Abu Dhabi: Abu Dhabi Global Market (ADGM), the emirate’s financial free zone, said it has received “robust” interest from local and international players in the financial technology (Fintech) market after announcing its aim to turn Abu Dhabi into a Fin Tech hub.
ADGM will also be speaking to potential partners from the US, Europe, China, and the region to develop a conducive ecosystem for Fin Tech in Abu Dhabi, according to Richard Teng, chief executive officer of ADGM.
Earlier this month, Ahmad Al Sayegh, chairman of ADGM, said authorities in the emirate are planning to work on a framework to govern the Fin Tech sector in order to turn Abu Dhabi into a regional Fin Tech hub.
The chairman said that global investments in the sector quadrupled to $12 billion in 2014, with the figure likely to multiply in the years to come. However, GCC countries were still lagging behind in terms of their investments in the sector.
Speaking on Wednesday at the Alternative Investment Management Summit, ADGM’s CEO, Teng, also discussed the asset management industry and its “exponential growth” potential, especially if firms deploy new technology.
“Although we will continue to experience bouts of market stress and volatility, AUM (Assets Under Management) and the asset management industry [are set] for very robust growth moving forward. Global AUM is expected to grow at six per cent annual CAGR (Compound Annual Growth Rate) from $80 trillion to reach $102 trillion by the year 2020. And more significantly, you are in a sweet spot as alternative assets are expected to grow at annual CAGR of 9.3 per cent till 2020,” he said.
Teng pointed out that AUM doubled in the past decade, with the longer-term picture being even more striking. In the US alone, AUM increased almost five fold relative to gross domestic product since 1946 from around 50 per cent of GDP (gross domestic product) to nearly 240 per cent now.
Despite the significant value of assets, firms in the asset management industry don’t deploy as much technology as other sectors, the CEO said, adding that Fin Tech can transform the industry and lead to higher efficiency and lower margins.
