“The Dubai Financial Services Authority (DFSA) and the Securities and Futures Commission (SFC) in Hong Kong [have] entered into an agreement to establish a framework of cooperation on fintech innovation,” Finextra
This is an extension of a pre-existing relationship to maintain high standards of cooperation. Both are signatories to the International Organization of Securities Commissions Multilateral Memorandum of Understanding, and they also entered into a bilateral memorandum of understanding in 2008.
The agreement – signed by the DFSA’s chief executive, Ian Johnston, and the SFC’s chief executive, Ashley Alder – will strengthen the efforts of both authorities to “develop an innovations-friendly ecosystem in their respective markets”.
Under the terms, both will share information regarding fintech developments and innovations, and will encourage fintech firms that are seen as innovative to enter each other’s markets and provide regulatory guidance.
Fostering innovation in the Dubai International Financial Centre (DIFC) is a strategic priority for the DFSA, Johnson is quoted as saying by Finextra
. Alder adds that the agreement underscores the SFC’s intention to both strengthen regulatory collaboration and promote innovation within their sector.
This is just the latest step in the DFSA’s innovation strategy. On 24 May 2017 it launched the Innovation Testing Licence, which allows fintech firms to develop and test the DIFC’s fintech concepts.
The agreement also follows the launch of FinTech Hive at DIFC, which aims to use innovative technological solutions, via the next generation of leaders and entrepreneurs, to address the growing needs of the region’s financial services sector.
Dubai taking on San Francisco and Singapore
It seems as if this strategy is working. A report by CNBC’s Silvia Amaro and Willem Marx says that Dubai has seen a “surge of interest” from fintech start-ups in the past three years.
Arif Amiri, the DIFC Authority’s CEO, informed CNBC that in three years the financial hub has hosted 715 more companies –1,000 then compared to 1,715 now – and saw banking assets rise from $50bn to $150bn in the same period.
Moussa Beidas, CEO and co-founder of smartphone payment platform Bridg, which is based at the DIFCA, told CNBC: “Dubai has its own unique attributes that the likes of San Francisco and Singapore do not have.
“I think there are very few places in the world where you can get so much in such a small place and yet with so much potential.”
“Dubai has its own unique attributes that the likes of San Francisco and Singapore do not have"
Gareth Lewis, CEO and co-founder of private asset platform Delio, agreed, telling CNBC that “there's a fantastic opportunity in the Dubai region purely around the appetite for private investment”.
Amiri explained to CNBC that the DIFCA supports businesses seeking to tap into emerging markets. He said: “An accelerator acts as a way for them [companies] to really engage in the potential of the market, by introducing cutting-edge technology solution providers from all over the globe, for them to really absorb, examine, test and really adapt.”
The amount of companies taking advantage of this opportunity is only set to swell, Amiri believes. The financial services sector currently contributes approximately 12% to Dubai’s GDP, with that contribution set to be 18% by 2024.
Swiss also seeing value of fintech
Switzerland is also striving for a “dynamic fintech ecosystem”, according to a report by Crowdfund Insider
’s JD Alois.
The Federal Council of Switzerland, the country’s highest executive authority, is sending Ueli Maurer, head of the Federal Department of Finance, on a tour of the Swiss fintech scene to improve awareness and relationships.
Maurer has been a federal councillor since 2009. Prior to his current role he was head of the Federal Department of Defence, Civil Protection and Sport. He’ll be visiting Zug and Zurich to gather information “on current tech topics, risks, opportunities and challenges”.
To help enhance Switzerland’s financial centre through fintech, a decision was made on 5 July 2017 to ease the regulatory framework for innovative fintech providers in order to help them enter the market.
Alois concludes that it is the Council’s plan to carry on monitoring fintech developments closely and “swiftly propose the necessary regulatory adjustments if required”.
Judging by the DFSA’s actions and the Federal Council of Switzerland’s intentions, it seems that the rise of fintech won’t dissipate any time soon. The fostering of fintech innovation in the DIFC should help create another hub where it can flourish, alongside the established financial centres recognising its value too.
Crowdfund Insider article
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