UAE-Israel Business Leaders Summit: Fintech innovation cannot grow in an over-regulated environment
Gradual approach to creating regularoy framework will best suit sector
Dubai: UAE regulators are concerned that laws aimed at overly regulating the space for fintech firms could hamper innovation.
“When it comes to regulation, fintech companies are entering a heavily regulated space,” said H.B. Lim, Director, Financial Services Regulatory Authority, Abu Dhabi Global Market. “We need to strike a balance between not overly burdening them with regulations, and also trying to promote innovation.”
Speaking at the first virtual UAE-Israel Business Leaders Summit, co-hosted by Gulf News and TheMarker “We need to strike a balance between not overly burdening them with regulations, and also trying to promote innovation.”
► Register for The UAE-Israel Business Leaders Summit 2020
In 2016, ADGM launched the Middle East region’s first fintech sandbox called the ‘Regulatory Laboratory. “This is really a controlled environment where fintech startups can come in, get licensed but with a limited number of customers and operations,” said Lim.
On the topic of Israel, Lim said by cross introducing fintech startups between UAE and Israel, both markets will benefit from a stronger pipeline of companies. “We don't just offer the UAE market - we are a gateway to the wider region," he said. "So, Israeli startups can explore us for the MENA region, and similarly UAE startups can explore Israel as well.”
Need for change
“If we really want to incentivize fintech companies to be licensed here, then adopting foreign regulation as a standard into Israeli regulation is the main road,” said Yael Weiss Efron Innovation Manager, Israel Securities Authority. “I'm sure that within the scope of the talks already happening between regulators in the UAE and Israel, some kind of dual listing arrangements will be considered.”
Beyond funding
“Fintechs need funding, they need access to markets - but there is a lot more fintechs are looking for,” said Ken Coghill, Associate Director, Head of Operational & Technology Risk Supervision, DFSA. “They are technology-based companies, but they need people to meet and engage with other market participants.
They need to build the relationships. So, it goes beyond just being able to provide funding.”