- KSA has begun working on expanding its Fintech Hub vision.
- The country has already deployed blockchain technology in its central bank.
- SAMA and CMA have launched Fintech Saudi to support the fintech industry in the region.
There’s no denying the massive boom in Fintech since the financial crisis back in 2008. The reason we’ve made it this far, right here right now, is because of rapid advances in the Fintech sector.
Removing the middle man has given users more control and security over their assets now more than ever. Though crypto started out a little sluggish, it took off over the last couple of years.
No country wants to miss out on the chances this technology has to offer. Many nations are buckling down and working hard to up their Fintech game.
Saudi’s Fintech Hub Vision
The Kingdom of Saudi Arabia (KSA) has set in motion careful plans to create a Fintech hub within its empire. The Saudi Arabian Monetary Authority (SAMA) together with the Capital Market Authority (CMA) has launched Fintech Saudi. To set itself as the regional hub for future investors, KSA launched an initiative to promote its fintech sector.
SAMA already mentioned its plans to deploy blockchain technology within the kingdom in June last year. KSA already planned to inject funds into the banking sector. Hence, they plan to use the blockchain for money transfers to deposit a part of that liquidity.
The nation aimed to boost its potential by absorbing new innovations. KSA’s goal is to keep moving with financial global trends and that goes for its central banks too.
With Fintech innovations in place, the empire can try new technologies, test its offers, and analyze the results. Until finally, they can induct the best-suited technology, fit for their future. It is a feat aimed at boosting the nation’s overall fiscal goals.
The Drive for Innovation
It’s not surprising that KSA is picking up blockchain technology. Most of the region has already embraced the potential that comes with it. For instance, Bahrain’s Rain crypto exchange system is being used by a huge chunk of the Middle East.
The platform has welcomed users across the region since its launch in 2017. It saw another boost in users after its licensing in 2019. But, let’s not forget, the biggest factor that drove new crypto traders onto the platform over the last year — Covid-19.
The Middle East has seen a whole range of new users join in on the crypto trading experience. A lot of factors may have pushed them into it but the pandemic is a huge one. Exchanges like Rain have begun to expand their business to meet these ever-growing demands in crypto technology.
Furthermore, Fintech Saudi’s annual report shows that the fintech industry is growing at over 18% every year for the last three years. Moreover, payments cover two-thirds of the market making it almost 98% of the total user base. Finally, 30% of fintech transfers cover personal finance. The report concludes by saying that transfer values alone will reach $33 billion by 2023.
Achieving The Dream
Turning a nation into a Fintech Hub is a big goal. Reaching this goal may take more than just a couple of years. But Saudi has already set its gears in motion. Its blockchains have been deployed.
Director of Fintech Saudi, Nejoud Al-Mulaik says that painting the nation as a Fintech Hub will mean the country has to establish three pillars.
The first is to set a firm soundbox process to support regulation. The second is to link financial sector workers with service providers. The third is educating the masses with academic backing.
Saudi’s Fintech ecosystem keeps an active record of its partners. The Kingdom plans on supporting local and global investors via its physical hub. The King Abdullah Financial District will open its doors in April 2021.
It will be exciting to see KSA progress with this venture over the next few years. Saudi is looking forward to seeing a transparent, decentralized, and digital global financial system. And, Fintech Saudi is leading the charge.