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RIYADH: Saudi Arabia is poised to become a regional fintech hub with the launch of open banking last month. The concept provides seamless digital banking solutions to all stakeholders, besides reducing operational costs of traditional banking.

On May 24, the Saudi cabinet approved the Kingdom’s financial technology strategy to modernize the payment sector as part of Vision 2030’s Financial Sector Development Program.

Speaking about the program, Talat Zaki Hafiz, economist and financial analyst, told Arab News that the program has three main pillars.

“One of these pillars is to improve the banking and the financial sector to support the private sector, the second level pillar is to improve and enhance the capital markets, and the third pillar is to encourage the individual investment and financial planning,” said Hafiz.

He added that the approval of the strategy is set to push things forward for the fintech sector as the Kingdom is planning to digitalize at least 70 percent of financial transactions by 2030.

“We have an excellent technical and payment system in the Kingdom, one of the best in the world, one of the best in the G20, supporting such a move.

 “We are considered a youthful society with 60 percent or more of our people below 30 years of age benefitting the strategy,” he said.

We have an excellent technical and payment system in the Kingdom, one of the best in the world.

Talat Zaki Hafiz, Analyst

Hafiz added: “We are the highest per capita in using technological advancement communication tools such as Twitter, YouTube, Instagram, and Facebook. So that again would give us support to where we are heading with such strategies.”

The launch of Open Banking in the Kingdom is expected to speed up the pace of fintech development, which is clearly aligned with the Fintech Saudi initiative.

“We thank the cabinet for approving fintech as a new pillar of the Financial Sector Development Program. Fintech Saudi is keen on executing the strategy and making the Kingdom a leading fintech nation,” a Fintech Saudi representative told Arab News.

The Fintech Saudi initiative was launched by the Saudi Central Bank and the Capital Market Authority in 2018 to support the sector’s growth and create a regional financial tech hub.

The Kingdom saw a 37 percent increase in active financial technology companies in 2021 compared to the year before, according to a Fintech Saudi report.

International companies are also realizing the financial transition in the Kingdom and are planning to invest in the fintech sector in Saudi Arabia.

World Bank Group’s arm International Finance Corp. also recently evinced interest in investing in the Kingdom’s emerging financial technology sector.

“IFC has been supporting fintech for more than a decade worldwide. So, we have that core of expertise, both centrally and distributed through experts in our different hubs. And definitely, we see a lot of promise here,” IFC’s Regional Vice President Hela Cheikhrouhou told Arab News.