Evolving Regulatory Landscape Redirection to Innovation Scott Lim

Evolving Regulatory Landscape – Redirection to Innovation Scott Lim, Associate Director, Insurance Supervision

Agenda • • • What worries the regulator What will worry the regulator Fin. Tech / Insur. Tech opportunities in MENA Challenges for innovation in MENA Regional regulatory developments DFSA update

What worries the regulator Regulated insurance entities • Brokers • Agents • Insurers • Reinsurers Micro level Macro level Conduct of Business • Adequate disclosure • Fair pricing • Safe handling of client monies Stability in the financial system Prudential • Adequate reserves and capital • Minimise loss to clients if business fails Financial inclusion

What will worry the regulator • Novel ways to conduct business: marketing, distribution, conclusions of contracts, handling complaints • Provision of financial services to previously excluded sector • Using high tech, big data to manage risks • New products to cover new risks – e. g. cyber risk

Insur. Tech Opportunities in MENA • Large population of under banked, under insured • Fast growth of e. Commerce • Smartphone usage • Low levels of customer loyalty • Under serviced SMEs

Challenges for innovation in MENA • • • Lack of innovation in existing financial institutions Lack of investments Lack of trust for start-ups Lack of awareness of services available Security concerns about protection of funds, personal information

Regional regulatory update • • • Regulatory sandboxes in the UAE, Bahrain Stored value facilities e. Commerce regulations, digital signatures Electronic communication laws Smart contract solutions

DIFC / DFSA update • • • DIFC Hive DIFC Fund to invest in Fin. Tech start-ups DFSA Innovation Testing Licence Loan based and equity based crowd funding framework Dedicated regulatory staff on Fin. Tech Mo. Us with other regulators

Thank You