The important role IFCs play in a modern economy

As banks increasingly work to prioritise client needs and adapt their operating models to become more agile and resilient, they also need to think globally about the best ways to secure competitive advantage and achieve their growth ambitions.

Contributing to their success are international financial centres (IFCs), which offer robust judicial systems and regulatory frameworks, business development support services that enable their innovation, excellent connectivity, and access to markets.

In the Middle East, Abu Dhabi Global Market (ADGM) is building a vibrant and thriving sustainable finance hub by offering financial firms a robust legal infrastructure and a diverse ecosystem that supports capital formation, including its raising and deployment. The financial hub says its central geographic location makes it strategic for banks aiming to serve a global market, giving them exposure to new clients and partners who can offer additional growth opportunities.

Arvind Ramamurthy, Chief of Markets at ADGM, said: “As a world-leading international financial centre, ADGM plays a significant role in positioning Abu Dhabi as the global hub for business and finance that connects the growing economies of the Middle East, Africa and South Asia. We are pleased to see banks and other financial institutions set up offices at ADGM as we offer them valuable support in meeting their growth objectives for the region.”

For Standard Chartered Bank, having a supportive regulatory environment was key to their success in the region as they opened offices at ADGM in 2020. It also allowed them to help multinational companies in Europe and America access growth opportunities in emerging and frontier markets.

“Since we established our offices at ADGM back in 2020, we were able to achieve our announced objectives by leveraging on the progressive and efficient regulatory framework. This supportive framework allowed us to introduce innovative financial products tailored to support the financial needs and requirements of our clients and customers across the region,” said Rola Abu Manneh, Chief Executive Officer at Standard Chartered UAE.

ADGM is the first jurisdiction in the world to introduce a comprehensive regulatory framework for the regulation of spot virtual asset activities. It also introduced ADGM Digital Lab in 2021, a regulatory framework for FinTech companies designed to foster innovation within the UAE financial services market for both new market entrants and existing financial institutions.

NPB Middle East, a joint venture between the Swiss private banking group, NPB Neue Privat Bank AG, and Almha, an investment company, says that an international financial centre should be conducive to and in alignment with an organisation’s growth ambitions.

“As an ADGM-incorporated entity, we have benefited from the excellent business development support provided by ADGM. As part of the licensing process, we were allocated a dedicated Relationship Manager, who not only helps with licensing and administration topics but also proactively supports the organisation’s growth by connecting us to the wider ADGM community. This is done through personal introductions, as well as tailored events,” an NPB ME spokesperson said.

As part of its growth plans, NPB ME is looking to hire more talent in the long term, and in the medium term, expand the range of services that it offers out of ADGM.

International financial centres are vital to a modern economy for creating jobs, contributing to the growth of the GDP and supporting businesses. Their role as a catalyst for innovation that is shaping the future of finance is expected to become increasingly important as financial services providers look to introduce cutting-edge financial products tailored to support the financial needs and requirements of their clients and customers.