New frameworks and regulations to 'revolutionize' the Saudi FinTech landscape

New frameworks and regulations to 'revolutionize' the Saudi FinTech landscape
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In January, SAMA issued its policy on open banking, enabling bank customers to securely manage their accounts, share their data with third parties and access bespoke financial products. (Reuters)
New frameworks and regulations to 'revolutionize' the Saudi FinTech landscape
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Paul Kayrouz
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Updated 10 May 2021

New frameworks and regulations to 'revolutionize' the Saudi FinTech landscape

New frameworks and regulations to 'revolutionize' the Saudi FinTech landscape
  • Policy on open banking, crowdfunding platforms helping to modernize Kingdom’s fintech sector

RIYADH: Saudi Arabia’s new rules on debt crowdfunding and open banking platforms will revolutionize traditional models and benefit financial technology (fintech) providers, developers, and bank customers, an international expert has predicted.

Paul Kayrouz, head of fintech, blockchain, and emerging technology at global consultancy firm PwC Middle East, said traditional banks would need to think hard about their business models to remain relevant.

“Digital banking is here to stay. So, for these incumbents, they have to decide where they place themselves on this spectrum, to what extent they want to adopt digital banking and make strategic moves to have strong relationships with their customers,” he added.

Crowdfunding, a process whereby a large group of people invests small amounts of money to collectively fund a project, has been popular since the turn of the century and took off with the launch of platforms such as Kickstarter, in 2009.

According to database company Statista, in 2019 the global crowdfunding market was valued at $13.9 billion, and that figure was forecast to triple by 2026.

In January, the Saudi Central Bank (SAMA) issued new regulations for debt-based crowdfunding in the Kingdom. The framework provided more opportunities for startups and small and medium-sized enterprises (SMEs) in the country to access capital and source funding to expand.

The rules provided a licensing structure for crowdfunding activities and outlined the minimum requirements for crowdfunding players wishing to enter the Saudi market, Kayrouz said.

He pointed out that the main benefit for SMEs was being able to raise funds and gain access to capital without having to give up a stake in their business to investors, a situation many smaller firms had been struggling within the Saudi market. The new regulations would also increase competition between venture capital (VC) organizations, and crowdfunding platforms themselves, he added, meaning improved interest rates and terms for startups.

“With the rise of these crowdfunding platforms the rules around these financial technologies may have a ripple effect on the VC ecosystem, therefore, other VCs will adopt some of these similar financial technologies,” Kayrouz said.

In January, SAMA also issued its policy on open banking. Once regulations are introduced, this will enable bank customers to securely manage their accounts, share their data with third parties, access bespoke financial products and services from the same platform, and experience smoother daily banking activities.

“Open banking is a global phenomenon, and each country has a different approach based on its market needs.

“For Saudi fintech providers and developers, this is really a big gain. The fintechs, or what we call the third-party providers, will have access to financial data that they do not have at the moment and, more importantly, access to it will be free of charge. This is really an evolution in the fintech space,” Kayrouz added.

He noted that besides technology benefits, customers would also be able to take advantage of additional products, not currently available, through open banking platforms.

As with all new forms of technology, he said that the rise of digital platforms would lead to some roles disappearing. However, in the long run, these are likely to be offset by the creation of new positions related to technology, data science, artificial intelligence and machine learning.


Beirut is the world’s third most expensive city for expats

Beirut is the world’s third most expensive city for expats
Updated 22 June 2021

Beirut is the world’s third most expensive city for expats

Beirut is the world’s third most expensive city for expats
  • Living in the Lebanese capital as an expat has now become more expensive than living in Tokyo, Zurich, or Shanghai

DUBAI: Beirut has become the most expensive city for expats in the Middle East and North Africa region, and the third globally, based on the latest “Cost of Living” survey by consultancy Mercer.
Jumping 42 places in global rankings, Beirut has been at the center of Lebanon’s economic and political collapse, aggravated by the COVID-19 pandemic and the port explosion last year.
Living in the Lebanese capital as an expat has now become more expensive than living in Tokyo, Zurich, or Shanghai. Turkmenistan’s Ashgabat ranked first, in the list of most expensive cities for expatriates, followed by Hong Kong.
Mercer comes up with the annual list by comparing the cost of more than 200 items in each city, including housing, transportation, food, clothing, household goods and entertainment.
Riyadh has become the most expensive city in the Gulf at 29th globally. Jeddah ranked 94th, the report showed.
Dubai dropped to 42nd in the list, down from 23rd last year, and Abu Dhabi ranked 56th from 39th a year earlier.
Other cities in the Gulf also became more affordable this year, the report revealed, with Bahrain dropping to 71st from 52nd, while Muscat fell to 108th from 96th. Kuwait City dropped two places to 115th and Qatar at 21 places to 130th.


Dubai government agency first to approve job titles for remote work

Dubai government agency first to approve job titles for remote work
Updated 22 June 2021

Dubai government agency first to approve job titles for remote work

Dubai government agency first to approve job titles for remote work
  • Remote work can now be done under normal circumstances, the department said

DUBAI: Dubai Municipality has become the first government agency in the UAE to approve job titles for remote work, state news agency WAM has reported.
Remote work can now be done under normal circumstances, the department said, parallel to its other work setups such as its shifting system.
The move comes as the COVID-19 pandemic has made private, and even public, workplaces rethink ways to continue their operations despite the crisis.
Workplace innovation is not new to Dubai Municipality, as it pioneered flexible work systems for government departments in the UAE in 2007.
The pandemic has also made the municipality accelerate its smart transformation, to make the remote work system effective.


