The Market Challenges for Fintech in Saudi

We have witnessed strong foundational infrastructure to support Fintech being established, guided by a clear strategic vision from the very top of Government. There is strong evidence of growth in the number of fintechs, regulations and policies issued, and funding in a very short amount of time. Despite this, there is no doubt that the Kingdom has faced challenges on its Fintech journey thus far. What are these challenges, and how are they being addressed?

5 years ago, Fintech was still largely unknown and obscure in the Kingdom, only discussed in niche circles. In 2016, Fintech Saudi was simply an idea that was being discussed within the context of the Kingdom’s Vision 2030. The Central Bank and the Capital Markets Authority respectively launched their Regulatory Sandboxes and Labs just 3 years ago in 2018. 

When Fintech Saudi was born in 2018, it was given 3 critical mandates: 

Educate (raise awareness) and Connect. 
Build (a supportive Infrastructure, ecosystem, skills & capabilities)
Accelerate and Focus (on key fintech verticals)

The last 3 years has focused on Mandate 1 and 2, and in the coming years, Fintech Saudi expects to be in a position to work more on Mandate 3 (Accelerate and Focus on key sub-verticals). Having surveyed local fintech entrepreneurs and those considering moving their operations to Saudi Arabia from abroad, Saudi Fintech was able to identify the following major pain-points (non-exhaustive), listed in order of development stage of the start-up:

In June 2020, Saudi Fintech conducted a survey for Fintechs in the Kingdom, and asked them what their biggest challenges were. The following were the results. 

The following chart plots some of the larger initiatives launched to address pain-points expressed by Fintech Entrepreneurs, and where these issues land with regards to how impactful they are to advance fintech in Saudi Arabia, as well as how difficult the pain points are to address.