Saudi’s fintech scene books ‘remarkable progress’ with more to come

02 July 2024 Consultancy-me.com 3 min. read

Saudi Arabia’s fintech sector has grown rapidly over the past years, and is poised for further growth, with the segment at the forefront of innovation and the government maintaining major impetus for expansion. That is according to a new report from Arthur D. Little.

In its report, strategy consultancy firm Arthur D. Little identified over 200 fintech’s currently active in the Kingdom, up from 89 the year previous. Taking a broader lens on the sector, the researchers observed “remarkable progress” over the past five years, a development which has lifted KSA’s fintech scene into a regional leader.

The success of Saudi’s fintech landscape is based on a number of developments said the report, including strong government support, an expanding investment base, and a growing uptake of fintech products by banks and consumers.

Saudi’s fintech scene books ‘remarkable progress’ with more to come

“Saudi Arabia is prioritizing visionary leadership and proactive policy-making to cultivate a thriving fintech landscape,” said Arjun Vir Singh, partner at Arthur D. Little. “The Kingdom is not only addressing, but capitalizing on strategic areas of improvement to propel forward its national economic ambitions of Vision 2030.”

The government is playing a key role in progress. Pivotal programs such as Fintech Saudi and the Fintech Regulatory Sandbox have driven advancements, while the Saudi Arabian Monetary Authority (SAMA) took major strides in developing a regulatory framework that stimulates innovation.

The SAMA has also established a sandbox environment where fintech innovation can be tried and tested before it goes live, facilitating a smooth transition into the open market.

In addition, government-led entities like the Saudi Venture Capital Company have provided substantial start-up funding to complement private sector investments. Overall, by the end of 2023 investments amounting to over SAR 4 billion (~$1 billion) have flown towards fintech startups from local, regional and global investors.

“The Kingdom’s commitment to fostering a dynamic and inclusive fintech ecosystem is evident, with SAMA and CMA’s regulatory enhancements and the strategic infusion of capital from Saudi based investors into the sector,” said Vir Singh.

More to come

Looking ahead, Arthur D. Little’s report suggests that the outlook for KSA’s fintech scene is bright. Its impact is also set to increase further, as more financial institutions embed fintech solutions in their offerings or operations, and more consumers adopt fintech products to make their life more convenient.

“We project a future where fintech not only thrives as a sector but acts as a cornerstone in realizing the broader Vision 2030 objectives of Saudi Arabia. Continued dedication to innovation and adaptive strategies are pivotal in maintaining the Kingdom's leadership in the fintech arena,” said Vir Singh.

Further reading: Middle East fintech industry could triple in next two years.

To ensure the Saudi sector maintains its growth momentum, Arthur D. Little identified a number of priorities for the coming years, including enhancing international positioning, fostering international partnerships, streamlining regulatory frameworks, broadening funding avenues, cultivating talent, and optimizing infrastructure investment.