First fintech licenses show Saudi Arabia is a ‘serious player’

Riyadh’s Kingdom Center Tower. The Capital Market Authority — the Saudi government’s financial regulatory authority — said it would be reviewing applications for more fintech licenses later in the year. (Reuters)
Updated 15 July 2018
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First fintech licenses show Saudi Arabia is a ‘serious player’

  • Manafa Capital and Scopeer to offer crowdfunding investment services on a trial basis
  • The Kingdom is driving development in the fintech sector as part of its plan to diversify the economy and meet the targets outlined in Vision 2030

LONDON: Saudi Arabia kick-started the evolution of its financial technology sector on Tuesday by approving the first fintech licenses for companies in the Kingdom.

The move, which granted permission to Manafa Capital and Scopeer to offer crowdfunding investment services on a trial basis, marked an important first step in realizing Saudi Arabia’s ambitions to become a fintech hub for the region, experts said.

“There’s huge potential in Saudi Arabia,” said Paul Alfing, a senior consultant at Payments Advisory Group, a Netherlands-based consultancy specialized in payments and financial transactions.

Actions like this show the Kingdom is becoming “a serious player in this field.”

This first step “is perhaps the most difficult” but subsequent licenses will follow more easily, he added.


The Capital Market Authority — the Saudi government’s financial regulatory authority — said it would be reviewing applications for more fintech licenses later in the year.

The Kingdom is driving development in the sector as part of its plan to diversify the economy away from oil and meet the targets outlined in the Vision 2030 reform plans.

Ambareen Musa, founder and CEO of souqalmal.com, a successful fintech startup based in the UAE, said: “With everyone from regulators, customers and businesses embracing fintech, and even established financial institutions ramping up investment in non-traditional technologies, the opportunity for fintech is enormous, in Saudi Arabia and in the region as a whole.”

Fintech expert Jim Marous said that new players and new innovations from existing financial services organizations across the MENA region are allowing firms to compete more effectively on a global stage.

“With innovation and digital transformation occurring across all industries, the consumers in the region are increasing their expectation of all organizations they engage with regularly. To keep pace with these expectations, new financial technology firms will emerge that are able to apply data and advanced digital technologies to improve the consumer experience,” Marous said.

“This disruption of the finance sector provides a tremendous opportunity for the Saudi fintech sector (and financial services firms in general).”

Pointing to the Kingdom’s large youth population, Alfing described a strong demand for “new solutions and products in the market.”

Competition is fierce in the region as other MENA countries look to take the leader in fintech but as the largest economy in the Arab world, Saudi Arabia is a stronger contender, Alfing said.

Decoder

What is fintech?

Financial technology — known as fintech — has been a major growth area in the Internet space. Many startups in the field aim to compete with traditional financial services operators, ranging from the use of smartphones for mobile banking, online investing services and cryptocurrency exchanges. Some of the biggest players in the sector include Coinbase, a cryptocurrency exchange, payments processing startup Stripe, and online lender SoFi. Many established players in the financial services sector have attempted to offer high-tech offerings to compete with often more agile startups.


Morocco railway has fastest journey time in Arab world

Updated 8 min 41 sec ago
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Morocco railway has fastest journey time in Arab world

  • Trains will zoom along the newly laid tracks at up to 320kph
  • Morocco puts cost of the project at 23 billion dirhams ($2.4 billion)

TANGIERS: French President Emmanuel Macron arrived in Morocco on Thursday to take part in the inauguration of a high-speed railway line that boasts the fastest journey times in Arab world.
The French leader, who was invited by King Mohammed VI, will attend a grand ceremony at Tangiers' newly renovated train station, with heavy security measures put in place.
The service between Tangiers and Casablanca, via the capital, will slash journey times between the North African country's economic hubs to just over two hours from nearly five.
Trains will zoom along the newly laid tracks at up to 320 kilometers per hour (200 miles per hour).
Morocco has heralded the project as a key step in modernising the country after weathering the Arab Spring uprisings born largely out of discontent over inequality and poor public services.
It wants to position itself as an African hub for foreign investors.
The French presidency hailed the railway line as a "flagship project of the bilateral relationship between France and Morocco."
Macron's one-day working visit "reflects the depth of bilateral relations based on a solid and strong partnership" between the two countries, said the official MAP news agency.
France hopes the high-speed rail project will demonstrate its industrial knowhow so that its companies can secure other contracts in Africa.
"We want to make this project a showcase of the modernisation of the country: It is a challenge that we can take up," the Les Ecos newspaper wrote in an editorial Thursday.
Macron is being accompanied by the heads of French companies involved in the project, including Alstom, which supplied France's famous TGV trains, the Ansaldo-Ineo group, and the Colas Rail-Egis Rail consortium.
The president is visiting Morocco four days after King Mohammed took part in World War I centenary commemorations in France.
Hundreds of workers laboured until the last minute to complete the project, which was launched in September 2011 by then French president Nicolas Sarkozy.
The Moroccan government put the cost of the project at 23 billion dirhams ($2.4 billion), nearly 15 percent more than initial estimates but well below average European prices.
Loans from France helped to cover half of that amount.