See how Bahrain fol­lows Sin­ga­pore’s fin­tech foot­print

If there’s one coun­try which Bahrain is tak­ing in­spi­ra­tion from as it builds its own fi­nan­cial tech­nol­ogy hub, it is Sin­ga­pore.

Singapore Business Review - - CONTENTS - By Kier­snerr Ger­win Ta­ca­dena

In the first Mid­dle East and Africa Fin­tech Fo­rum or­gan­ised by the Arab Fi­nan­cial Ser­vices, one of the key dis­cus­sions was on how Bahrain is fol­low­ing the foot­steps of the lion city in be­ing a re­gional hub for fin­tech and in­no­va­tion. David Parker, Bahrain Eco­nomic De­vel­op­ment Board’s (EDB) ex­ec­u­tive di­rec­tor, noted how the Mon­e­tary Au­thor­ity of Sin­ga­pore has been at the fore­front of in­no­va­tion when it comes to the fi­nan­cial ser­vices sec­tor. “We have seen over the last two to three years, as Sin­ga­pore be­come a recog­nised global hub, an in­no­va­tor within the fin­tech space. MAS is at the heart of that. So for us, it is a nat­u­ral part­ner­ship to go with Sin­ga­pore. We be­lieve that it is a great model to fol­low,” Parker ex­plained.

To re­call, MAS man­ag­ing di­rec­tor Ravi Menon an­nounced the cre­ation of a reg­u­la­tory sand­box in Sin­ga­pore dur­ing the week-long fin­tech fes­ti­val last year. MAS also un­veiled the Look­ing Glass, an in­no­va­tion lab that would en­able play­ers to ex­per­i­ment with fin­tech so­lu­tions and pro­vide con­sul­ta­tion to start ups. Prior to this, Sin­ga­pore’s cen­tral bank re­leased 12 Ap­pli­ca­tion Pro­gram­ming In­ter­faces for de­vel­op­ers and fi­nan­cial in­sti­tu­tions to use in their prod­ucts and ser­vices.

Sand­box for Fin­tech

Bahrain is do­ing just the same. Rasheed Mo­hammed Al Maraj, gov­er­nor of The Cen­tral Bank of Bahrain, an­nounced the is­suance of a white pa­per on their own Reg­u­la­tory Sand­box for Fin­tech. “At the Cen­tral Bank of Bahrain (CBB) we un­der­stand the dis­rup­tive na­ture of fin­tech to busi­ness mod­els and jobs but we have made a con­scious de­ci­sion to adopt it. The pace of in­no­va­tion is not re­versible,” he said.

For Khalid Al Ru­maihi, EDB’S chief ex­ec­u­tive, the white pa­per con­sul­ta­tion is a big step in putting in place the ecosys­tem that will turn the coun­try’s am­bi­tion of cre­at­ing a fin­tech hub into a re­al­ity. In line with its goal to nur­ture a fin­tech space in Bahrain, the EDB signed a part­ner­ship with fin­tech in­cu­ba­tor and ecosys­tem builder Sin­ga­pore Fin­tech Con­sor­tium (SFC) to es­tab­lish a fin­tech ecosys­tem and reg­u­la­tory frame­work. Dubai-based as­set man­age­ment and ad­vi­sory firm Tru­cial In­vest­ment Part­ners is also part of the agree­ment. To­gether with the SFC, Tru­cial will sup­port Bahrain in de­vel­op­ing re­lated com­mer­cial and le­gal in­fra­struc­ture re­quired to ini­ti­ate, nur­ture and sus­tain Bahrain’s fin­tech ecosys­tem. “We have a long-stand­ing re­la­tion­ship with SFC and

Bahrain. We bring our in­vest­ment ex­pe­ri­ence and back­ground to as­sist in many of the ven­tures and try to build the ecosys­tem within Bahrain by bridg­ing it to other parts of the world,” Tru­cial In­vest­ment Part­ners ex­ec­u­tive di­rec­tor Wael Al Hashimi said.

Work­ing to­gether

SFC co-founder Ger­ben Visser said the con­sor­tium wants to as­sist Bahrain just as how it did with Sin­ga­pore for the past three years. Visser noted that SFC has helped on the cor­po­rate in­cu­ba­tion with large fi­nan­cial in­sti­tu­tions, mak­ing them un­der­stand how they can come into the fin­tech space even at its in­fancy. He enu­mer­ated three key phe­nom­ena they are fo­cussing on: in­surtech, reg­u­la­tory tech­nol­ogy, and blockchain.

“On one hand we work here to see how we can set up a ded­i­cated fin­tech hub, which is a plat­form neu­tral space not just for start ups lo­cally, but also for com­pa­nies out­side to come to Bahrain and soft launch, and to have a place they can call home. This is also for in­cum­bents and larger play­ers here in Bahrain to have their in­no­va­tion teams to sit and col­lab­o­rate with early stage com­pa­nies,” he noted.

Visser pointed out that Bahrain can po­si­tion it­self glob­ally as a fin­tech hub in re­la­tion to Is­lamic Finance. In the mid-1970s, Bahrain was the first to put em­pha­sis on Is­lamic Bank­ing to nur­ture the con­cepts, rules, and com­mon stan­dards of Shari’a com­pli­ance. This has led to the King­dom be­ing the most de­vel­oped Is­lamic Finance cen­tre in the GCC re­gion. The said in­dus­try is ex­pected to more than dou­ble this year to US$2.6T.

The Cen­tral Bank of Bahrain an­nounced the is­suance of a white pa­per on their own Reg­u­la­tory Sand­box for Fin­tech.

Khalid Al Ru­maihi speaks at the in­au­gu­ral Mid­dle East and Africa Fin­tech Fo­rum

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