SMEs deemed to benefit from the UAE-Israel landmark FinTech agreements

The UAE and Israel have inked three major pacts that will not only further strengthen both countries’ positions as financial technology hubs in the world but also open up new avenues in terms of market infrastructure, liquidity, and financial services. These agreements will also propel the startup ecosystem further and allow entrepreneurs from both countries to chase their business goals. 

The FinTech cooperation agreement between Abu Dhabi Global Market Financial Services Regulatory Authority (ADGM FSRA) and the Israel Securities Authority (ISA) will facilitate the movement of startups and transfer of knowledge and talent between the two countries. Moreover, the deal between DIFC FinTech Hive, the largest financial technology hub in the Middle East and part of Dubai International Financial Centre (DIFC), and Israel’s FinTech-Aviv will promote economic growth by strengthening their respective fintech sectors and adopting new technology. DIFC has also teamed up with Bank Hapoalim, one of Israel's largest banks, to encourage cooperation across financial services.

Launched in January 2017, FinTech Hive has already witnessed phenomenal growth with its ecosystem growing thrice in size in 2020, benefitting more than 50% of all FinTech businesses in the Gulf region, including startups, scale-ups, and entrepreneurs that operate from DIFC. The signing of agreements will give the regional economy the much-needed fillip from technology and innovation sectors and increase access to FinTech-Aviv’s growing community.

“The FinTech market in Israel is oriented primarily to markets in the US, Europe, and Asia. The Arab market holds potential, and these agreements are a leap forward to explore that. With any new collaboration, as you widen market access and reach for local players internationally, it will only lead to more opportunities. We are seeing new funds that are being set up to co-invest in opportunities in both countries and both regions,” Richard Teng, Chief Executive of ADGM's Financial Services Regulatory Authority, was quoted telling The National newspaper.

The agreements between the two countries are being viewed as a roadmap for talent development and facilitating mutual introductions and referrals for firms with potential. Above all, SMEs will gain multiple benefits from these agreements, such as funding, more opportunities for peer-to-peer lending, machine learning, personalized insurance solutions, and the use of AI for business management. Overall, the deals will give the much-required impetus to the tech-driven enterprises looking to expand and make a mark in the UAE. 

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