Another milestone for FinTech Saudi

As we head towards a completely digitized, transparent and decentralized financial system, soon Saudi Arabia will implement inter-bank instant money transfers.

The new system will help financial entities, companies and individuals to carry out such transfers around the clock, increasing efficiency with lower operating costs, providing innovative solutions and transferring money at lower fees.

As time is of the essence for the successful implementation of the Saudi Vision 2030 with KPIs in place to measure performance, the instant inter-bank money transfers will boost economic development and enhance the efficiency of financial transactions while enabling the banking and FinTech entities to improve their products portfolio. The new system, which is under the supervision of the Saudi Arabian Monetary Authority, will further enable these entities to manage their cash flows, boost transparency, and enhance the quality of services provided.

Furthermore, the new system will enhance the Kingdom’s position as a leading FinTech hub with less dependence on cash in line with the goals of the Financial Sector Development Program under Vision 2030.

Things are moving fast in the country. The business community is becoming more sophisticated and asking for speed, accuracy, and efficiency with low cost. Luckily, entrepreneurs around the world are bringing that needed change and the banking industry globally is being disrupted like never before. It’s too early to tell exactly what the impact of this disruption will be, but it is clear that things are changing faster than ever before and it has the legacy banking system up in arms.

Another rising force disrupting our banking system and will transform FinTech is artificial intelligence (AI). AI lets institutions provide personalized, intelligent banking services to customers at scale. The technology is available now but will become more sophisticated and widespread in the next 10-15 years. Commercial and private banks in Saudi Arabia and around the world will have no option but to either speed up their innovations, give way to nimble FinTech startups, or partner with them for mutual benefits. Saudi Arabia alone has almost 47 registered FinTech companies at different timelines of development and innovation.

As banks and FinTech startups work to provide the latest and greatest financial services, they’re removing layers of unnecessary and lengthy approval processes with higher degrees of accuracy and less paperwork. Furthermore, physical bank branches will gradually disappear. As we use online banking for our personal or corporate banking, in the not-too-distant future, AI will replace our private bankers, and we will discuss our financial planning decisions with virtual private bankers.

• Basil M.K. Al-Ghalayini is the chairman and CEO of BMG Financial Group.