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.


OPEC may cancel April meet, but hold steady on oil output: Saudi energy minister

Saudi Arabia’s energy minister Khalid Al-Falih that April may be premature to make any production decision for the second half. (Reuters)
Updated 18 March 2019
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OPEC may cancel April meet, but hold steady on oil output: Saudi energy minister

  • ‘As long as the levels of inventories are rising and we are far from normal levels, we will stay the course guiding the market toward balance’
  • ‘The consensus we heard ... is that April will be premature to make any production decision for the second half’

BAKU: OPEC and its non-OPEC partners need to reconsider if there is a need for a meeting in April, Saudi Arabia’s energy minister said on Monday, adding that there was no pressure from the United States to increase supply.
“We are not under pressure except by the market,” Khalid Al-Falih told reporters ahead of a meeting of the Joint Ministerial Monitoring Committee (JMMC) in Baku, the capital of Azerbaijan.
“As long as the levels of inventories are rising and we are far from normal levels, we will stay the course guiding the market toward balance.”
The JMMC includes major oil producers Saudi Arabia and Russia and monitors the oil market and conformity levels with supply cuts.
“There is a consensus that has also emerged that no matter what, we should stay the course until the end of June.”
Asked whether he was updated on whether the United States administration would extend the waivers it granted to buyers of Iranian crude, which are due to end in May, Al-Falih said: “Until we see it hurting consumers, until we see the impact on inventory, we are not going to change course.”
The oil producers are due to meet next in April in Vienna, but Al-Falih said this may not happen.
“The consensus we heard ... is that April will be premature to make any production decision for the second half,” Al-Falih said.
“We may not have a meeting in April,” he said, adding that the JMMC may recommend this later on Monday.