has shown us that despite what many financial institutions see in terms of their digital journey, how advanced they are, that being caught up quite short. So instead of relying on in-house solutions, I think most are tending to extend the solutions to shorten the timeline in terms of rolling out a digital format.
I think our growth story, our trajectory has demonstrated our success in the past five years. We have won many awards. Four times in the past four years, we have won “best financial center” for the Middle East and Africa region. We won twice this year as the best international financial center in EMEA region and our track record in innovation and how we support fintech is a testament to what we have done so far.
Did you ever image that from when ADGM was founded in 2015 it would get to be where it is now? What have been some of those successes up until now?
There are multiple successes. With fintech, we started talking about fintech when this was not commonly known or should be the first regulatory sandbox in the Middle East Africa region and by now is a hugely successful program attracting international participants – ours is the second most active regulatory sandbox globally.
And we have since moved from strength to strength in terms of experimentation, both with fellow regulators from the United States, Australia and Singapore. And along the way, we have created the widest offering of digital financial services license.
We created the first calibrator venture capital manager framework for the region. That is effective, robust because of the huge interest that we’ve seen both before and after. we deploy robots to help Africans fill in application forms to shorten the timeline from the market and many of these venture capital, many to realize the huge potential they have solved and they are using it as a project investment into the region. So we are looking at a whole ecosystem.
It is not our efforts alone. We are working very closely with Mubadala Abu Dhabi Investment Office and many others to create a very conducive environment, not only from a regulatory angle, but also from the startup funding ecosystem building. So we are creating that very vibrant hub – simply one that is very important, but that is strongly supported by Mubadala, Microsoft, Softbank, Abu Dhabi Investment Office and ourselves. And that has created a very vibrant startup ecosystem.
In your role as CEO, as well as on a personal level, how have you seen Abu Dhabi also grow alongside ADGM?
We are not the first financial centre, there are many others. But when we start looking at the entire ecosystem, we realize that there are gaps. And because of those gaps it’s not only following purely other solutions in other financial hubs like London or Singapore but to follow and create our own innovation. It’s very important for the betterment of this region. Financial businesses get the importance and what they are looking for is how to create a well-rounded and a complete ecosystem. It is not only from the rules and regulatory front, but from ecosystem as a whole.
We went about in a very deliberate fashion, for instance, we have the Middle East as an excellent place to come to raise funds and we have developed into a premier destination holistically. We have three of the largest global airlines as well, but we have not developed into an aviation financial hub, so there are gaps in the ecosystem, and we went about it strategically. It is the same with fintech.
We have regulators supporting themselves, involved with the institutional investors and sovereign wealth funds in investing to do more, Mubadala has come up with catalyst funds, Tech funds – similar to ADGM and the Abu Dhabi Investment Office. So all of those are providing funding to that critical funding.
We host the largest gathering of fintech in the region, so this year we will host the fourth fintech Abu Dhabi summit – the Fintech Abu Dhabi Festival.
A three-day event from the 24th – 26th November, last year we had more than 5000 participants, more than 130 speakers, close to 20 unicorn’s around the world attending. This year, we are very fortunate that the UAE Central Bank will be hosting this event together with us to really drive the agenda of the region. This year is going to be a much bigger issue in terms of what is a better life. It is the largest fintech festival yet and we have several components to that, including the first day with company founders, the way do matchmaking between fintech firms with sources of funds be it Angels, private equity – to name a few.
Today we have an entire country, we bring the top 200 firms around the world here, we have our innovation challenge by every fintech working alongside corporate champions such as the banks that are used to solve problems. We have an exciting line up of speakers and ourselves. And the Central Bank have many initiatives that we are going to announce, exciting initiatives that we are going to allow students to join. And we are going to have a very successful regulatory sandbox.
But it has regulators like ourselves and the Central Bank working alongside to really support companies. And it will really bring about a different dimension in terms of allowing them to work much closer together, allowing financial institutions to source for solutions on a much faster basis and to integrate it into their own system. We are very excited that we’re going to launch doing this during the Fintech Abu Dhabi Festival.
Richard Teng, CEO of the Financial Services Regulatory Authority (FSRA) IMAGE SOURCE PROVIDED
What differentiates ADGM from other regional hubs in the region? And what attracts talent and investment here?
There are many differentiating factors. The first and key differentiating factor is Abu Dhabi. We are blessed to have very strong value proposition – the best in the region. The strong connect with the excellent business environment with a great lifestyle.
ADGM has proven itself to be the most innovative. It’s in our DNA. The industry needs to support financial intermediation. So unlike many other financials for us, I think that focusing on debt, really, how do you help financing for the betterment of this?
As a result, we are looking at areas of how we help sustainable finance. We have many good projects to boost our financing needs, meeting the investor’s needs, as well as the need for the financial institutions. So, we have CITIBANK, BNP Paribas and the rest of the financial institutions that are providing sustainable financing for the first green investment bank loans. We are along the different pillars, working alongside not only government but with the funders, financial institutions, and SMEs.
We find this is a financial asset to really bring about solutions for them, for the betterment of this, and the more we do it, the more critical mass they do, the more traction we had is going to benefit not only ourselves, but the region. Most people realize that this Intercontinental Exchange, the largest exchange in the world, has now partnered with ADNOC to launch ICE Futures Abu Dhabi, a New Futures Exchange. This wouldn’t be possible in the past.
Where do you see ADGM in the next five years when you celebrate your ten-year anniversary? Also beyond?
ADGM is the fastest growing international financial center in this part of town. If you look at the number of venture capital management coming into Google, I would say that in the course of data centers in the region, again, we continue to grow rapidly. In another five years’ time, we will continue to grow in critical mass. We continue winning allocates along the way, and I’m sure both the investing community will find Abu Dhabi the most ideal place for them to have a hub to cater to a fast-growing Middle East Africa and Asia market.
We do have a China office and we are seeing strong flows from Asia Pacific. We are seeing strong flows from Europe and the US as well. And that’s really what they’re trying to do, is to bring the world here, to make the world realize that, look, this is the fastest growing region in terms of young adults coming into the workplace over the decades from this effort is going to surpass the young adults coming into their own place in China.