The Middle East and Africa have ‘huge upside’ in digital transformation: Abu Dhabi Global Market

The Middle East and Africa have seen many changes in terms of digital transformation, but there’s still “huge upside,” and financial technology firms are looking for opportunities there, according to a financial services regulator in the region.

“Compared to a few years ago, now, we have a very vibrant marketplace,” said Richard Teng, chief executive officer of Abu Dhabi Global Market’s Financial Services Regulatory Authority. However, the “very sizable” market is still “underserved,” he added.

Different forms of financing could “work very well” and represent a new engine of growth, Teng said.

“We are seeing a lot of fintech companies, looking at the opportunities that I mentioned — 1.6 billion people — which have huge upside in terms of digital transformation, wishing to make a difference in that region,” he said.

Separately, Teng said regulators have not done enough in the cryptocurrency market.

“Most regulators have not spent enough time looking at the area of fintech,” said Teng. “Most of us have made positive noises, but how many of us have devoted enough attention, resources into that area? I would say only a few.”

But Facebook’s announcement of its new digital token, Libra, “forces” central banks and regulators to take a “serious look” at cryptocurrencies and blockchain, he said.

“I think we have put it off for too long,” he said, adding that the industry needs to be “properly regulated” in order to go mainstream.

Referring to Abu Dhabi Global Market’s crypto regime, he said the financial center makes sure that custody risk is properly addressed.

“Last year alone, you have a billion worth of coins that are lost or stolen, and that impact(s) confidence in this marketplace,” he said. When it comes to investor protection, addressing the risk properly is “always paramount,” Teng said.

Aside from security concerns, he said, it’s also important to have an attitude that supports innovation. “We need that to make life better, to make life easier, to transform the way financial services are being delivered. ”