Advancing Innovation: The Latest from Fintech Saudi
On its path to make Saudi Arabia a top fintech destination, the Kingdom has embarked on an ambitious initiative that involves significant investment and commitment. As part of the Financial Sector Development Program (FSDP), the goal is to establish 525 fintech companies by 2030.
Central to this growth are the efforts of the Saudi Central Bank (SAMA) and the Capital Market Authority (CMA), which play a pivotal role in fostering a conducive environment for fintech development. By implementing supportive policies, regulations, and frameworks, these institutions aim to enhance the fintech ecosystem and attract further investments and innovations in the sector. As Saudi Arabia continues to advance its fintech agenda, the collaboration between regulators and industry stakeholders will be crucial in realizing its vision for the future.
Most notable achievement in 2023 (CMA and SAMA) is the fintech enablement initiative designed to support entrepreneurs and startups operating within the fintech sector, is the program called MAKKEN (click here to visit the site). By offering subsidized assistance in technology, cloud services, and cybersecurity, the program aims to alleviate the financial burdens faced by early-stage fintech companies. This support not only helps to lower operational costs but also ensures that startups can maintain compliance with high technical and technological standards. The primary objective of MAKKEN is to empower these startups, allowing them to concentrate on product development and innovation.
The latest concluding statement of the International Monetary Fund's (IMF) 2024 Article IV Mission underscores that Saudi Arabia's strategic financial sector reforms have yielded positive outcomes. With 216 fintech companies already in operation, as reported in the 2023 FSDP Annual Report, the Kingdom is on track to meet its target of 525 fintech companies by 2030. Notably, in December 2023, the CMA licensed the first securities platform in the Kingdom offering algorithm-based advice to clients (robo-advice).
Efforts are ongoing as SAMA further expands its support for the FinTech sector. In June 2024, SAMA granted permission to two startups to operate in SAMA's regulatory sandbox. ‘Sulfah’ is set to introduce a peer-to-peer (P2P) lending platform, while ‘Wadaie’ will launch a Time Deposit Aggregation platform. These initiatives aim to foster financial innovation and enhance the range of services available to consumers in the Kingdom. The regulatory sandbox provides a controlled environment for these startups to test their solutions while complying with SAMA's guidelines, promoting a safe approach to financial technology advancements.
Join and reach out to me in the upcoming and highly anticipated event, 24 FINTECH 2024: Saudi Arabia's Flagship Fintech Event, taking place from September 3rd to 5th, 2024. This exciting event will be held at the Riyadh Front Exhibition & Conference Center in Saudi Arabia, bringing together industry leaders and innovators.
