FinTech - the DIFC is a Hive of activity

Raja Al Mazrouei is confident that the FinTech Hive at DIFC will accelerate innovation in the region and put it on par with other such hubs around the world.

HI-TRAC
The author's shorthand for Happiness Index, Infrastructure, Talent, Regulations, Access and Capital. The six pillars that make UAE a strong business destination. This week, the focus is on Infrastructure
The joint State of FinTech report by Payfort and Wamda indicates that since 2013 the number of FinTech startups in Mena's ecosystem has more than doubled from 46 to 105.
An excellent infographic put together by Call Levels and Savvy Beaver (http://tinyurl.com/BridgeDFS1) indicates that nearly $50 billion has been invested in FinTech in the five years from 2010 to 2015. But the most interesting fact is that the sum value of 145 startup unicorns is worth more than Google and this number trails not far behind Apple. Think about that. Small companies are profoundly changing the way we pay, save, borrow, lend. Bank, card networks and the financial markets are recognising this.
Tying back to the State of FinTech report, demand from FinTechs from Middle East and North Africa is about one per cent of the global investment in FinTech. Clearly, encouraging demand and generating investment would benefit the region immensely.
Recognising this, the Dubai International Financial Centre (DIFC), the financial hub for the Middle East, Africa and South Asia (MEASA) region, announced the region's first FinTech accelerator in January 2017. The opportunity in the MEASA is massive with conservative estimates indicating that over 70 per cent of people remain unbanked. The intent is to penetrate this opportunity. This can be achieved by increasing the share of investments in the region versus the global value by creating a platform that drives innovation and showcases success - identifying leading technology entrepreneurs and companies through a competitive process and then offering them the platform to develop, test and modify their innovations under the guidance and mentorship of top executives from DIFC and regional financial institutions.
FinTech Hive at DIFC will play a key role in this area. A key component of Fintech Hive at DIFC's initiatives is its accelerator programme. By May 28, 2017, the inaugural cycle accelerator programme had received over 100 applications from more than 32 countries. The majority of applications have come from the UAE, UK, US, India, Nigeria and Singapore, and cover a range of concepts including big data and analytics, the blockchain, payments, P2P and crowdfunding, roboadvisors, and mobility.
In addition to guidance by leading executives from Citi, Emirates NBD, Emirates Islamic, HSBC, Mashreq, RAKBank, Standard Chartered, and Visa, as well as senior representatives from DIFC Authority and Accenture, the programme will also provide access to mentorship from leading technology partners such as Facebook and Envestnet | Yodlee. Facebook will run an independent mentorship workshop for startups, providing advice on monetisation, growth and engagement, development and marketing tools, and analytics. Envestnet | Yodlee will provide developers with access to Application Program Interfaces (APIs) to build innovative financial applications and services. An intensive evaluation and shortlisting process has started. DIFC, Accenture, and partnering financial institutions will assess the applications based on whether the proposed innovation is unique, fills a gap in the market and meets industry needs.
The top applicants will be selected and interviewed, from which up to 10 finalists will be selected on July 11, 2017. The programme then formally begins on August 21, 2017. Following 12 weeks of mentorship and co-working sessions with leading local and international financial institutions, successful applicants will get to present their work in the form of a demo day among potential investors.
Raja Al Mazrouei, Acting Executive Vice President of FinTech Hive at DIFC, said: "We are delighted that FinTech Hive at DIFC has attracted applications from startups in the UAE and across the world. With more than $23.2 billion invested in global FinTech deals in 2016, the programme is energising the market by linking innovative tech thinkers to financial industry leaders in an ecosystem that accommodates the full supply chain. We are encouraged by the high calibre of applications, and we are confident that FinTech Hive at DIFC will accelerate innovation in the region and will put us on par with other FinTech hubs around the world."
Reinforcing its commitment to the FinTech community, DIFC hosted a FinTech R/Evolution event at the end of May 2017 to engage members of the financial and technology industries. Raja Al Mazrouei opened the event with an overview of the Centre's FinTech initiatives.
In his keynote speech, Peter Smith, Managing Director, Head of Policy and Strategy, Dubai Financial Services Authority, outlined the advantages of the recently launched Innovation Testing Licence (ITL). This restricted financial services licence will allow qualifying FinTech firms to develop and test innovative concepts from within the Centre, without being subject to all the regulatory requirements that normally apply to regulated firms.
The DFSA will work with applicants to understand the business proposal and establish the appropriate controls for the safety of any customers involved, on a case-by-case basis.
Much has been achieved by FinTech Hive at DIFC in a very short time. Initiatives such as the accelerator programme will help further develop the right ecosystem for financial technologies to grow and thrive in the MEASA region. Anecdotal feedback indicates a high level of interest from established hubs like London and Singapore. Looking forward to investments in the region's FinTech initiatives taking their rightful place within the global context. Wishing the team at FinTech Hive at DIFC all the very best.
 The writer is a Partner at BridgeDFS, a bespoke financial advisory firm (www.bridgeto.us). He's a digital banking and digital banking financial services evangelist, practitioner, advisor and consultant. Views expressed are his own and do not reflect the newspaper's policy. He can be contacted at ves@vyashara.com.