Treasurers with stakes in the Middle East and North Africa (MENA) region, and requirements to work within Islamic finance rules, will be pleased to learn of new efforts to apply that ethical framework to the region’s fintechs.
With growing numbers of treasurers and other finance professionals using fintech tools to enhance their cross-border activities, the sector is striving to adapt to a variety of national and regional rules systems.
At the same time, fintech is gradually helping to broaden financial inclusion, providing the conditions for entrepreneurs and corporates to enter emerging markets.
In light of those factors, major UAE financial hub Abu Dhabi Global Market (ADGM) has formed a strategic partnership to nurture the development of Islamic finance ethics in fintech platforms.
In a MENA-wide initiative, ADGM will work alongside global think tank the Responsible Finance & Investment Foundation (RFI) to track emerging fintech trends and support the development of innovative, sharia-compliant firms aiming to work in the region.
In a statement, the partners said that strategic collaboration and joint efforts provide an economic area with a “significant advantage” for cultivating entrepreneurship.
As well as fostering a culture of ethical and responsible investment, the organisations will identify opportunities for sharia-compliant fintech services and Islamic finance activities for the region and beyond.
In addition, they will enable investors, fintech entrepreneurs and innovators to test and introduce innovative products, services and solutions within the structured environment of ADGM's RegLab programme.
RFI CEO Blake Goud said: “Fintech has a major opportunity to transform how Islamic financial institutions connect with their customers and promote a unique and differentiated approach to financial services.
“We are optimistic that this partnership with ADGM – building on the regulatory environment they have created in Abu Dhabi – can encourage and support emerging fintech companies to adopt ethical, responsible and Islamic approaches.”
He added: “We look forward to working with ADGM to expand responsible fintech in a way that encourages more equitable, inclusive and sustainable growth.”
Richard Teng, CEO of ADGM’s Financial Services Regulatory Authority, said: “Fintech has been progressively shaping and enhancing Abu Dhabi and the region’s technology reach and financial ecosystem.
“This partnership and collaboration… feeds well into ADGM’s mandate of maintaining a conducive financial environment that nurtures innovation, promotes market transparency and trust, and encourages sustainable growth and stability.”
The partnership follows similar efforts in Dubai to boost the compatibility of Islamic finance with fintech platforms, as The Treasurer reported in July.