24 Fintech, the Saudi Vision 2030’s economic bet

In the framework of the first 24 Fintech conference held in Riyadh on 3, 4 and 5 September, the Saudi Kingdom, together with experts and leaders of the economic sector, has bet on the transformation of national banking by a digital system that allows greater regulation and provides support to the economic objectives that are part of the Saudi Vision 2030 plan, under the slogan ‘The future of digital banking’.

جـولة أصحاب المعالي والسعادة في مؤتمر #٢٤فنتك

🗓️| 5-3 سبتمبر 2024
📍| مركز واجهة الرياض للمعارض والمؤتمرات

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— 24 Fintech (@24Fintech) September 3, 2024

The conference was attended by over 300 exhibitors, more than 350 investors and more than 26,000 visitors. The event began with a speech by the Saudi Arabian Minister of Finance, Mohamed Al-Jadaan, in which he emphasised the importance of the use of Fintech technologies and stated that the country’s goal is to achieve 80% of payments using these technologies. 

According to the Ministry of Finance, there are currently 224 fintech companies operating in the domestic market, exceeding the industrial programme’s target of 168 companies. ‘The Saudi target is to reach 525 companies operating within the sector by 2030, which would represent an increase of more than 50 per cent, compared to early 2023 data,’ said Mohamed Al-Jadaan. 

The technological literacy (a person’s ability to perform different tasks in a digital environment) of the Saudi population is 80%, a more than favourable framework for the implementation of this technology. So much so that 70% of payments in the retail sector in 2023 were made through digital banking systems. 

Saudi Arabia is betting heavily on new digital financial technologies as a new way to diversify its economy, which is highly dependent on hydrocarbons. The world’s largest oil producer is well on its way to becoming the leading regional hub for electronic and digital payments companies, with billions of dollars invested in the financial services technology industry. It competes with the United Arab Emirates and Qatar. 

Global industry revenues are expected to exceed 1.5 trillion dollars annually, with the increasing importance of sustainable growth through a better culture of innovation, an improved regulatory environment, developed digital infrastructure, attracting excellent talent and investors, and developing their skills. 

In 2018, the number of companies operating in Saudi Arabia in the financial technology sector was no more than 10, and by the end of 2019, it doubled to 20 thanks to the promotion of Vision 2030. According to the Saudi Ministry of Finance, the number of companies increased to 60 in the pandemic year, before registering 82 companies by the end of 2021, 147 companies in 2022 and 216 companies by the end of 2023. 

Since the first fintech launch in 2018, more than 100,000 people from 216 companies have benefited, according to the General Authority for Small and Medium Enterprises, triggering a mobilisation of more than 1.9 billion dollars.

Ten years ago, domestic electronic payments in retail markets did not exceed 5% of total payments, but today they have achieved remarkable growth. 

Ayman Alsayari, chairman of the Central Bank of Saudi Arabia, confirmed that the number of Fintech companies operating in the country has increased by 57% since the beginning of 2023. ‘Fintechs will become an engine of growth as they penetrate the financial system,’ Ayman Alsayari said. 

لقطات من كلـمة معالي محافظ البنك المركزي السعودي أ. أيمن السياري
@SAMA_GOV
في افتتاح مؤتمر #٢٤فنتك pic.twitter.com/I6COe86BKS

— 24 Fintech (@24Fintech) September 3, 2024

He noted that financial technology has great potential to enhance its role in changing the future landscape of Saudi Arabia’s financial industry, and expects it to become an engine of economic growth as it acquires a larger share for the financial system. Saudi Vision 2030 data shows that fintech development in Saudi Arabia will increase its contribution to GDP from 267 million dollars in 2016 to more than 3.54 billion dollars by 2030. 

Industrial companies believe that Saudi Arabia, with domestic product sales valued at more than 1 trillion dollars, will become a thriving environment for the Fintech industry in the coming years.