Arab #FinTeX Symposium - H.E. Governor Opening Remarks
Honored guests, ladies and gentlemen, good morning, and welcome to this
symposium on Blockchain and Financial Inclusion.
I think we can all agree that FinTech is radically changing the financial sector. Rapid
advances in digital technology, from artificial intelligence, cryptography to
distributed legder technology are already revolutionizing the way financial services
are provided. This ranges from the (1) collection and processing of financial
information, (2) the way saving and borrowing is executed, (3) the channels for
payment of goods, and (4) money transfers between wallets and accounts, both
domestically and across borders.
FinTech companies are increasingly offering technology-enabled solutions that can
better address customer needs and preferences by offering enhanced accessibility,
convenience and tailored products. By responding to consumer needs for security,
trust, privacy and lower cost services, the FinTech industry is poised to affect an
array of financial services in a big way.
More widely, I believe that FinTech has the potential to enhance financial inclusion
and unlocking SMEs and microenterprise' access to financing. This is a critical
aspect in driving private sector growth and further economic diversification across
many countries, including the UAE.
However, as exciting as these developments are, as a Central Bank we must always
be mindful of our primary goal of maintaining both the safety and soundness of the
banking system, and adequate levels of consumer protection. And to that end
FinTech presents both challenges and opportunities for consumers, financial
service providers and regulators alike.
The Central Bank (CBUAE) is currently in the process of developing a Fintech
Roadmap that aims to build upon the many successes of the UAE FinTech
ecosystem, and to cohesively deploy more balanced regulatory and development
initiatives to ensure a healthy and sustainable Fintech ecosystem in the long term.
This roadmap will be underpinned by a balanced regulatory framework that
protects consumers and maintains institutional safety and soundness on the one
hand, but does not stifle innovation on the other. At the same time, we must find
ways to ensure that supporting public and financial infrastructures are put in place
within the ecosystem for sustainable innovation to flourish.
As a strong advocate towards the UAE's innovation and FinTech agenda, the CBUAE
has developed and launched multiple initiatives to help advance applications of
technological innovation that will collectively benefit every stakeholder in the UAE
economy. Allow me to name a few:
 First, the Central Bank has finalized and is in the midst of implementing the
National Payment Systems Strategy. It aims to create a secure, future-proof
payments ecosystem that best supports the UAE digital economy and cashless
society objectives. To this end, the CBUAE will be working with multiple
authorities, global and domestic payment providers and FinTech firms to create
consumer-centric, cost-effective and safe e-payment solutions.

Second, the Central Bank has also issued regulations for stored valued facilities
offering specific digital payment services. This set outs clear requirements to
facilitate the advent of convenient and accessible digital payment services to all
consumers, in line with the CBUAE financial inclusion agenda.

Third, the Central Bank is also in the midst of finalizing its crowdfunding
regulation. It seeks to provide regulatory clarity for the operations of
crowdfunding platforms. More importantly, it aims to strengthen necessary
safeguards to ensure adequate consumer protection and robust disclosure
requirements when such platforms serve the UAE market in a larger scale.

Fourth, the Central Bank in collaboration with Saudi Arabia Monetary Authority
(SAMA) is undertaking a unique, joint project - leveraging on blockchain and
cryptography - to issue a joint digital currency accepted in cross border
transactions between two countries. A Distributed Ledger Proof of Concept
(PoC) to facilitate such cross border settlements is already in put into motion.
The PoC's design involve using digital currency backed by fiat currencies of the
two nations. This is probably the first time ever we witness such cooperation in
this policy front. We hope that the potential success of this initiative will foster
similar collaboration in the GCC region and globally.
In the wider UAE context, we have also seen the rapid growth of Fintech-related
activities in both onshore and in the two offshore financial centers. These include
the regulatory sandboxes managed by financial free zones which have enabled for
the experimentation of innovative financial services technologies within
predefined boundaries.
As we navigate through the evolving ecosystem, we believe that constant, close
engagement with regulated businesses, FinTech firms, regulators and other
stakeholders is crucial. Clearly, ongoing dialogue and collaboration are the best way
to ensure industry players are aware and able to navigate the applicable rules.
In addition, we must also ensure that supervisors are well-equipped to identify,
assess and tackle potential risks associated with FinTech. I cannot stress enough,
the criticality of domestic and international cooperation in this area. We can, and
should, work to find common approaches to such risks and share best practices.
With any new financial product or service that is introduced to the marketplace,
we have a responsibility to ensure that the potential risks are clearly identified and
measures to mitigate those risks put in place. Financial consumers should not be
the 'laboratory mouse'.
Experience has taught us that unexpected problems will still surprise us from time
to time despite our best supervisory and regulatory efforts. Such potential risks
should not necessarily impede progress; but we must have the foresight to ensure
these risks are well managed. The technologies may be new, but most of the risks
are similar. Regulators and consumers must be assured that risks to stability and
integrity - including from cyberattacks, money laundering and terrorism financing
- can be effectively managed without impeding innovation growth.
As has been well articulated, Fintech has the potential to offer services across the
country, to all segments of society equally, at less cost and with more convenience
in making finance transactions.
Overall we aim to facilitate the adoption of safe, secure, consumer-centric and
innovative digital payments services. Indeed, the legal mandate of the Central Bank
UAE, also now specifically includes a provision on financial inclusion.
In a very strong statement from the UAE government, the law states, and I quote,
that we shall "establish necessary regulations and mechanisms to ensure that every
natural person shall have the right to access all or part of the banking and financial
services and products from Licensed Financial Institutions suited to his/her need".
To this end, we undertaking transformative changes to CBUAE's consumer
protection department. The department will bring a clear focus on consumer
protection, consumer education, literacy and awareness and promote inclusion. All
of these components of consumer protection should be a very important part of
the dialogue at today's conference.
I would like to highlight that solutions for expanding access to appropriate financial
services through mobile banking and other forms of branchless banking tend to
enhance the convenience for customers. However, they do not necessarily target
the unbanked segment of the population.
We should therefore be looking to find and promote breakthrough FinTech
innovations that target the unbanked segments of the population, enhance the
degree of financial inclusion and reduces the costs of cross-border remittances.
Let me conclude by welcoming you again to the conference. And I wish you all a
constructive and insightful discussion over two days.
Thank you.