Dubai: Dubai International Financial Centre’s (DIFC) new $100 million (Dh367 million) FinTech fund, which will come from internal resources, will support Fintech Hive start-ups in Artificial Intelligence, blockchain, robotics, DIFC governor Essa Kazim said on Tuesday.
He was speaking at the Global Financial Forum, which was opened by Shaikh Maktoum Bin Mohammad Bin Rashid Al Maktoum, Deputy Ruler of Dubai and the president of DIFC.
DIFC thinks that fintech is “underserviced” and the allocation of funding going into this new business is “very very limited” in the MEASA region, accounting to less than 1 per cent of the total.
“We are ready to spend the money. But it will depend on opportunities and if it makes commercial sense,” Kazim told reporters. “We want to consolidate the position of the DIFC and to be at the forefront of the changes that may happen in the financial sector.”
The fund can grow bigger, Kazim said.
“We have been talking with some government departments at federal level, or local level. If the interest materialises into anything then definitely the structure of the fund will be different,” he said.
“We don’t mind having other entities mainly government or semi government entities to participate in this fund. Today the fund is sufficient to support our own initiatives whether it is development of Fintech hive, the type of companies that are going to be supported by accelerator,” Kazim added.
Importance of Fintech
The 2024 strategy, which was a 10-year plan of the DIFC to triple its size, was launched 3 years ago, but Kazim didn’t envisage that Fintech would have been a part of the strategy, when the announcement was made.
“There is a new order that global financial services industry needs to navigate ... the new alliances are being forged. The rapid emergence of advanced technology in all areas of finance is creating shifts like never before in the industry,” Kazim said.
Updating on the achievements made so far in the 10 year strategy rolled out in 2015, Kazim said “We are on track (in terms of meeting targets for the 10 year strategy). In certain areas we have passed our targets, but other areas we are lagging behind in area of employment. Although the number of licenses are on track attracting companies, but there is a little lag (not significant) in terms of employment,” said Kazim.
Falling oil prices has not been a negative for the center to attract businesses. Before the drop in oil price, the DIFC licensed 150 companies a year on an average, after that the average jumped to 300 companies.
“That (funding) element has encouraged banks to really expand their balance-sheet and provide credit to regional governments. Governments have been active in issuing bonds and sukuk and that also encouraged financial activities in the DIFC,” Kazim said.
DIFC also hopes to attract more asset managers, financial institutions from India and China.
Regarding competition from other financial centers, Kazim said “competition is always there. The UAE was built on competition and on market forces. We have 5 airports, and 7 ports, and financial activity is one of those things. We don’t fear competition, and it is always good.”