Saudi Arabia is more than doubling its target for fintech companies as it is on track to achieve its initial goal years ahead of its 2030 deadline, underscoring the Islamic finance giant’s phenomenal progress toward anchoring itself as a global fintech hub.
While addressing the Arab Banking Conference in Riyadh earlier this week, Saudi Central Bank (SAMA) Governor Ayman Al-Sayari revealed that the regulator aims to increase the number of fintech companies in Saudi Arabia to 525 by 2030.
This is a big leap from the initial target of 230 set last year under the Fintech Strategy Implementation Plan.
The new target may seem ambitious, but the Kingdom has the milestones to justify its confidence. From just 89 fintech companies registered in 2022, Saudi is now home to over 200 fintech firms as at the end of August, according to Ayman.
The country has been on an impressive upward trajectory: in 2021, it had 51 fintech companies in operations, meaning its fintech community has grown by about 300% in less than two years.
To further catalyze the development of the sector, Ayman confirmed that SAMA is collaborating with the Capital Market Authority to introduce a program comprising comprehensive packages to support fintech start-ups.
The Kingdom’s fintech strategy is expected to create 18,000 specialized jobs, as well as to inject at least SAR13 billion (US$3.46 billion) into its GDP by 2030.
Spearheaded by the Financial Sector Development Program (FSDP), the FinTech Strategy Implementation Plan has been designed with the overarching goal of realizing Saudi Vision 2030, namely through: enhancing ease of doing business, increasing the private sector’s economic contribution, attracting foreign direct investment, developing the digital economy, nurturing and supporting an innovation and entrepreneurial culture, increasing SME contribution to the economy and developing an e-government.
One of its targets is to raise the share of digital payment transactions to 70% by 2025, in addition to 22 indirect objectives.
As one of the world’s most influential Islamic finance powers, Saudi Arabia’s national fintech strategy bodes well for the Islamic fintech sector, locally as well as globally. It is understood that fintech start-ups in the Kingdom are required to align their business proposition with Shariah principles even in the absence of explicit instructions, making Saudi a natural high-potential jurisdiction for Muslim-friendly technology-mediated financial services.