Saudi Arabia's strategic efforts towards modernizing finance and broadening financial inclusion unfolded.
Saudi Arabia's fintech industry is playing a pivotal role in promoting financial inclusion, as outlined in the nation's Vision 2030 strategy. This mission is being achieved through regulatory reforms, innovation, and infrastructure development.
One of the key initiatives driving this change is the Financial Sector Development Program (FSDP). The FSDP has set a target of 70% digital payments by 2025, up from the current 40%, and has established a fintech regulatory sandbox to support startups and innovation, thereby lowering barriers to entry and enabling broader financial access.
Fintech firms are developing digital banking platforms and white-label payment solutions that offer low-cost, user-friendly services. Companies like SDK.finance and Geidea are helping to expand banking and payment access to underserved populations.
The government and financial institutions are also focusing on Islamic fintech solutions, tapping into sharia-compliant products such as blockchain-based insurance and halal robo-advisors. This approach appeals to Saudi Arabia’s 90% Muslim population and the global halal finance market, broadening inclusion for those seeking faith-aligned options.
Infrastructure platforms like NayaOne’s fully hosted fintech infrastructure platform are reducing time-to-market for digital products and enabling financial institutions to innovate rapidly in areas such as embedded finance and SME lending.
The surge in the number of fintech companies and digital payment adoption is evident. Electronic payments now account for 79% of retail transactions, and over 11,000 direct fintech jobs are expected to be created by 2024.
The Saudi Central Bank (SAMA) is central to implementing the fintech strategy, aiming to build a diversified and inclusive financial ecosystem, with fintech as a core pillar of Vision 2030’s financial inclusion goals.
Recently, Saudi fintech Tabby raised an impressive $160 million at a US$3.3 billion valuation following its acquisition of another Saudi fintech. This funding will be used to build the financial foundation for a more inclusive, digital-first Saudi economy.
Despite these advancements, Saudi Arabia still faces challenges in financial inclusion, particularly in rural areas and among SMEs. Lower levels of digital adoption, lower GDP per capita, and logistical hurdles in serving rural populations contribute to this challenge. However, with the continued growth and innovation of the Saudi fintech industry, it is hoped that these gaps will be bridged.
In line with Vision 2030, Saudi Arabia is aiming to digitize its economy, and the fintech industry is a crucial component of this transformation. The goal is to create a cashless, diversified economy that offers financial services that are accessible, affordable, and tailored to local needs.
- The Financial Sector Development Program (FSDP) in Saudi Arabia aims to achieve a 70% digital payment adoption by 2025, as part of its strategy to promote financial inclusion.
- To support innovation and lower barriers to entry, FSDP has established a fintech regulatory sandbox, which aids startups in the fintech industry.
- Fintech firms in Saudi Arabia, like SDK.finance and Geidea, are developing digital banking platforms and white-label payment solutions, expanding access to underserved populations.
- In response to the nation's 90% Muslim population and the global halal finance market, the government and financial institutions are focusing on Islamic fintech solutions, incorporating sharia-compliant products such as blockchain-based insurance and halal robo-advisors.
- Infrastructure platforms like NayaOne's fintech infrastructure platform are reducing time-to-market for digital products, enabling financial institutions to innovate rapidly in areas like embedded finance and SME lending.
- The surge in fintech companies and digital payment adoption has resulted in electronic payments accounting for 79% of retail transactions and over 11,000 direct fintech jobs expected to be created by 2024.
- Recognizing the fintech industry's importance, the Saudi Central Bank (SAMA) is central to implementing the fintech strategy, striving to build a diversified and inclusive financial ecosystem, with fintech serving as a core pillar of Vision 2030's financial inclusion goals.
