RIYADH — Saudi Arabia is making significant strides toward its Vision 2030 goal of becoming a global FinTech hub, driven by the Financial Sector Development Program (FSDP). KPMG’s latest report, “Unlocking the Future: An Overview of the FinTech Opportunity in Saudi Arabia,” was unveiled at FinTech 24, an event organized by FinTech Saudi, in collaboration with key institutions like the Saudi Central Bank (SAMA), the Capital Market Authority (CMA), and the Insurance Authority (IA).
The report highlights Saudi Arabia’s FinTech growth amidst global challenges in the first half of 2024, fueled by geopolitical uncertainty and high interest rates. Despite these obstacles, FinTech investment in the Kingdom surged, with over $1.14 billion raised between September 2020 and December 2023, including a 231% increase in 2023 alone.
“Saudi Arabia’s vision is driving a FinTech revolution, reshaping its economy with digital payments and Buy Now Pay Later (BNPL) products,” said Antony Ruddenklau, KPMG’s Global Head of Financial Services Innovation and FinTech.
The Kingdom has witnessed a sharp rise in FinTech companies, from 89 in 2021 to over 226 by 2023, surpassing FSDP targets. Initiatives like regulatory sandboxes, coupled with strong support from SAMA and CMA, have fostered a favorable ecosystem for startups and digital payments. By 2023, non-cash payments exceeded 70%, aided by robust payment systems such as Mada and SADAD.
Beyond payments, the sector is expanding into cybersecurity, RegTech, SME lending, trade finance, ClimateTech, and digital banking. Alternative financing solutions like BNPL and debt crowd-funding are experiencing rapid growth, with BNPL customers increasing from 76,000 in 2020 to 10 million by 2022.
SAMA’s launch of the Open Banking Lab in 2023 has further accelerated FinTech adoption, while B2B solutions are addressing challenges for SMEs. Investments in clean energy innovation and sustainable finance are also shaping the future, with $443 million allocated between 2018 and 2023.
Looking ahead, Saudi Arabia is poised for growth in digital banking, Web3, and the metaverse. High-growth sectors like digital payments, alternative financing, and SME lending offer promising opportunities for investors, founders, and established organizations. With success stories like Tamara and Tabby achieving unicorn status in the BNPL space, Saudi Arabia’s FinTech future looks bright.
