The ‘platformisation’ of capital markets, or the adoption of ‘platform ecosystems’ as they’re generally recognized within the massive tech sector, is going on proper now within the UAE and alternatives abound for progressive market gamers that may lead or take part within the course of.
The UAE’s economic system has been quickly creating for many years. Because the nation seeks to fund the subsequent stage of progress past fossil fuels, the time has come for the native growth of capital market platforms to allow the allocation of capital to desired sectors and initiatives significant for sustainable financial prosperity.
Whereas the informational nature of capital markets is extensively acknowledged, the efficiency of recent monetary applied sciences (fintech) to extract worth from data has develop into such that market constructions and enterprise fashions are being reworked quickly. We learn within the information final month, for instance, that Goldman Sachs is transferring into the cloud computing enterprise. In partnership with Amazon Net Providers (AWS) and after two years of preparation, the funding financial institution is opening up entry to its trove of market information and software program instruments to hedge funds and asset managers.
The worldwide banks with presence within the UAE could have been the standard importers of market innovation however in all probability lack the identical dedication to R&D and curiosity to supply their experience in an open platform.
This presents a major missed alternative. As London Enterprise Faculty’s Professor Michael Jacobides noticed in Within the Ecosystem Financial system, What’s Your Technique?, there’s an abundance of alternative introduced by the confluence of know-how and enterprise ecosystems (HBR, September–October 2019): “In ecosystem competitors, success is as a lot about serving to different companies innovate as it’s about being progressive your self. Firms which have constructed a profitable ecosystem have typically achieved so incrementally, broadening the worth proposition of their core providing by discovering alternatives to use certainly one of its options or functionalities to some beforehand unrelated services or products… Competing is more and more about figuring out new methods to collaborate and join quite than merely providing various worth propositions… We should shift from inflexible methods primarily based on prescriptive frameworks to dynamic experiments primarily based on a strategy of inquiry.”
This time round, the native stakeholders appear decided to provoke market innovation themselves with the institution of regulatory frameworks and the launch of platforms of systemic significance.
Extra particularly, the UAE regulatory authorities collectively issued final month the Pointers for Monetary Establishments Adopting Enabling Applied sciences setting out one of the best practices when adopting enabling applied sciences for the event of progressive services and products. The enabling applied sciences thought-about are: Utility Programming Interfaces; Massive Knowledge Analytics and Synthetic Intelligence; Biometrics; Cloud Computing; and Distributed Ledger Expertise.
Past coverage, we see in motion market gamers throughout the total spectrum experimenting, efficiently and never, with the event of capital market platforms within the UAE.
On one hand, we’ve got builders of digital asset (crypto) platforms the potential of which, for my part, is extra restricted than fans respect and the combination with the true economic system much less apparent.
On the extra systemic finish of the spectrum, the UAE Central Financial institution, for instance, just lately launched the M-Payments platform changing the traditional certificates of deposit. These securities might be auctioned and traded via Bloomberg’s major and secondary market options and settled via a neighborhood platform constructed and operated by Euroclear Financial institution. In one other main challenge, the UAE-headquartered Arab Financial Fund has launched Buna, a centralized multicurrency platform aiming to allow monetary establishments to make cross-border funds throughout the Arab area and past with the last word goal to allow the combination of the Arab economies.
The UAE marks its golden jubilee this 12 months and is extensively acknowledged that it has develop into a monetary powerhouse that’s serving to to form the fortunes of the GCC international locations and the broader Arab world. And it’s these highly effective adjustments to the capital markets, mixed with adaptable regulatory coverage frameworks, tech savviness and an ever-increasingly markets openness, which is able to underpin the rising fortunes of this dynamic economic system.
Dimitrios Vourakis, Chief Technique Officer, Wethaq Group.
This text initially appeared in Arabian Enterprise.