JEDDAH: Over the past decade, financial technology — widely referred to as FinTech — has grown primarily due to growing Internet access worldwide and the emergence of smartphones and apps.
According to the Ericsson Mobility Report published last year, 70 percent of the world’s population is expected to be using smartphones by 2020.
As smart devices are increasingly becoming part of everyday life for most people in the digital age, it is essential for the banking sector to become more innovative to enhance its productivity.
“We’re transitioning toward a situation where growth for companies and economies will have to depend more on productivity than before,” said Jarmo Kotilaine, chief economist at the Bahrain Economic Development Board (EDB).
“To achieve that, you will need better management, better innovations, new distribution channels and new capital.”
Increasing the efficiency of digital banking will particularly serve customers in Saudi Arabia, where banks’ working hours overlap with those of most employees.
Comprehensive digital banking can save them a journey to the branch. Moreover, Saudi Arabia is a pioneer when it comes to technology penetration in the region.
“The usage of technology in Saudi Arabia is advanced, whether in retail banking, cash management or corporate,” said Talat Hafiz, secretary-general of Saudi banks’ Media and Banking Awareness Committee.
“When it comes to technology, what applies in conventional banking also applies in Islamic banking.”
He added: “Using financial technology improves the quality of the banking experience among clients. It influences the speed and accuracy of the experience. Technology makes products more reachable to clients.”
The change in behavior patterns among clients in the banking sector requires banks to respond to new customer needs and rethink how they deliver services to their clients, taking them to a phase of digital banking.
“As a matter of policy, we in SAMA (the Saudi Arabian Monetary Authority) encourage all regulated institutions to be responsive to the needs of their customers, and have always supported the development of products that meet those needs,” said SAMA Gov. Ahmed Al-Kholifey.
A report published this month by Ernst & Young (EY) said the adoption of financial technology is not an option anymore, but an essential requirement for Islamic banks to gain more market share.
As customer technology penetration in the Gulf Cooperation Council (GCC) increases, users are expected to become more familiar with using digital tools in their banking transactions, retail investments and peer-to-peer (p2p) lending and crowdfunding.
According to the EY report, Saudi Arabia, the United Arab Emirates (UAE) and Malaysia are the three largest Islamic banking markets in terms of assets.
Saudi Arabia takes the lead with 34 percent market share, followed by 17 percent and 13 percent in the UAE and Malaysia, respectively.
Ashar Nazim, partner in EY’s Global Islamic Banking Center, said the “FinTech revolution” — in terms of data, analytics, robotics and artificial intelligence — has the ability to bring scattered data together and help decision-makers make better decisions.
“We believe the last 20 years of Islamic banking have been about innovation in Shariah contracts and Shariah-compliant products,” said Nazim.
“The next 20 years will be about combining smart technology with Islamic banking in order to grow further.”
The size of the Islamic finance industry is now close to $2 trillion. “We believe there’s an additional trillion dollars in the industry which isn’t formally captured,” Nazim added.
He said this additional trillion dollars is primarily from endowments (waqf), high net worth and institutional investing done in a number of infrastructure projects in the conventional and Islamic markets.
“Bringing the additional $1 trillion into the Islamic finance industry is where FinTech can be very important,” Nazim said.
FinTech: A threat?
As financial technology is deemed to better facilitate banking services, it can also be seen as a disruption to the banking sector.
Looking at the history of Islamic finance, it was seen as a disruption to conventional finance.
“FinTech is now disrupting the overall finance world. The big banks are slower in adopting technology because they have a legacy to protect, but start-ups are more welcoming in adopting change,” Nazim said.
The EY report showed that in FinTech space in the GCC, Islamic finance is still in “dismissive mode,” thinking it is not going to impact the industry.
Nazim said the mindset has to change: “We have to start thinking as a start-up, and that requires a complete change in behavioral economics, in terms of how organizations are run.”
He added: “Bringing smart technology by itself is of no use unless the organization’s culture changes. Islamic banks are in better positions because they’re smaller than conventional and more local. It’s easier for them to change.”
FinTech can open doors for further national and international collaboration in the banking industry.
There is a growing realization within banks that they cannot afford to do everything by themselves.
“There has to be collaboration within the industry. At the moment collaboration is at a national level, and in future it will be at cross-country level. The next 20 years will be collaborating in terms of smart technology,” said Nazim.
“FinTech shouldn’t be seen as a threat or as competition. There is tremendous potential for collaboration between the GCC and Malaysia in FinTech.”
He added: “These smart technologies increase levels of trust and the speed with which you do these transactions.”
Speaking at the recent World Islamic Banking Conference (WIBC) in Bahrain, Rasheed Mohammed Al-Maraj, governor of the Central Bank of Bahrain (CBB), said the smart use of technology is a game-changer in banking, just as in other aspects of daily life.
“Technology has made it possible to access more customers, in a more comprehensive way, at a lower cost, than in the past,” he said.
“Islamic banks must make full use of these technological enhancements and invest more in this space.”
Al-Maraj added: “The CBB believes in embracing new technology, and will soon be issuing regulations to facilitate FinTech solutions. We’d like to see Islamic banks come forward and take the lead in this area. FinTech is leading the way.”
According to SAMA’s Al-Kholifey, all the 12 banks operating in Saudi Arabia offer Shariah-compliant finance, as do several branches of foreign banks that are licensed to operate in the Kingdom.
“Saudi retail banking is overwhelmingly comprised of Shariah-compliant products, and we note significant growth of Shariah-compliant growth in the corporate sector as well, growth that we expect to see continue in the next decade,” he said.
EY says the introduction of FinTech will increase the Islamic finance customer base, which is roughly 100 million today, to 250 million by 2020.
