Islamic fintech makes inroads into Europe

Abu Dhabi Global Market (ADGM) has announced two new partnerships with non-profit associations in London and Zurich aimed at strengthening its position as a global fintech hub for the Middle East reports International Adviser.

The UAE capital’s international financial centre has formed alliances with the Swiss Finance and Technology Association (SFTA), a trade body representing various players within the Swiss fintech ecosystem and think tank Responsible Finance and Investment Foundation (RFI).

Swiss ties

The collaboration between ADGM and the SFTA will connect Swiss and UAE fintech participants to business opportunities, experience and investments in each other’s region, accelerate the exchange of fintech expertise, and anchor fintech activities in ADGM, Abu Dhabi, and Switzerland, ADGM said in a note.

“With Switzerland as one of the world's leading blockchain and crypto-currency centres, this new fintech bridge and partnership dovetail well with Abu Dhabi's focus as a global fintech hub,” said Richard Teng, chief executive of ADGM’s Financial Services Regulatory Authority (FSRA).

“This relationship illustrates our continued interest to develop a neutral global network of leading fintech hubs so that each can develop their competitive advantages while the global ecosystem expands,” said John Hucker, president of SFTA.

Ethical Islamic fintech

ADGM also announced it has set up a partnership with London-based non-profit organisation RFI, for the purpose of integrating ethical and socially responsible practices into Sharia-compliant fintech services and Islamic finance activities.

The partnership establishes an open platform for both RFI and ADGM to share expertise and knowledge and to create joint efforts “which will enhance and strengthen the fintech ecosystem that ADGM initiated for the Mena region in March 2016”.

ADGM and RFI will also work closely to enable and assist investors, fintech entrepreneurs and innovative firms in testing and introducing innovative products, services and solutions “within a well-structured and conducive environment” under the ADGM Reglab programme.

“Fintech has a major opportunity to transform how Islamic financial institutions connect with their customers and promote a unique and differentiated approach to financial services,” said Blake Goud, chief executive of RFI.

“We are optimistic that this partnership with ADGM, building on the regulatory environment they have created in Abu Dhabi, can encourage and support emerging fintech companies to adopt ethical, responsible and Islamic approaches.

"We look forward to working with ADGM to expand responsible fintech in a way that encourages more equitable, inclusive and sustainable growth,” Goud said.

Global fintech push

Abu Dhabi’s international financial centre is pushing forward with its plans of establishing a global fintech hub in the UAE capital by way of deals and partnerships in all four corners of the globe.

It has recently signed agreements with authorities and regulators including Australia, Malaysia, Kenya and with the authority of Qianhai Shenzhen in Hong Kong.

 Tech-based tax services gain pace to ensure businesses comply with global digital transparency standards

Global consultancy EY among firms now offering advanced services that redefine how companies face new developments in tax, audit and compliance, reports the South China Morning Post.

Rigid new global initiatives to increase transparency of business data are giving rise to more advanced professional tax services, which employ innovative tools that include cloud computing, financial technology and artificial intelligence.

 “Professional services firms of all disciplines are expecting their workforces to change, which will see many jobs displaced and new roles created for software programmers, data analysts and computer scientists,” Paul Haswell, a partner at international law firm Pinsent Masons, told the South China Morning Post.

“Existing providers who fail to embrace this technology driven future are doomed to obsolescence.”

EY, one of the world’s four largest professional services networks, on Monday announced the creation of a dedicated group of more than 1,000 professionals from its member-firms across the globe for its new tax technology and transformation practise.

Albert Lee, digital tax leader at EY Asia-Pacific, pointed out that the pace of change in tax legislation and the accelerated use of technology by governments for automating compliance and filing processes, are disrupting traditional tax preparations.

EY, one of the world’s four largest professional services networks, on Monday announced the creation of a dedicated group of more than 1,000 professionals from its member-firms across the globe for its new tax technology and transformation practise. Photo: SCMP

EY’s new practise will include a custom tax technology application development, a post mergers and acquisitions tax function, robotic process automation, artificial intelligence, blockchain, and tax analytics and reporting services.

Jim Hunter, managing partner for tax at EY Asia-Pacific, estimated that its tax technology and transformation practise will have more than 5,000 professionals by 2020, helping cultivate new careers for science, technology, engineering and mathematics graduates.

“We have, by far, the leading practise in this space, because we have pooled all of our tax technology and transformation resources from across the Asia-Pacific and linked them with global resources,” Hunter said.

EY’s new practise was established in response to many governments’ commitment to enhance tax transparency and fight cross-border tax evasion, which has prompted many companies to better manage their digital business data to comply with tax laws.

That development is linked with global efforts by the Organisation for Economic Co-operation and Development (OECD) against base erosion and profit shifting (BEPS), which refers to tax avoidance strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations.

About 70 jurisdictions have so far signed the OECD’s “Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Shifting” – a legal document that offers to help governments counter tax evasion, tax treaty abuse and improve dispute resolution.

“Hong Kong indicated its commitment in June 2016 to implement the BEPS package put forward by the OECD. The government has also released a consultation report on measures to counter BEPS,” Hunter said.

“[Mainland] China is also a strong supporter of that BEPS package, which led it to start the e-government audit for big enterprises in Shanghai last year.”

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