ABU DHABI / WAM
The Financial Services Regulatory Authority (FSRA) of the Abu Dhabi Global Market (ADGM) has announced local and global applications to establish digital banks in its International Financial Cen-tre based in Abu Dhabi as digitalisation has led to a rap-id transformation of the banking industry.
This initiative comes in response to regional and international enquiries seeking a proven and conducive ecosystem that fosters opportunities and market development. With innovation, supporting growth and anchoring activities in Mena for the benefit of the region as its ethos, ADGM provides an ideal jurisdiction and environment for the digital bank model.
A digital bank is one that accepts deposits, and carries on other related financial services activities, primarily through online, digital or electronic means rather than through physical interaction with customers. Digital banks are financial institutions that seek to provide novel customer and transactional solutions. The FSRA is of the view that, amongst others, digital banks in ADGM will add significant value to the SME, corporate and wholesale sectors and further contribute to the development of the overall financial ecosystem, promoting inclusion, and enhancing financial services and intermediation in ADGM and more widely.
Richard Teng, Chief Executive Officer, FSRA of ADGM, said, “This announcement and the Guidance comes in response to substantive interest from the industry, and demonstrates ADGM’s track record in advancing innovation and supporting growth while managing risks to promote a strong and sustainable financial ecosystem. Digital banks can address the needs of many segments that are currently underserved by conventional institutions, such as the credit gap faced by small and medium enterprises.”