Fintech Fortis targets Saudi Arabia’s SME sector

Fintech Fortis targets Saudi Arabia’s SME sector
For the coming year, Fortis’s objective is to solidify its presence in the UAE and lay a groundwork for potential expansion across the MENA region. (SPA)
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Updated 09 June 2024
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Fintech Fortis targets Saudi Arabia’s SME sector

Fintech Fortis targets Saudi Arabia’s SME sector
  • Firm outlines goals and long-term vision for its operations in the region

CAIRO: Fintech companies continue to expand in Saudi Arabia, with the nation increasingly becoming a magnet for financial technology. 

UAE-based Fortis is bringing its one-stop point of sale, customer relationship management, order management system, and payments solution to support small and medium-sized enterprises in the Kingdom. 

In an interview with Arab News, Arseny Kosenko, executive vice president of Fortis, outlined the company’s immediate goals and long-term vision for its operations in the region, particularly in Saudi Arabia, where they see substantial growth potential aligned with the Kingdom’s Vision 2030. 

Fortis is strategically launching in the UAE, setting the stage for further expansion into Saudi Arabia and other Middle East and North Africa countries. 

“We aim to successfully launch in the UAE market and create opportunities for expansion into other countries,” said Kosenko.

A strategic Kingdom 

Over the long term, Fortis aims to deeply influence the Saudi market by delivering high-quality products and services tailored to the unique needs of Saudi businesses and consumers. 

“We will be able to assist small businesses in growing in line with the plans and Vision 2030,” Kosenko stated. 

The goal is to enhance the operational capabilities of SMEs, thereby contributing to gross domestic product growth and enhancing the technological perception of the Saudi market. 

Fortis plans to cater extensively to both domestic users and tourists, particularly during significant events like Expo 2030, by improving merchant and customer interactions through their advanced omnichannel solutions. 

For the coming year, Fortis’s objective is to solidify its presence in the UAE and lay a groundwork for potential expansion across the MENA region. 

The company aims to empower businesses to thrive in a digital landscape by enhancing customer engagement and operational efficiency through their comprehensive digital tools. 

SMEs are a crucial segment for us, and how they engage with their clients shapes the evolution of our product.

Arseny Kosenko, EVP of Fortis

In response to specific needs within the Saudi market, Fortis is developing tailored features in their omnichannel platform to comply with local regulations and business practices. 

“Different regions, including Saudi Arabia, may require various features or regulatory considerations for businesses,” explained Kosenko. 

The company plans to adapt its pricing policies, marketing strategies, and partnerships to align with local business environments. 

To comply with Saudi Arabia’s evolving regulations, Fortis is committed to proactive monitoring of regulatory changes, maintaining strong communication with authorities, and ensuring that their team is well-trained in compliance requirements. 

This approach is supported by technology and automation to streamline compliance processes effectively, he explained. 

Through these strategic initiatives, Fortis is setting a course to become a pivotal player in Saudi Arabia’s digital transformation, supporting the Kingdom’s economic diversification efforts and enhancing the competitive edge of local businesses in the global marketplace. 

“Saudi Arabia is actively enhancing SME financing through regulatory support and digital transformation initiatives. This aligns perfectly with Fortis’s mission to empower SMEs with digital tools that enhance their operations and market reach.” 

While specific details about the official launch and local office establishment in Saudi Arabia are still under wraps, Kosenko mentioned that Fortis is focused on building effective partnerships that will simplify and enhance business operations, making them more efficient and improving customer relationships and overall business performance. 

As for the company’s market position, Kosenko highlighted the importance of SMEs, stating, “SMEs are a crucial segment for us, and how they engage with their clients shapes the evolution of our product.” 

Fortis aims to become an indispensable omnichannel platform that bridges the gap between merchants and customers, enhancing interactions and technological experiences for SMEs while also providing value to larger stakeholders like banks and utility companies. 

Regarding industry evolution, Kosenko emphasized the shift from traditional payment terminals to more sophisticated POS systems that support comprehensive business management including transactions, inventory, and customer data. 

“We’re seeing an increase in the adoption of order management systems that facilitate a seamless omnichannel experience for customers,” he said. 

Fortis plans to leverage these trends by continuing to prioritize customer focus and simplifying payment processes, ensuring seamless interactions between sellers and buyers through a user-friendly interface.

Business fundamentals 

Kosenko highlighted the unique hurdles SMEs encounter, stating, “Unfortunately, many SMEs lack the expertise and resources to navigate areas like customer data collection, personalization, and artificial intelligence, putting them at a competitive disadvantage.” 

Positioned at the dynamic crossroads of Europe and Asia, the Middle East is a burgeoning hub for entrepreneurship, with SMEs forming the backbone of the economy. 

“In the UAE, SMEs make up about 94 percent of all companies and employ over 86 percent of the private sector workforce,” Kosenko added, referencing a report by the UAE’s Department of Economic Development. 

Similar growth and opportunities are evident in Saudi Arabia, where initiatives such as Expo 2030 are catalyzing SME expansion, he added. 

