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WGS 2018 Examines Opportunities and Risks of FinTech and RegTech |
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The opportunities and limitations of RegTech (Regulatory Technology) and FinTech (Financial Technology) were on the agenda at a Global Policy Platform session on day two of the sixth World Government Summit (WGS 2018) in Dubai, with a high-level panel discussing how policy makers and regulators should employ these technological developments to promote responsible innovation. Headlining the session titled ‘FinTech & RegTech: Revolutionizing Compliance and Promoting Financial Inclusion in Partnership with IMF’ were notable luminaries from the UAE – His Excellency Mubarak Rashed Khamis Al Mansouri, Governor of the UAE Central Bank, His Excellency Essa Kazim, Governor of Dubai International Financial Centre (DIFC), and His Excellency Ahmed Ali Al Sayegh, Chairman of Abu Dhabi Global Market (ADGM). Distinguished foreign delegates included Marco Santori and Ross Leckow from the International Monetary Fund (IMF) and key figures from the financial sector from Australia and Singapore. The session also drew the participation of His Excellency Obaid bin Humaid Al Tayer, UAE Minister of State for Financial Affairs. The marriage of financial technology and regulatory compliance is having a hugely disruptive effect on finance, banking and business worldwide. Distributed ledger technologies, such as blockchain, are making the financial ecosystem more inclusive. However, these technologies also create risks, such as money laundering and terrorism financing. National regulators are putting processes in place to stop this without stifling innovation at the same time. During the session, His Excellency Mubarak Rashed Khamis Al Mansouri highlighted the importance of an inclusive ecosystem. He said: “Financial inclusion is a very important subject for us in the UAE, given the country’s status as a financial and trade hub. It is a challenging issue to tackle, especially when you take into account cross-border considerations, as there are greater complexities and different types of regulations for each jurisdiction. This necessitates more collaboration from financial institutions, regulators and service providers.” The panelists discussed regulatory technology, also known as RegTech, which helps companies big and small to deliver an enhanced user experience through streamlining and automating compliance processes. The field is currently experiencing phenomenal growth with huge demand from both traditional banks and FinTech companies. On the future of FinTech, His Excellency Mubarak Rashed Khamis Al Mansouri added: “Having a central regulator or repository that is credible is going to be the basis for any progress in the FinTech sector. The UAE Government has many initiatives in FinTech already, for example government payments such as E-dirham, which encourage secure purchases. Furthermore, if we are going digital, attention to cyber security will become even more paramount.” Outlining Abu Dhabi Global Market, (ADGM)’s efforts in this space, Chairman Ahmed Ali Al Sayegh said: “ADGM has one of the highest concentrations of FinTech in the MENA region on its premises. We are continuously challenging the industry to come up with solutions for the market.” His Excellency Essa Kazim added: “At DIFC, our focus has always been supporting the government of Dubai. We have been successful in this area if you look at our contributions to the GDP of Dubai. Recently, we launched a US$100 million fund to invest in FinTech start-ups, as well as the FinTech Hive incubator program in January.” Highlighting some of the key policies that need to be focused on FinTech for further progress in the sector, Sopnendu Mohanty, Chief FinTech Officer of the Monetary Authority of Singapore, added: “FinTech is broader than payment and lending. It is applying technology to all asset classes – wealth management, investment banking treasury, etc. Going forward we need to re-examine the talent and ecosystem development as the skills to power this FinTech revolution are quite important. Cyber-security as well cannot be an afterthought – it has to be a discussion on technology that is then built into solutions.” Under the patronage of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, the World Government Summit 2018 runs from February 11 to 13 at the Madinat Jumeirah in Dubai. The landmark event convenes more than 4,000 participants from 140 countries, including heads of state and governments, as well as top-tier representatives of 16 international organizations. Hosting more than 130 speakers across 120 interactive sessions, WGS 2018 features six distinct forums that examine the challenges of vital sectors for the future with a view to finding the best resolutions for the greater global good. Furthermore, over 20 specialized global reports spanning key sectors and topics of the summit are being launched during the event. |
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