Saudi Arabia exceeds fintech targets

Category: AI Fintech

Posted by Lea Hogg Posted: Sep 19, 2023

Saudi Arabia is poised to significantly exceed its fintech aspirations, as the nation accelerates its journey to become a global fintech hub.

The Saudi Central Bank (SAMA) has announced a substantial expansion of its fintech ambitions, doubling its previous target for the number of fintech companies operating in the Kingdom by 2030. The move reflects Saudi Arabia’s remarkable progress in the fintech sphere and its determination to anchor itself as a global fintech leader.

2030 fintech target

During the Arab Banking Conference in Riyadh, SAMA Governor Ayman Al-Sayari (pictured above), announced the ambitious plan to increase the number of fintech companies in Saudi Arabia to 525 by 2030. This significant expansion represents a considerable leap from the initial target of 230, set just last year as part of the Fintech Strategy Implementation Plan.

Growth of the Saudi fintech sector

With only 89 fintech companies registered in 2022, Saudi Arabia has witnessed a remarkable rise in its fintech ecosystem. Saudi is now home to over 200 fintech firms, indicating its exponential growth in the sector. In 2021, Saudi Arabia had just 51 fintech companies in operation, marking a remarkable 300 percent growth in less than two years.

SAMA is actively collaborating with the Capital Market Authority to introduce comprehensive packages aimed at supporting fintech startups. The Kingdom’s fintech strategy is expected to create 18,000 specialized jobs and inject at least SAR 13 billion (US$3.46 billion) into its GDP by 2030. The fintech surge in Saudi Arabia is a pivotal part of the broader Financial Sector Development Program (FSDP). This initiative is intricately tied to Saudi Vision 2030, seeking to enhance ease of doing business, and increase the private sector’s economic contribution, attract foreign direct investment, develop the digital economy, foster an innovation and entrepreneurial culture, boost SME contributions, and create an efficient e-government.

Digital payment transactions

Among its specific targets is the goal to raise the share of digital payment transactions to 70 percent by 2025, along with 22 additional indirect objectives.

As a dominant player in Islamic finance, Saudi Arabia’s national fintech strategy has promising implications for the Islamic fintech sector, both locally and globally. Notably, fintech startups in the Kingdom are encouraged to align their business models with Shariah principles, making Saudi Arabia a natural high-potential jurisdiction for Muslim-friendly technology-mediated financial services.

In summary, Saudi Arabia’s rapid fintech expansion is indicative of the nation’s commitment to emerging as a global fintech powerhouse, with the potential to reshape the Islamic fintech landscape both within its borders and beyond.