 “Our model is software as a service, with clients paying a monthly or annual fee for licenses,” Kosenko explained. This model positions Fortis as a pivotal player in the region’s tech ecosystem, enhancing SME capabilities to manage their operations more efficiently, he added. 

Despite its recent market entry, with operations commencing just three months ago, Fortis is already showing promising revenue growth. 

“It’s premature to discuss profitability at this stage,” said Kosenko, signaling a cautious but optimistic outlook for the company’s financial trajectory. 

The motivation behind Fortis’s inception was clear. “We are focusing on a promising niche in the MENA region, which comprises between 19 and 23 million small businesses,” noted Kosenko. 

He further detailed the key performance indicators that guide Fortis’s strategy in the region: “We focus on active and paying customers, gross profit, lifetime value, and churn.” 

Fortis has successfully raised $20 million in April in investment led by Opportunity Venture, with several tranches allocated throughout 2024. 

Kosenko shared insights into how these funds are poised to propel the company’s expansion plans, particularly in the MENA region. 

He highlighted that while specific expansion plans are still under deliberation, Saudi Arabia is a strong candidate for their growth strategy due to its large market and numerous development projects. 

Regarding future funding, Kosenko expressed satisfaction with the current level of financial support, emphasizing that the focus is on leveraging this investment to accelerate product development and market introduction. 

“Our primary objective is to swiftly bring our innovative solution to market, leveraging the financial support to ensure a successful market entry,” he explained.


Global AI Summit in Riyadh to host top-level discussions on AI impact 

Global AI Summit in Riyadh to host top-level discussions on AI impact 
Updated 21 July 2024
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Global AI Summit in Riyadh to host top-level discussions on AI impact 

Global AI Summit in Riyadh to host top-level discussions on AI impact 
  • The event, organized by the Saudi Data and AI Authority, will focus on one of today’s most pressing global issues — AI technology

RIYADH: Saudi Arabia will welcome economic policymakers, major technology and artificial intelligence companies, international thought leaders, and heads of international organizations to Riyadh this September as the Global AI Summit returns for its third edition.

The event, organized by the Saudi Data and AI Authority, will focus on one of today’s most pressing global issues — AI technology — and will attempt to find solutions that “maximize the potential of these transformative technologies for the benefit of humanity,” a statement released Sunday said.

The third edition of the event will be held at the King Abdulaziz International Conference Center from Sept. 10 to 12 under the patronage of Saudi Crown Prince Mohammed bin Salman in his capacity as chairman of the board of directors at SDAIA, the statement added.

The GAIN Summit will take place amid increasing concerns about the impact of AI technologies and will reaffirm the Kingdom’s commitment to supporting international efforts aimed at enhancing human welfare in the face of the challenges associated with developing technology.

GAIN 2024 will focus more on AI than its previous editions in 2020 and 2022, with topics including innovation in the sector, key developments shaping a better future for AI, and fostering a supportive environment for human resources in the field.

Other topics include AI at local and global levels, the complementary relationship between humans and AI, business leaders in AI, the relationship between data and applications, GenAI, AI ethics, AI processors and infrastructure, and AI and smart cities.


Saudi industry minister to visit Brazil, Chile to explore lithium production

Saudi industry minister to visit Brazil, Chile to explore lithium production
Updated 21 July 2024
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Saudi industry minister to visit Brazil, Chile to explore lithium production

Saudi industry minister to visit Brazil, Chile to explore lithium production
  • Alkhorayaf will land in Brazil on Monday and leave for Chile, the world’s second-largest producer of lithium, next Sunday

RIYADH: Bandar Alkhorayaf, Saudi Arabia’s mining and industry minister, will visit Brazil and Chile this week, the ministry said on Sunday.

In Brazil, he will hold meetings with officials to discuss expanding the Kingdom’s mining capacity, food processing, and aviation, while in Chile he will explore lithium production, needed for electric vehicle batteries.

“This aligns with the Kingdom’s direction towards expanding the production of EVs,” a Saudi government statement said. 

Alkhorayaf will land in Brazil on Monday and leave for Chile, the world’s second-largest producer of lithium, next Sunday.

On the first leg of the tour in Brazil, Alkhorayaf will meet agricultural and industrial groups, including Minerva Foods, JBS, and BRF SA, as well as the Brazilian Mining Association and mining company Vale.

Brazil’s Energy Minister Alexandre Silveira said last month that Saudi Arabia’s Public Investment Fund plans to invest $15 billion in Brazil in areas such as green hydrogen, infrastructure, and renewable energy.

In Chile, the minister will meet his counterpart Aurora Williams, as well as mining companies Antofagasta, and Codelco, a state-run company tasked with bringing the Chilean government into the lithium industry.

Saudi Arabia’s sovereign wealth fund, the PIF, and the Kingdom’s mining company, known as Ma’aden, which is 67 percent owned by the PIF, formed a joint venture called Manara Minerals to invest in mining assets abroad.


