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Saudi on the way to becoming a fintech hub

Saudi’s fintech sector is gaining regional prominence thanks to determined governmental efforts to provide sandbox opportunities for an increasing number of startups in the field

The number of operating fintechs has increased three-fold in a year from 20 in 2019 to 60 this year There has been progress in regulations, infrastructure and an increasing number of investment rounds in fintech companies Start-ups are focused on digital payments, currency exchange, micro-lending, financial information aggregation, others

Saudi’s fintech sector is gaining regional prominence thanks to determined governmental efforts to provide sandbox opportunities for an increasing number of startups in the field.

ReadGCC set for FinTech surge during global COVID-19

Fintech ecosystem

Fintechnews said the fintech landscape in Saudi is rapidly developing referring to the Fintech Saudi Annual Report 2019/ 2020.

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 Capital Markets Authority (CMA) all support fintech activities.

(Below infographics are by Fintech News)

Private sector initiatives including the National Commercial Bank (NCB) and Monsha’at fintech accelerator programs as well as the launch of Riyad Bank’s fintech fund helped fueled that growth.

The number of operating fintechs has increased three-fold in a year from 20 in 2019 to 60 this year, with over 100 startups at the idea or pre-commercial stage.  

Fintech Saudi was previously launched in April 2018 by SAMA in partnership with the CMA to act as a catalyst for the development of the fintech industry in Saudi.

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.

2019 & 2020: Pivotal for fintech Saudi

Fintech Saudi director Nejoud Almulaik was quoted in Arab News saying: “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.”

Other major initiatives include 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.”

Here is a list of Saudi SAMA permitted fintechs.

Fintech has had an impact 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.  

Read: Solutions-minded Arab Fintech companies in the GCC

Saudi fintech Sandboxing  

SAMA in June welcomed nine new fintechs into its regulatory sandbox.

New joiners included Circles, Manafa Capital, Funding Souq, Nayifat Finance, and Sahlah.

The sandbox is home to over 30 fintechs and is part of the authority’s push to promote digitization across financial services, in line with the Kingdom’s 2030 Financial Sector Development Program.

Among the 30 are start-ups focused on digital payments, currency exchange, micro-lending, financial information aggregation, crowdfunding, international processing, and digital savings.

Other fintechs include BayanPay, Tap Payments, Skyband, and Lindo Financing.