Mohammad Nasrullah, head of transactional banking, Arab National Bank, speaks at a keynote session during the World Fintech Show in Riyadh, Saudi Arabia on Dec 6, 2022. (PROVIDED TO CHINA DAILY)

RIYADH – Saudi Arabia is rising to become a regional fintech hub as the country undergoes massive economic transformation driven by government policies and a thriving private sector, experts at a fintech event in Saudi Arabia said. 

As the largest economy in the Middle East with one of the highest technology penetration rates, as well as a large proportion of young population, Saudi Arabia has a distinctive advantage to be the regional fintech hub, said Haitham Al-Sahafy, co-founder and CEO of Fintactics, a fintech venture builder in Riyadh. 

"When it comes to the market, having the largest GDP with the largest technology penetration rate (is) super attractive for any business, regardless whether it’s fintech or something else,” said Al-Sahafy, speaking to China Daily at the World Fintech Show in Riyadh on Dec 6. 

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Under the theme “Unleashed: Saudi Arabia's Thriving Fintech Ecosystem”, the event, held from Dec 5 to 6, was organized by Riyadh-based Performance Ryada Events Co and managed by global business events and consulting firm Trescon.

Forty-one percent of Saudi fintechs have international operation. Companies in digital banking and payment are the top segments in international expansion.

Kholoud Al-Harbi, Endeavor Saudi Arabia 

The national development strategy Saudi Vision 2030 will create huge opportunities for the financial sector, said Wasif Hasan, senior director of global trade and supply chain at Al Rajhi Bank, one of the world's largest Islamic banks by capital. 

The Saudi Vision 2030 aims to reduce the dependence of Saudi Arabia on the oil sector and promote the development of the private sector. 

A key part of the framework is the Financial Sector Development Program, Wasif Hasan said in a keynote speech, adding the Fintech Strategy Implementation Plan was launched in May with an aim to accelerate the kingdom’s fintech sector on the global stage and make Riyadh a global fintech hub. 

With the fintech strategy, the number of fintech companies in the kingdom is expected to reach 525 by 2030 from the current 155, he said, adding that the strategy will help contribute $3.5 billion to the GDP and over 18,000 new jobs by then.

In line with the Vision 2030 plan that looks at converting a predominately cash economy into digital, Mohammad Nasrullah, head of transaction banking solutions at Riyadh-based Arab National Bank, or ANB, said several initiatives have been undertaken by Saudi Arabia to create an operational space for fintech companies.

With a share of 30 percent, most fintech companies in Saudi Arabia are in the payment and currency exchange category, he said. 

Banking-as-a-Service, a set of services offered by different financial services companies that can be subscribed to by entities in need, has become important for fintech companies to avail banking services in a seamless way, the ANB executive said.

Like many tech startups, international expansion is a major goal for fintech companies as well, said Kholoud Al-Harbi, entrepreneur selection and growth and research insight associate at Endeavor Saudi Arabia. 

“Forty-one percent of Saudi fintechs have international operation. Companies in digital banking and payment are the top segments in international expansion,” said Kholoud, citing a report by her non-profit organization. 

As for women employment in the fintech sector, Al-Harbi said most common positions are in the human resources, legal and compliance, and engineering departments. 

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During the World Fintech Show, Fintactics launched a $40 million fintech-dedicated venture capital fund to support fintech ventures in Saudi Arabia and beyond. 

“The fund’s focus will be on early stage ventures. That is where we see an opportunity,” said Al-Sahafy, noting that the fintech landscape in Saudi Arabia is “booming and hot” with a lot of government support, especially the fintech strategy.  

Though the company’s prime focus is currently on the Gulf region, Al-Sahafy said he is happy to collaborate with partners from China to jointly create value and build ventures as the Asian giant is taking the lead in many dimensions in the fintech sector.

Contact the writer at kelly@chinadailyapac.com