“So more than twice the growth in customers can be achieved with the adoption of FinTech,” Nazim said.
• In this continuing special and exclusive series on Islamic Finance and Banking, Arab News will deal with another crucial aspect of the industry on Sunday, Dec. 25.
The dawn of financial technology in Islamic finance
The dawn of financial technology in Islamic finance
From barrels to bytes: How AI is powering Saudi Arabia’s industrial transformation
- Inside the Kingdom’s drive to merge energy expertise with digital intelligence
RIYADH: Artificial intelligence is moving beyond concept to become a cornerstone of Saudi Arabia’s energy sector, reshaping how oil, gas, and power systems are managed and optimized.
Industry giants like Saudi Aramco are embedding smart systems into their operations to boost efficiency, reliability, and sustainability—key pillars in the Kingdom’s efforts to modernize its industrial base and diversify its economy.
According to the International Energy Agency, oil and gas companies were among the first to adopt digital technologies. The agency estimates that applying AI to power plant operations and maintenance could save up to $110 billion annually by 2035 through reduced fuel consumption and maintenance costs.
For Saudi Arabia, this technological momentum offers both a blueprint and an opportunity. Under Vision 2030, integrating data and intelligent automation is transforming how energy is explored, refined, and delivered.
At the heart of Saudi Aramco’s operations is a digital transformation strategy centered on artificial intelligence, big data, and the industrial Internet of Things. These technologies are applied at every stage of production—from mapping reservoirs and optimizing drilling to improving efficiency and safety.
AI also underpins Aramco’s Digital Transformation Program, which develops in-house smart tools and data-driven platforms designed to cut emissions, reduce costs, and enhance performance while ensuring a reliable energy supply.
A prime example is the Upstream Innovation Center, where engineers have implemented AI solutions that reduce fuel gas use in boilers, improve efficiency, and detect potential leaks through fiber-optic monitoring. At the Khurais oil field, more than 40,000 sensors monitor approximately 500 wells via an Advanced Process Control system—the first of its kind for a conventional oil field at Aramco. Digitization at Khurais has increased production by around 15 percent, doubled troubleshooting speed, and lowered both costs and environmental impact.
These advances illustrate how Aramco’s network is evolving into a connected, adaptive model, blending traditional engineering expertise with digital intelligence.
DID YOU KNOW?
• AI could save up to $110 billion a year in global power plant fuel and maintenance costs by 2035.
• Advanced Process Control enables real-time monitoring of hundreds of oil wells in the Kingdom.
• AI-powered simulations now replace weeks of manual analysis, enabling faster operational decisions.
As Saudi Arabia develops an AI-driven energy economy, the King Abdullah University of Science and Technology is bridging the gap between digital innovation and industrial application.
Bernard Ghanem, chair of the Center of Excellence for Generative AI, said the university is working with Saudi Aramco to develop AI systems that predict the chemical properties of materials and accelerate research into direct air capture technologies for carbon dioxide removal.
He told Arab News that KAUST is partnering with SABIC and ACWA Power to apply AI in process optimization and materials discovery, turning lab-scale research into practical solutions for the energy sector.
Ghanem said KAUST’s generative AI materials program combines a robotic chemistry lab with its AI Chemist foundation model, a system that accelerates the development of catalysts, battery materials, and membranes for clean energy applications.
“This is our lab of the future, automating experimentation and speeding up energy innovation,” he said.
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Mani Sarathy, professor of chemical engineering at KAUST, noted that AI-based reinforcement learning tools are already improving efficiency in hydrocarbon refineries by enhancing simulations and shortening analysis cycles.
“AI is helping energy companies run complex simulations that once took weeks, enabling faster and more precise operational decisions,” he told Arab News.
Sarathy added that the next phase will combine automation with expert oversight. Hybrid human-AI control systems, he explained, are likely to become standard in critical operations, balancing digital autonomy with safety and reliability as Saudi industries expand AI deployment.
These efforts highlight KAUST’s growing role in transforming AI from an academic discipline into a driver of industrial innovation in Saudi Arabia’s energy sector under Vision 2030.
Meanwhile, Skeleton Technologies is bringing AI-driven energy storage solutions to Saudi partners, solutions that are already reshaping industrial systems across Europe and beyond. In Europe, the company combines artificial intelligence and advanced materials to reduce energy use and improve efficiency in data centers, electricity grids, and defense systems.
“Our solutions allow AI infrastructure to consume less electricity and reduce grid connection needs, making AI operations more energy efficient,” Arnaud Castaignet, vice president of government affairs and strategic partnerships at Skeleton, told Arab News.
Inside its factories, Skeleton uses AI-driven digital twin models, created with Siemens Digital Industries, to simulate production, optimize operations, and enable predictive maintenance, Castaignet said. At the core of its technology is curved graphene, a proprietary carbon material that gives Skeleton’s supercapacitors exceptional conductivity.
“It allows our supercapacitors to charge and discharge within microseconds, around 12 microseconds, something batteries cannot do,” Castaignet said.
The company’s flagship Graphene GPU system, built on these supercapacitors, cuts energy use in AI data centers by up to 40 percent and reduces grid requirements by 45 percent while boosting computing performance. The devices are free of lithium, nickel, and cobalt, relying instead on graphene derived from silicon carbide—essentially sand—processed entirely in Germany.
“To build sustainable AI infrastructure, you need energy-saving hardware as well as renewable power,” Castaignet added. “Our Graphene GPU shows both can work together.”
As Saudi Arabia continues linking engineering expertise with digital intelligence, its industrial progress is measured not only in barrels of oil but also in bytes, data, and the smart systems shaping its energy future.
