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.
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.
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