RIYADH: A significant push toward fintech modernization in Saudi Arabia has been driven by strategic investments in financial infrastructure over the past decade, according to a top official.
Yazeed Al-Nafjan, deputy governor for Financial Innovation at the Saudi Central Bank, also known as SAMA, highlighted how these investments have enabled the Kingdom to adopt a more progressive stance on emerging financial technologies to enhance sector efficiency and modernization.
“We have invested in building a financial infrastructure that allows us to be more progressive and proactive,” Al-Nafjan said during a panel discussion at the 24 Fintech Summit in Riyadh.
His comments emphasized the importance of partnering with innovators to harness the opportunities presented by fintech technologies, which are crucial in improving sectoral efficiency.
“In the case of Saudi Arabia, what we did is we have invested in the last decade in building a financial infrastructure that enables us to start to open up in terms of becoming more progressive and more proactive,” said Al-Nafjan.
He stressed the need for a dynamic regulatory framework to keep up with evolving technologies and business models, including non-bank financial institutions. “The framework has to correspond to the potential risk and potential issues that are posed by those entities,” the official explained, underscoring the balance between innovation and risk management.
Maryam Al-Suwaidi, CEO of the UAE Securities and Commodities Authority, echoed these sentiments, highlighting the complexity of the regulatory framework required for the fintech ecosystem.
During the panel, she emphasized the necessity of regulatory oversight, particularly in a region where the fintech space is not yet self-regulatory.
“There should be some form of oversight,” she said, adding that careful analysis is required to determine the appropriate level and type of supervision for different fintech services and stakeholders.
Al-Nafjan also pointed out the importance of international collaboration in managing new technologies’ risks. SAMA’s investment in an innovation hub focusing on blockchain and generative artificial intelligence reflects this approach.
Cybersecurity remains a key concern for regulators, with Al-Nafjan saying it was SAMA’s top priority. He advocated for a “principle-based approach” to address cyber risks while maintaining financial stability and fostering innovation.
Al-Nafjan also cautioned against the uncritical adoption of new technologies, particularly digital assets like cryptocurrencies, which he suggested may not solve existing problems and could potentially create new ones.
“Even if there is a global push on the usage of that technology, if it’s not solving an actual problem, why would you adopt it?” he questioned.
