RIYADH: Saudi Arabia’s plan to invest $100 billion in technology is propelling the Kingdom to the forefront of innovation and talent development worldwide, said a senior Microsoft Arabia executive. 

In February, the Kingdom launched Alat, a technology and artificial intelligence firm backed by the Public Investment Fund, with the aim of pouring funds into Saudi Arabia’s technological sector. 

In an interview with Arab News, Turki Badhris, president of Microsoft Arabia, elaborated on how the Kingdom’s numerous giga-projects and initiatives are harnessing the transformative power of AI. 

“Saudi Arabia is playing, I’m not going to say a regional, but a global role when it comes to leading in AI vision,” he said, later adding: “That illustrates the forward-thinking of the Kingdom, leadership, not only to position Saudi Arabia as a regional hub for AI, but also as a global hub for innovation and talent.” 

Badhris also emphasized that the establishment of a global AI center for Arabic demonstrates the Kingdom’s commitment to promoting the regional language and fostering innovation internationally.  

This aligns with Microsoft’s mission to empower individuals and organizations in Saudi Arabia, contributing to unlocking the Kingdom’s full potential in the field of AI and technology. 

“The recent investment by Microsoft in cloud and AI will contribute to and catalyze the next phase of growth of the ICT market in Saudi Arabia. Our recent announcement on Feb. 23 of bringing Microsoft Cloud Data Center to Saudi will accelerate and diversify the growth of the economy of Saudi Arabia,” he told Arab News. 

Underscoring Microsoft’s commitment to the Kingdom, Badhris stated that the convergence of cloud and AI technologies will have a significant impact on accelerating Saudi Arabia’s gross domestic product growth. 

Furthermore, he forecasted that by 2024, there will be a notable increase in the number of businesses transitioning to cloud computing. 

“That is a great step in transforming their business, and then the next step will be definitely leveraging AI and to many of their business models and workloads,” Badhris continued. 

He added: “We are working closely with the Ministry of Communication and Technology to make sure that we have a smooth, accelerated landing of our data center in Saudi Arabia.” 

Additionally, Badhris emphasized the significant impact that AI and cloud technologies will have on various industries. Microsoft is dedicated to unleashing the potential of these technologies across all sectors in Saudi Arabia. 

The company is undergoing a transformation to become an AI-driven organization, embedding AI capabilities into its products at every level. 

“We have a cloud specialized for healthcare, the same for education, logistics, sustainability, and other sectors. We also have a big ecosystem of partners who are building their IP solutions and bringing them to Microsoft Azure,” Badhris stated. 

He continued: “As just a matter of fact, we just rolled out last week the support of our copilot, M365, with an additional 16 languages and one of them Arabic, and that is showing the commitment of Microsoft to localization to the Arab countries.” 

Badhris emphasized that Microsoft collaborates with organizations across diverse sectors, encompassing both public and private domains, and of all sizes, spanning from startups to large enterprises. 

“We are working with startups and SMEs because we believe that the majority of the economic impact is coming from startups and SMEs. For example, we collaborated lately with the Ministry of Investment, MISA, in a big initiative called Alliance to Innovate,” he said. 

The executive emphasized that despite the progress made in Saudi Arabia, there is still much more potential to be unlocked, stating that “this is just the start.”   

He said: “I still believe that we are scratching the surface in Saudi Arabia. Technology is evolving at a very fast pace, and definitely we really need to be up to the speed of this evolution and bring the best from around the world to Saudi Arabia.”

RIYADH: Saudi Arabia recorded a 16 percent annual surge in credit card loans in the first quarter of 2024 to reach SR27.25 billion ($7.3 billion), the latest central bank data showed.

The Saudi Central Bank, also known as SAMA, figures indicate a shift in consumer behaviors about cashless payment options and show that the Kingdom is on track to become a cashless society.

In an April report by GlobalData, Ravi Sharma, a banking and payments analyst, emphasized the transition from cash to electronic payments, noting: “While cash has traditionally been a preferred method of payment in Saudi Arabia, its usage is on the decline in line with the rising consumer preference for electronic payments.”

GlobalData’s payment card analytics revealed that card payments value in Saudi Arabia registered a growth of 17.8 percent in 2022, followed by 9.7 percent in 2023 to reach SR511.5 billion.

Commenting on the payments trend in Saudi Arabia, Sharma said: “The country has a robust digital payment infrastructure, supported by a developing card market and a well-established card acceptance infrastructure. The government is taking steps to enhance the infrastructure in the country by encouraging merchants to adopt at least one electronic payment option apart from cash.”

The increase in credit card loans can also be attributed to recent collaborations to introduce new credit card offerings and payment solutions across the Kingdom.

One such collaboration involves Mastercard partnering with a digital payments technology company Loop to issue Bank Identification Numbers for credit cards. A BIN is used to determine the issuing financial institution that a credit card belongs to. They also help in the speedier execution of financial transactions and offer a shield to cardholders from identity theft and fraud.

These innovative payment solutions are expected to facilitate seamless and secure digital payments for consumers, merchants, and fintechs, thereby driving digitization in daily transactions.

This move comes at a time when the Kingdom’s small and medium enterprises and fintech community are thriving, presenting a favorable environment for digital payment solutions.

On the contrary, SAMA data revealed a slight 1 percent uptick in consumer loans, totaling approximately SR451 billion in the three months ending March. Within this category, education loans surged by 24 percent to SR8 billion, while travel and tourism loans saw a 19 percent increase to SR990 million.

Consumer loans typically involve borrowing a specific amount of money, to be repaid over a fixed period with interest. One advantage of consumer loans is that they often come with lower interest rates compared to credit card loans, making them a cost-effective option for large purchases or long-term financing needs. Additionally, consumer loans provide borrowers with a structured repayment plan, allowing them to budget and manage their debt more effectively.

On the other hand, credit card loans do not have a fixed repayment period, and borrowers can repay the borrowed amount over time, as long as they make at least the minimum monthly payments. One of the key advantages is the convenience and flexibility they offer, allowing individuals to make purchases and manage expenses without the need to carry large amounts of cash.

Additionally, they come with rewards programs, cashback incentives, and other perks that can provide additional benefits to cardholders.