Saudi Arabia’s ambition to establish itself as a global fintech hub is gaining traction, with a remarkable 79% increase in financial technology startups over the past year, attracting $400 million in funding.
The figures are highlighted in the Fintech Saudi annual report, part of an initiative by the Saudi Central Bank (SAMA) in collaboration with the Capital Markets Authority (CMA) aimed at monitoring and supporting the growth of the local fintech ecosystem.
The report indicates that nearly all areas of fintech have experienced growth, particularly infrastructure activities, as the Kingdom gears up for Open Banking. Fintech Saudi has been instrumental in fostering this emerging sector through the establishment of a co-working space, the Hub, which has become a center for fintech activity in the Kingdom, along with the successful completion of the inaugural accelerator program designed to assist startups with regulatory applications.
Looking ahead, the report forecasts further expansion, including the launch of three new digital banks, along with the recent release of the Kingdom’s open banking framework, which outlines legislation, regulatory guidelines, and technical standards.
This surge in fintech activity follows the introduction of Saudi Arabia’s Fintech Strategy paper last year, which aims to boost the sector’s contribution to the gross domestic product to $3.46 billion by 2030. The strategy aims to increase the number of fintech companies operating in the Kingdom to 230 by 2025 and 525 by 2030 while also raising the share of non-cash transactions to 70% by 2025.
“During 2021/2022, we have witnessed the maturation of the fintech industry in the Kingdom,” stated Nezar Alhaidar, director of Fintech Saudi. “This year has been pivotal for the development of the fintech sector in Saudi Arabia with the launch of the Fintech Strategy, which will propel the Kingdom towards becoming a global fintech hub. We are encouraged by our progress, with 147 fintechs now active in the Kingdom.”