A Review of Fintech Companies in The Kingdom of Saudi Arabia

As part of the initiative to become a global giant, the Kingdom of Saudi Arabia has continued to promote advancements in the financial sector. And with the current COVID-19 pandemic, these tech-driven changes have continued to accelerate.

But what is a fintech company in the new Saudi Arabia?

In this article, we explore fintech companies and their operations in the Kingdom of Saudi Arabia. Continue reading to understand the state of fintech in the kingdom.

What are fintech companies?

The consensus fintech meaning refers to the integration of technology into financial services — financial technology. Essentially, this fintech definition positions it as any technology that automates, manages, and delivers financial services between consumers and businesses.

In the same vein, fintech companies are institutions that deliver digital financial services to startups, SMEs, and large corporations. Financial organizations can also use fintech tools to digitize investments and payments to foster transparency, convenience, and processing speed.

The current state of Fintech in KSA

According to fintech trends 2021, the Kingdom of Saudi Arabia (KSA) is currently one of the most innovative and ambitious nations in the world. 

The country’s dedication to developing the financial sector, particularly fintech, is evident in the ongoing Vision 2030 initiative — a project that hopes to position Saudi Arabia as the premier fintech hub in the Middle East and the rest of the world by 2030.

Source: Statista

As a testament to the success of this Fintech-oriented initiative, the Saudi government has adopted the UK’s financial service model to form the new Fintech Saudi. 

Currently, Fintech Saudi works under the auspices of the Saudi Arabian Monetary Agency (SAMA), supporting innovation in the Fintech world and promoting a favorable environment for startups and entrepreneurs to thrive and compete locally and globally.

Source: FintechSaudi.com

Also, more fintech solutions have entered the Saudi financial sector since SAMA established Saudi Payments (SADAD) and Payment Service Provider Regulations (PSP Regulations). As a result, smartphone transactions have tripled since 2019, reaching a current estimate of 34 million USD. 

Unlike China and Bolivia, Saudi Arabia has embraced blockchain technology and cryptocurrencies. In the previous year, SAMA added 50 billion SAR (13 billion USD) into the blockchain fintech sector. 

Despite these changes and advancements, entrepreneurs and investors still ask: “is bitcoin legal in Saudi Arabia?”

If you want to trade bitcoin in Saudi Arabia, SAMA regulations allow peer-to-peer and B2B transactions. So, you can run a bitcoin exchange in Saudi Arabia, provided you get a license from the regulatory bodies — and these licenses are difficult to obtain.

Types of Fintech companies in Saudi Arabia

Like traditional financial institutions, fintech companies vary based on the services they offer. In Saudi Arabia, most fintech companies digitize B2B operations, facilitate P2P financial services, and connect consumers with banking services.

But Saudi fintech companies do not focus solely on businesses and consumers. Here is an extensive spectrum of fintech companies in the kingdom and the specific areas they cover.

1. RegTech (or Regulatory Technology) focuses on international and local compliance standards, most of which focus on anti-money laundering legislation and customer satisfaction.
2. Insurtech (or Insurance Tech) digitizes the insurance industry and simplifies the application process for consumers.
3. Payments — Companies like Venmo, CashApp, and PayTab handle payment portals and digital wallet services from which you can conduct online purchases.
4. Blockchain — financial houses are shifting to blockchain technology because it uses a distributed ledger to maintain records of digital payments. Source: Euromoney
5.  This alternative to centralized ledgers eliminates the risk of third-party involvement when processing transactions and smart contracts.
6. Cryptocurrency and NFTs — As the world continues to embrace the crypto era, fintech companies like Binance and Moyasar provide solutions to help users save, trade, and convert their crypto assets online. Also, these companies enable consumers to acquire non-fungible tokens (NFTs).
7. Neobanking — as financial institutions move their operations online, neobanks are becoming popular globally. Fintech companies can help you set up and navigate the heavily-regulated neobanking sector.
8. Digital banking — traditional banks can also digitize their operations by adopting digital banking software that runs on cloud-hosted databases.
9. Money transfers (P2P and B2B lending) — fintech companies like Wise and Lendo handle instant money transfers between financial entities. Individuals can also use these services to lend money and obtain digital collateral from their peers.
10. Stock trading and investment — with apps like Robinhood and WetHaq, consumers can trade stocks and invest in other financial assets. 
11. Crowdfunding — platforms like GoFundMe and Buthoor allow users to apply for and obtain funding for specific initiatives.

Top Fintech companies in Saudi Arabia

The fintech Saudi Arabia ecosystem is booming alongside the country’s economy. Although most Saudi fintech companies are yet to match their western competitors, they have shown tremendous promise over the past two years.

Here are popular examples of fintech companies in Saudi Arabia. We grouped these companies according to the official Fintech Saudi classifications. 

• Payments and currency exchange — PayTabs, SURE, HALA, Geidea, SkyBand, Moyasar, Alraedar Finance. 
• Lending and finance — Forus, Lendo, Tameed, NayFat, Tamam.
• Private fundraising — Buthoor, Scopeer.
• Insurance — BCare.
• Banking and banking infrastructure — SmartStream, Ateon.
• Capital markets — Haseed, Wahed, Mudaraba, Wethaq.
• Business tool and information — Mosul, DirectFN, RasMal, FlexxPay
• Personal finance — MoneyLoop, Wafeer, Circlya.

Final words

The Fintech sector in Saudi Arabia is a highly-regulated sphere that caters to individuals as well as global and local businesses. And thanks to the Vision 2030 initiative, financial institutions can integrate financial technology into their core banking and neobaking operations. Saudi-owned companies like PayTabs and Lendo have paved the way for fintech startups to capitalize on this initiative.

If you want to create a fintech solution that follows SAMA regulations and other international compliance standards, we have the answer. Reach out us to discuss how our fintech development expertise paired with the ready-to-go payment core solution can help you visualize and kickstart your project immediately.

References

• 21 Top Saudi Arabian FinTech Companies and Startups
• Saudi Arabia ‘holds 10 times more fintech companies than planned.’ 
• Building a FinTech ecosystem from scratch in Saudi Arabia 
• FinTech – Saudi Arabia 
• Fintech 2021 | Laws and Regulations | Saudi Arabia 
• Latest News on Saudi Arabia 
• How to Buy Bitcoin in Saudi Arabia | Buy Bitcoin in Under 5 Minutes 
• What Are the Types of Fintechs and How Fintech Make Money? 
• Fintech Saudi Annual Report