The Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM) has introduced a new regulatory framework for the authorisation and supervision of fintech firms providing third party services to customers of financial institutions.
Third Party Providers (TPPs) are firms that act as intermediaries between customers and the financial institutions that provide services to them in order to help customers manage and use their own data more effectively when undertaking financial transactions.
The new framework will allow and support the improved and holistic management of personal finances by focussing the new regulated activity for TPPs on the accessing, processing and transferring of specific types of customer data, with appropriate regulatory requirements for TPPs in the areas of data protection and privacy of information, conduct of business, technology risk, anti-money laundering and countering terrorist financing.
With the new framework in place, TPPs will be able to work alongside financial institutions in a secure and efficient manner that facilitates customer transactions, whilst protecting the data and interests of those customers.
The new framework will also provide a foundation to support the growth of open finance, with the focus being on giving customers and businesses more control over a wider range of their financial data, such as investment and other financial products. This is all part of ADGM’s ongoing efforts to develop a sound and progressive fintech ecosystem that fosters innovation and new models to deliver financial services.
Emmanuel Givanakis, CEO of the ADGM FSRA, said, “We are excited to launch this new framework, which is based on international best practices. It will help TPPs and financial institutions collaborate in order to serve their customers more efficiently, and it lays the ground for the development and growth of open finance in the region.
“This framework will ensure that customers’ and financial institutions’ best interests are protected by requiring TPPs to be responsible for taking appropriate care of their customers’ data and to ensure that that their systems are robust. We look forward to further innovative developments within ADGM in the same manner that will benefit customers of financial institutions.”
The new framework will cater for a wide range of innovative fintech services that fall under the auspices of the FSRA, thereby supporting Abu Dhabi’s digital transformation agenda and bolstering the growth and diversification of the UAE’s enterprise economy.