Mubadala-owned GlobalFoundries invests $6bn amid worldwide chip shortage

Mubadala-owned GlobalFoundries invests $6bn amid worldwide chip shortage
Updated 22 June 2021

Mubadala-owned GlobalFoundries invests $6bn amid worldwide chip shortage

Mubadala-owned GlobalFoundries invests $6bn amid worldwide chip shortage
  • Tuesday’s expansion is in addition to the company’s previously announced plan to invest $1.4 billion in 2021 alone to expand its manufacturing capacity

SINGAPORE: Chipmaker GlobalFoundries said on Tuesday it will spend $6 billion to expand capacity at its factories in Singapore, Germany and the United States amid a chip shortage that is hurting automakers and electronics firms globally.
The US-based company, owned by Abu Dhabi’s state-owned fund Mubadala, said it will invest more than $4 billion in Singapore, and $1 billion each in the others over the next two years. The unlisted company’s Singapore operations contribute about a third of its revenue.
“I think the next five to eight years, we’re going to be chasing supply not demand as an industry,” GlobalFoundries CEO Thomas Caulfield told a media briefing. He added that the company was prioritising automotive customers.
Tuesday’s expansion is in addition to the company’s previously announced plan to invest $1.4 billion in 2021 alone to expand its manufacturing capacity.
The chip shortage, which began in earnest in late December, was caused in part by automakers miscalculating demand for semiconductors in the pandemic. It was aggravated by electronics manufacturers placing more chip orders as work-from-home practices fueled a surge in sales of computers and other devices.
Large chipmakers including Intel Corp. have warned that the shortage will last well into next year. Intel announced in March a $20 billion plan to expand its advanced chip making capacity, while Taiwan’s TSMC said in April it will invest $100 billion over the next three years.
As well, governments, including those of the United States and Japan, have intervened to urge faster supplies. Earlier this month, the United States approved $54 billion in funds to increase US production and research into semiconductors and telecom equipment.
Caulfield said funding for GlobalFoundries’ expansion plan included investments from governments and pre-payments from customers.
The $4 billion investment in Singapore is the first of a phased expansion program planned by the company for the next five to 10 years, the CEO said. He did not specify a total amount.
The new Singapore fab will add capacity of 450,000 wafers per year, taking the campus’s total to 1.5 million, and the company expects to begin production in early 2023. Most of the added production will come online by end 2023.
The factory will make chips for cars and 5G technology, with long-term customer agreements already in place. It will add about 1,000 jobs in Singapore.


Sudan to abolish official customs dollar exchange rate

Sudan to abolish official customs dollar exchange rate
Updated 22 June 2021

Sudan to abolish official customs dollar exchange rate

Sudan to abolish official customs dollar exchange rate
  • The customs dollar exchange rate has been problematic for importers historically as it has valued the local currency at a higher rate

RIYADH: Sudan has taken the decision to abolish the official customs dollar exchange rate, Asharq Business reported, citing unnamed sources.
Sudan’s Finance Minister Jibril Ibrahim earlier pledged that the government was committed to canceling the so-called customs exchange rate used to determine import duties. It comes amid ongoing fiscal reforms that have been encouraged by the International Monetary Fund and other donors.
The customs dollar exchange rate has been problematic for importers historically as it has valued the local currency at a higher rate than reflected by the black market.
Ibrahim said the government would press ahead with its liberalization program until the country’s economy recovered from previous distortions.
He also said that the subsidy for wheat, cooking gas and fuel oil that is used in the production of electricity will not be canceled this year.
Devaluing the currency is one of a number of economic reforms that Sudan hopes will help it emerge from an enduring economic crisis.

 


Abu Dhabi creates tourism company to promote the emirate

Abu Dhabi creates tourism company to promote the emirate
Updated 22 June 2021

Abu Dhabi creates tourism company to promote the emirate

Abu Dhabi creates tourism company to promote the emirate
  • Tourism 365 will support ADNEC’s broader rule to position Abu Dhabi as a key tourist destination in the region

DUBAI: The Abu Dhabi National Exhibitions Company (ADNEC) has launched a new company to develop the UAE capital’s tourism sector, state news agency WAM has reported.
Tourism 365 will support ADNEC’s broader rule to position Abu Dhabi as a key tourist destination in the region.
It will work with big industry players in Abu Dhabi and the UAE’s tourism scene, including the emirate’s Department of Culture and Tourism, as well as private firms locally and abroad.
The new company aims to increase leisure visitors in the emirate, and ultimately enhance guest experiences.
While Dubai has long been the UAE's dominant tourism market, other emirates within the country are raising their profile and positioning themselves in slightly different segments. Ras Al Khaimah, the UAE's northernmost emirate is also heavily investing in the sector and targeting outdoor adventure-seekers while Abu Dhabi has in the recent past focused on its cultural offering.
“Over the coming months, Tourism 365 will collaborate closely with other tourism-focused entities, helping to collectively grow the future of the tourism sector,” its executive director, Roula Jouny, said.
“Our subsidiaries will bolster the wider tourism offerings of not just Abu Dhabi, but the UAE as a whole, increasing visitor numbers and promoting the nation’s tourism assets across the globe,” she added.
It comes as the UAE gradually eases travel restrictions for both incoming and outgoing travelers