The financial authorities of the UAE have taken active steps towards securing the safe adoption of financial technology within the country, whilst also signing two separate Memorandum of Understanding with international regulatory bodies.
The Central Bank of the UAE (CBUAE), the Securities and Commodities Authority (SCA), the Dubai Financial Services Authority (DFSA) of the Dubai International Financial Centre (DIFC), and the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM) have jointly launched a four-week public consultation on proposed “Guidelines for Financial Institutions Adopting Enabling Technologies”.
The consultation sets out principles for cross-sectoral such as banking, insurance, asset management, and securities, and best practices for financial institutions when adopting enabling technologies for the development or offering of innovative products and services. The enabling technologies include Application Programming Interfaces, Big Data Analytics and Artificial Intelligence, Biometrics, Cloud Computing, and Distributed Ledger Technology.
The objectives of these guidelines are to promote the safe and sound adoption of these technologies by financial institutions across the UAE, so that the risks arising from the adoption of innovative activities are proactively and appropriately managed. In drawing up the Guidelines, the Regulators have considered both international standards and industry best practices.
The guidelines will apply to all financial institutions that are licensed and supervised by any of the Regulators who utilise the enabling technologies; irrespective of the financial activities conducted. The Regulators welcome comments on the guidelines which are due to be issued in the second half of 2021; subject to the outcome of the public consultation.
The establishing of these guidelines comes in tandem with similar efforts by other financial authorities in the UAE to facilitate the international exchange of financial information and expertise, as well as to collaborate with the relevant authorities and stakeholders to combat financial crimes.
For example, the Financial Intelligence Unit of the United Arab Emirates (UAE FIU) has recently signed two separate Memorandum of Understanding (MoUs) with the Bangladesh Financial Intelligence Unit (BFIU) and the Financial Reporting Centre (FRC) of the Federal Republic of Somalia.
The UAE FIU has signed separate agreements with the FRC of Somalia and the BFIU in accordance with the UAE’s overarching objective of combatting money laundering and financing of terrorism, underpinned by mutually beneficial intelligence exchanges with international counterparts. The MoUs were signed by Ali Faisal Ba’Alawi, Head of the UAE FIU, with Amina Ali, Director of the FRC of Somalia, and Abu Hena Mohammad Razee Hassan, Head of the BFIU, representing their respective jurisdictions.
Commenting on the agreement, Ali Faisal Ba’Alawi said, “Our undertaking of these agreements with the FRC of Somalia and the Bangladesh FIU further reinstate our efforts to facilitate a robust exchange of knowledge and expertise in the areas of anti-money laundering and combating the financing of terrorism, alongside leading international intelligence units. I am confident that these MoUs will allow for greater collaboration between our respective jurisdictions on best practices in financial crime prevention, ultimately contributing to the stability and security of the UAE’s economic landscape and strengthening relations between the UAE, Bangladesh, and Somalia.”