Saudi Arabia: The Path to Becoming a Leading Fintech Hub

In Arthur D. Little’s latest report, Dr. Mohammad Nikkar & Arjun Vir Singh outline the potential and challenges for KSA to become a leading fintech hub

Among its many efforts to boost industrial action across multiple sectors in the past few years, the Kingdom of Saudi Arabia (KSA) has made great strides to develop fintech into a flourishing national industry.

Diversified financial services have increased fiscal contributions to KSA’s national economy, as it looks to match the robust fintech economies in Western markets. 

However, for Dr. Mohammad Nikkar and Arjun Vir Singh, authors of Arthur D. Little’s latest report, challenges remain for KSA in its attempts to become a leading fintech hub. 

Below, we run through the details of the report, analysing KSA’s fintech journey so far, the current challenges and how they can be overcome. 

KSA: The fintech journey so far

Fintech growth in KSA has been rife since 2018 when the Saudi Arabian Monetary Authority (SAMA) and the Saudi Capital Markets Authority (CMA) initiated a fintech growth journey by establishing Fintech Saudi. 

Nikkar and Singh expand: “Fintech Saudi continuously strives to boost, support and represent the fintech industry in KSA through initiatives such as its Accelerator programme, Career Fair, Fintech Tour and the Summer Sessions. 

“Since the launch of Fintech Saudi, there has been a 20-fold increase in the number of fintechs operating in the kingdom. Over SAR 4bn (~US$1bn) has been invested into fintech companies in KSA, and over 100,000 people have engaged in fintech-related events, training courses and internships organised by Fintech Saudi.”

Fintech Saudi was just the start, though. In 2022 KSA marked the next stage of fintech development based on six key pillars: 

1 - Developing KSA as the fintech hub for the Middle East

2 - Creating a regulatory environment supportive of growth and innovation 

3 - Funding for start-ups 

4 - Training and skill enhancement 

5 - Accelerating support infrastructure 

6 - Driving local and international collaboration

This strategy is part of the Kingdom’s Vision 2030 plan. 

KSA Vision 2030 - Four key objectives:
  • Establish at least 525 fintech companies (versus 200 in 2023)
  • Open 18,000 fintech job opportunities (versus around 5,400 in 2023)
  • Account for SAR $13.3bn in direct GDP (versus around $1 billion in 2023)
  • Achieve SAR $12.2bn in direct venture capital (VC) contributions (versus $1.4 billion in 2023)

KSA: Challenges to 2030 fintech plans 

To meet these growth aims, KSA must overcome key challenges, as laid out by Nikkar and Singh. 

They say: “While KSA’s fintech growth is impressive, increasing its visibility and distinctiveness will help it stand alongside established global fintech hubs. This involves clarifying its unique ecosystem offerings to global entrepreneurs and investors.”

In addition to enhancing its international positioning, the Arthur D. Little experts suggest fostering further international partnerships is equally important to support Saudi fintechs in their international expansion efforts. 

Dr. Mohammad Nikkar, Arthur D. Little

Indeed, they suggest support for KSA fintechs should be enhanced by establishing new funding avenues, attracting more accelerators and incubators to stimulate a more dynamic investment climate. 

Costs are a challenge for Saudi fintechs too, particularly when it comes to infrastructure. “Initiatives to reduce the cost of essential technology infrastructure are being explored. These efforts aim to balance compliance with local data regulations and the need for advanced application programming interface (API) integration and data accessibility," say Nikkar and Singh. 

Then, as in many markets, there are regulatory issues to address. The experts say: “Efforts to simplify the setup and licensing processes are underway to create a more navigable regulatory environment for fintech entities. Continued enhancements in this area will support both local and international ventures.”

Tackling key challenges: Prospects for a leading KSA fintech hub

Arjun Vir Singh, Arthur D. Little

While the KSA’s fintech journey has so far been rapid, with significant progress in digital payments, alternative financing, and financial product aggregation, for Nikkar and Singh, its future success comes down to overcoming key challenges. 

“These challenges are not just obstacles,” they say, “they also provide great opportunities for innovation and growth. Addressing issues related to global positioning, regulatory frameworks, market and funding, talent acquisition, technology infrastructure and collaboration is imperative. 

“The KSA fintech ecosystem must continue to innovate and adapt, leveraging its strengths.

“The future of fintech in Saudi Arabia is not just about technological advancements or financial products. It is about creating an ecosystem that is resilient, inclusive and capable of supporting the nation’s broader economic goals and nurturing a culture of innovation where start-ups and established players alike can thrive.”


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