As recently as 2019, Fintech merely had the potential to deliver economic growth. Then came the pandemic.
Both the public and private sector turned to digital solutions in the race to find ways to support and sustain entire populations trapped behind closed doors. Investment in all manner of ‘techs’ – health, education, logistics, retail as well as financial tech – soared. In advanced economies, fintech amplified the efficiencies and improvements being derived from digital transformations across all other sectors. In developing economies, it is proving truly transformational pulling both unbanked populations and unbanked small businesses into the financial sector, opening up access to savings, credit, investments and insurance and raising financial awareness. This has, in turn, enabled governments form Saudi Arabia to the United Kingdom, from Pakistan to the Philippines, to improve and scale-up public sector services from tax collection to welfare payments; from funding social services to allocating contracts across a broader cross-section of businesses.
The fintech industry has emerged as a pre-eminent driver of economic growth at least in countries with reasonable access to broadband, the internet and cellular services and a robust financial regulatory environment.
Fintech’d Saudi Arabia
Saudi Arabia’s fintech sector is growing. According to a 2021 survey by Fintech Saudi, three out of four individuals surveyed had used at least one fintech service while just over a third indicated that they regularly used digital payment services. With internet penetration crossing 97% and mobile connections, 115%, and fintech services gaining in popularity, it would be surprising if Saudi Arabia did not have a comprehensive fintech strategy. The Kingdom has already made enormous investments in cross-sector digital technology during the pandemic particularly government services and health tech. To realize the true potential of these investments, and drive further innovation and growth across others, it is now focusing on scaling up investments across the fintech industry.
The Financial Services industry, and within it, FinTech is an important component of Saudi Arabia’s economic transformation strategy known as Vision 2030. A new national strategy aimed at increasing the sector’s contribution to the economy over the next eight years was detailed in the Financial Sector Development Plan launched in June 2022.
Saudi Arabia’s National Fintech Strategy
Top goals for 2025-2030
- Increase GDP contribution to SR4.5 billion
- increase investments in fintech companies to SR2.6 billion through domestic and foreign direct investment
- Triple the number of new fintech companies in the Kingdom from 82 to 230
- Create 6,000 jobs by 2025
- increase share of digital transactions to 70 % of all financial transactions
- Increase GDP contribution to SR13 billion
- increase investments in fintech companies to SR12 billion
- Increase the number of fintech companies to 525
- Create 18,000 jobs
So what does all this mean for the aviation industry? Opportunity. Efficiency. Flexibility. Stay tuned for the next blog in our series on fintech and aviation in Saudi Arabia.