Saudi Arabia to see more fintech unicorns soon: official

Web DeskWeb Editor

24th Aug, 2021. 10:47 am

JEDDAH: Fintech Saudi was launched in 2018 by the Saudi central bank and the Capital Market Authority, to turn the kingdom into an innovative fintech hub, Arab News reported.

It has a digital strategy that supports regulators and the growing fintech startups that have emerged in the kingdom over the last two years.

These moves are in line with Saudi Arabia’s Vision 2030 investment plan, to support entrepreneurship and promote financial services technology.

The Fintech body doesn’t see itself as a technical incubator, the director of Saudi Fintech Nejoud Almulaik told Arab News.

Instead, it works with the new firms in early development and incubates them, and also supports the wider growth of the industry itself.

Ninety-three per cent of those asked in a poll said they prefer banking online, according to a Saudi Fintech survey. Almulaik said the role of Saudi Fintech is to support that landscape.

Millennials, people between 25 and 40, are more tech-savvy and make over 80 per cent of their payments online, according to the report, helped by the government’s strong technology infrastructure.

Digital payments unit Stc pay became a unicorn, a privately-held startup valued at over $1 billion, after Western Union snapped up a 15 per cent stake in the business for $200 million in November. Almulaik said she expects to see more Saudi unicorns soon.

This year, Fintech Saudi plans a range of activities, including another Fintech Tour, following on from last November’s virtual event, which was the largest cluster of fintech events to take place in the Middle East, made up of 24 workshops, lectures and panel discussions.

It will also work with the Saudi Central Bank and Capital Markets Authority to update the country’s fintech strategy, which will include talks with the Ministry of Education, the Ministry of Human Resources and other data and cyber-security agencies.

The new programmes will be announced by the end of this year or early next year, Almulaik said.

More than 80 per cent of those asked in the Fintech Saudi survey said they would like to see more easy digital payment systems.

While between 60 per cent and 20 per cent named digital investment and saving as their top priority.

Almulaik said that many of these types of apps and online systems are being tested and will be fully licensed soon.

Digital currencies in Saudi Arabia have not been formally adopted, Almulaik said, but the kingdom is seeing the use of e-wallets, where the money is actually reflected in the bank account as riyals and can be withdrawn in cash, as well.

She said the digital currencies are still under development by the central banks, as the central bank digital currency, and testing is taking place.

G20 central banks are actively at work on how digital currencies will fit into their economies, and Saudi Arabia is part of that process, Almulaik added.

The director said the digital identity is recognised in the fintech strategy as a pillar of empowerment for financial technology.

She said the digital identity at this stage, such as the Tawakkalna app, developed during the pandemic, and the Absher government services app, shows this area is progressing well in Saudi Arabia.

Almulaik said that Saudi Arabia is an open market that welcomes international firms establishing businesses in the kingdom, and investment in the country’s fintech industry.

“Most of the fintech firms in Saudi Arabia are locally driven, with 80 per cent of fintechs locally headquartered, while 20 per cent are a combination of local and international investments,” she added.

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