Fintech Saudi opened a first-of-its-kind Financial Technology Center in Riyadh last month to stimulate growth in the fintech sector in the Kingdom. As a result, the Kingdom’s fintech market is expected to reach a transaction value of over $33 billion by 2026. According to a study, analysts are expecting a growth of a CAGR of 15% between 2021 and 2026.
Fintech Saudi is an entity that acts as a catalyst for developing the financial services technology industry in Saudi Arabia. The Saudi Bank launched it in association with the Capital Market Authority in 2018. Fintech Saudi aims to transform the country into a thriving fintech hub with a responsible ecosystem.
The Saudi market is booming.
Since the Saudi Arabian Monetary Agency (SAMA) established Saudi Payments (SADAD) and Payment Service Provider Regulations (PSP Regulations), smartphone transactions have tripled since 2019, reaching around $34 million by November last year.
Saudi Arabia has seen a big jump in venture capital investments in the fintech sector in 2021. In the first eight months of last year, it saw 16 deals totaling $157.2 million. In 2020, seven VC deals worth $7.8 million were struck. The low performance was because of curtailed financial activity across the globe due to the Covid pandemic, stated the annual report by Fintech Saudi. Last year, the Kingdom also saw a 37% increase in new fintech launches compared to the previous year.
What the Financial Technology Center provides
The new center, which has come up in the King Abdullah Financial District of Riyadh, will provide more opportunities for existing fintech investors, like Tamara, PayTabs, Lendo, and Lean Technologies, and attract new investments.
During the center’s inauguration, Saudi Central Bank Governor Dr. Fahd Al Mubarak said, “We firmly believe in the importance of integration between all parties, and the need for concerted efforts to develop this sector under an ambitious national strategy under the auspices of the Financial Sector Development Program. Which meets the aspirations of the leadership to make the Kingdom a home for financial technology.”
The Financial Sector Development Program is a part of the Kingdom’s Vision 2030 initiative, which has the ambitious target of making the Kingdom a premier fintech hub in the Middle East and the world by 2030. The vision document lays out the path to achieving that goal. The Financial Technology Center boasts two main sections in an area of 1,152.8 square meters. It includes co-working spaces, private offices, meeting rooms, event spaces, and an innovation area to cater to the needs of fintech companies. Fintech Saudi is modeled after the United Kingdom’s financial services model.
