Welcome to the inaugural Money 2020 Middle East.
We're here at the Riyadh exhibition and Convention Center, and I am joined by Maha Al Sadi, the head of regulatory affairs of the QFC Authority.
Thank you so much for being here.
Thank you so much for having me.
So Maha, just looking around, we can see just how many businesses. are attracted and interested in this region, and I know that QFC has been very active in attracting new fintech companies.
Tell me about those efforts.
That's a very interesting question and very timely.
So it starts from the customer journey.
Uh, we need to make sure that the onboarding process is as easy as possible.
So that's why firms can apply through an online application form.
Uh, we also have our own one-stop shop concepts, so they will get their license, they'll get their visas all under the same roof.
Add to that, Qatar as, um, a hub for FinTech is something that we would also I would like to also discuss because we have excellent.
Proximity in terms of time zones to other regions in the world.
Excellent infrastructure, um, you're connected the world to the entire world with um also Qatar Airways for example.
Well what's super super important is the initiative that Qatar Investment Authority has done.
They have launched last February something that is called Qatar Investment Authority or QIA Fund of funds program where they've allocated over a billion dollars to VCs to invest in fintechs and startups that would have some sort of an impact not only in Qatar but the entire region, and that has been super successful, increase the attention and the amount of firms that are looking to register in Qatar.
That will build slowly the whole ecosystem from venture builders to studios to different VCs, different seats and different stages of funding.
So this was a success and we're looking forward to collaborating even more with QIA on registering these VCs and portfolio companies.
Oh, you can certainly see the results in just the number of new firm.
Absolutely it went by a huge number like another event that happened in February in Qatar, we have seen over 1000 registrations in just 3 days.
I've seen the new form applications.
It looks like exponential growth.
Tell me about some of the fintech categories that are live now.
Oh, that's a very.
Interesting question.
So, uh, in collaboration with Qatar Central Bank, uh, we have a number of different categories.
So with Central Bank's approval we have buy now pay later we have crowdfunding, uh, that is based on debt equity is based with QFMA, the Financial Market Authority.
We have, uh, a lot of interesting, um.
Uh, robo advisory cases, uh, let me think of crowd funding.
I have already mentioned, um, insure tech, open banking, and what is very close to me is anything that has to do with tokenization and the use of blockchain, um, and recently, um, Central Bank has also issued AI guidelines that makes it more interesting for financial services firms to explore.
We have the usual API services payment getaways, so payment service providers, um, and we look always into what is the use case and we try to match it with an existing activity, and we would always prefer for firms to look into a partner to make sure that their business will be successful.
Well, you know, you mentioned so many different categories, and with this technology, it moves so quickly.
How do you make sure the regulatory framework keeps up with this fast moving technology?
I love this question because let's face it, regulators will never be up to speed with emerging technologies and the way that it's going with different use cases.
So for digital assets, for example, we launched what we call digital asset loud, and we're trying to work with the industry and look into the different ways.
We want to approach it.
Sometimes you don't even need to regulate it.
If you're providing the infrastructure and the technology itself to a bank, you will be seen as a tech provider and you should not be regulated.
You will just be required to register, whereas the moment that you're touching any sort of client money or providing advice to clients, you should be treated as a financial firm, and it's usually we have this very much repeated term, same activity outcome and therefore the same regulation would apply as if you're a traditional player.
And another thing that we're working on very um closely is to always use international standards as our um let's say uh benchmark and our rules are again English common law, so we're always being principle based risk based rather than being super dictated so.
Look into it.
What kind of technology are you using?
Who are your clients?
What type of railways and guards do you have in terms of cybersecurity, in terms of business continuity, consumer protection, all of these things combined will make it easier for us to determine the type of license that you will be granted.
So I imagine as with many things, collaboration is key.
So tell me more about how that works both in Qatar and regionally.
This is also a spot on question.
So in Qatar Financial Center, we work with our own regulator which is Qat the Financial Center Regulatory Authority.
Um, and we work with Qatar Central Bank and Qatar Financial Market Authority, depending on the different use cases.
So we always have these open dialogues, we would always share a pipeline, and we would always like to make sure that we do not have, I don't want to use the term of regularize your arbitrage because it's, it's not there we focus on different things, but that we're all on the same page, um, and it's also very important to expand this collaboration.
Two other GCC regulators, so we're in active discussion with central banks, with uh other free zones and financial centers, and we're very active through our QFCRA colleagues in being present in IOSCO meetings in providing responses to.
Consultation papers, so specifically when it comes to emerging tech, and let's use the the the the example of digital assets.
It is something that is global, where regulations are very local and you would need these type of interactions to make sure that you're addressing the risk and the opportunity in the right way.
Well, we certainly cannot have a conversation about tech without talking about AI.
So I would love to hear your perspective, insights on just how you're leveraging it, how you're approaching it.
Um, this is a bit of a difficult question because if you would look, and if you would look in the way that the EU, the European Union, dealt with it, they immediately started with the first regulatory framework to regulate AI with the AI Act.
It started off great.
However, it became a bit too difficult to maintain.
And the way that Qatar decided to do it is by providing guidelines for now.
So Qatar's central bank issued some AI guidelines.
Um, our, our different industries have also provided certain guidelines in terms of the use and the LLMs, etc. but we decided not to regulate it just yet until we need to understand how it will affect firms and financial services.
Again, it's the outcome, um, so if you're using AI, that doesn't mean that you should be held to a different bar than uh if you're a normal financial service provider. um, so this is the approach that we have taken for now.
I think what is very important is to always uphold some of the the the normal principles explainability, no bias, uh, making sure that um you have certain um.
Algorithms are are are uh attainable and does not.
Um, make it difficult for us to understand if you cannot explain it, then you should not really be using it.
Ah, that's so true, and I'm wondering, you know, just looking ahead, are there any other trends or, you know, predictions or things that we should be keeping our eye on?
Um, I think what is very important is really to, to start considering what we're gonna do with QA.
So the moment that we have some quantum effects, this is something that we really need to be looking into, um, and, um, other than that it's basically again make sure that you do not regulate for the sake of regulating that you have um the right consumer protections in place.
And um keep on the dialogue with the industry and other regulators.
So the collaboration again, absolutely I absolutely thank you so much.
Thank you.
