RIYADH: Fintech Saudi has said it is seeing the emergence of a growing industry in the Kingdom, as the sector continues to accelerate and expand across the globe.
A number of key developments have taken place to support the growth of the fintech industry in Saudi Arabia based on the latest Fintech Saudi annual report.
The developments include the launch of Apple Pay, the establishment of Saudi Payments and the continued issuance of regulatory testing licenses and regulations by the Saudi Arabia Monetary Authority (SAMA) and the Capital Markets Authority (CMA) to support fintech activities.
Last year and this year were a pivotal period for the fintech industry in the Kingdom, according to Fintech Saudi director Nejoud Almulaik.
“Despite the challenges of COVID-19, we have seen progress in regulations, infrastructure and an increasing number of investment rounds in fintech companies, which have built a solid foundation to support the emergence of a growing fintech industry in Saudi Arabia that will contribute in a meaningful way to Vision 2030.”
There have also been major initiatives within the community, including the National Commercial Bank (NCB) / Monsha’at fintech accelerator program and the launch of Riyad Bank’s fintech fund.
“Six out of 38 startups in our tech portfolio companies are fintech,” founding partner of Vision Ventures Haitham Bu-Aisha told Arab News. “Five years back it was a dream to implement any business with financial instruments for entities other or smaller than banks of financial institutions. With the help and support of SAMA and CMA with their sandboxing initiatives we could see more than 100 startups officially operating before the end of 2020.”
He said banks had been reluctant to dive into this arena and it was a taboo to tap into this type of venture. “Today, a handful of Saudi banks are leading several fintech initiatives and funding rounds. It’s very obvious how much impact fintech has had on the e-commerce industry in the region due to the spread of payment options. Micro-investing and funding is also accelerating due to the ease of reach by new fintech startups. It’s going to be a very bright future for the new generation I bet,” he added.
Fintech Saudi has continued to support the development of the fintech industry through initiatives such as the Fintech Ecosystem Directory and the Fintech Jobs Portal to support fintech companies, the Fintech Regulatory Assessment Tool to provide greater regulation clarity, and the Fintech Data & Research Initiative to support data-driven innovation in fintech.
The number of operating fintechs has increased three-fold in a year, from 20 in 2019 to 60 this year, with more than 100 startups at idea or pre-commercial stage.
There has also been an increase in fundraising deals completed in Saudi fintechs for the year to date, with the total investment amount already surpassing 2019 levels. This is building up to a fintech market in Saudi Arabia that, according to Statista, is expected to reach transaction values of more than $33 billion by 2023.
Fintech Saudi is an initiative launched by SAMA, in partnership with the CMA, to support the development of the fintech industry in Saudi Arabia.