Closing Bell: Saudi main index closes in green at 12,195  

Closing Bell: Saudi main index closes in green at 12,195  
Updated 21 July 2024
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Closing Bell: Saudi main index closes in green at 12,195  

Closing Bell: Saudi main index closes in green at 12,195  

RIYADH: Saudi Arabia’s Tadawul All Share Index rose on Sunday, gaining 6.73 points, or 0.06 percent, to close at 12,195.05.   

The total trading turnover of the benchmark index was SR6.12 billion ($1.63 billion), as 74 of the listed stocks advanced, while 154 retreated.   

The MSCI Tadawul Index also closed in green, gaining 2.46 points, or 0.16 percent, to close at 1,529.46.   

The Kingdom’s parallel market Nomu rose 67.8 points, or 0.26 percent, to close at 25,770.14. This comes as 27 of the listed stocks advanced while as many as 34 retreated.   

The best-performing stock of the day was Saudi Manpower Solutions Co., whose share price surged 9.88 percent to SR10.34. 

Other top performers include Maharah Human Resources Co. as well as Al-Baha Investment and Development Co., whose share prices soared by 8.35 percent and 8.33 percent, to stand at SR6.88 and SR0.13, respectively.   

The worst performer was Electrical Industries Co., whose share price dropped by 5.51 percent to SR6.00.    

Other notable declines included Alinma Hospitality REIT Fund and The Mediterranean and Gulf Insurance and Reinsurance Co., with share prices falling 3.38 percent to SR8.29 and 3.25 percent to SR29.80, respectively. 

On the announcement front, Saudi Tadawul Holding Co. reported a profit increase to SR146 million for the second quarter of 2024, reflecting a 55 percent rise from SR105.2 million in the same period last year.  

The company attributed this growth to a 50.3 percent increase in operating revenues, which reached SR741.1 million in the first half of 2024, up from SR493.0 million in the corresponding period of the previous year. 

According to a release on the bourse, Saudi Arabian Amiantit Co. reported a net profit of SR5.11 million for the second quarter of 2024, reversing a net loss of SR10.08 million from the same quarter last year, marking a 150.7 percent improvement.  

This positive shift was attributed to a 17.4 percent increase in revenue due to expanded sales and a higher volume of new orders. 

Kingdom Holding Co., Sumou Holding Co., and Jeddah Economic Co. have signed an agreement to establish a new SR6.8 billion fund to acquire the Alinma Jeddah Economic Fund, currently fully owned by Jeddah Economic Co. Kingdom Holding Co. will hold a 40 percent stake in the new fund. 


Saudi Arabia’s US treasury bond possession increases 22.46% year-on-year to $136.3bn

Saudi Arabia’s US treasury bond possession increases 22.46% year-on-year to $136.3bn
Updated 21 July 2024
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Saudi Arabia’s US treasury bond possession increases 22.46% year-on-year to $136.3bn

Saudi Arabia’s US treasury bond possession increases 22.46% year-on-year to $136.3bn

RIYADH: Saudi Arabia’s possession of US treasury bonds increased to $136.3 billion in May, compared to $111.3 billion for the same month in 2023.

The figures mark a 22.46 percent year-on-year increase.

Data released by the US Treasury Department placed Saudi Arabia in 17th spot among the largest investors in such financial instruments in May.

The report revealed that the Kingdom held bonds valued at $135.4 billion in April, compared to $135.9 billion and $131.1 billion in March and February, respectively.

The figures illustrate Saudi Arabia’s growing influence in international financial markets, highlighting a keen understanding of leveraging sovereign wealth to secure and strengthen the Kingdom’s global economic position.

Moreover, Saudi Arabia is the only Arab and Middle Eastern country among the top 20 major holders of US Treasury securities.

A report published in January by the Saudi Central Bank, also known as SAMA, revealed that its investments in foreign securities stood at $1 trillion at the end of December 2023.

SAMA also has $361.75 billion as deposits with banks abroad, the report added.

The data analysis also revealed that Japan emerged as the largest investor in US bonds in May, with holdings totaling $1.128 trillion. China and the UK followed, with portfolios valued at $768.3 billion and $723.4 billion, respectively. 

Luxembourg claimed the fourth spot with assets valued at $385.4 billion, while Canada and the Cayman Islands secured the fifth and sixth positions with treasury portfolios worth $354.5 billion and $336.5 billion, respectively. 

Ireland attained seventh spot with treasury reserves worth $317.7 billion, followed by Belgium and Switzerland, with assets amounting to $313 billion and $290.4 billion, respectively.

France held the 10th position with treasury assets amounting to $283 billion, while Taiwan and India occupied 11th and 12th places with portfolios worth $263.3 billion and $237.8 billion, respectively.

The data collected is primarily from US-based custodians and broker-dealers. Since American securities held in overseas accounts may not be attributed to the actual owners, the department said, the data may not provide a precise accounting of individual country ownership of treasury securities.


Saudi capital market systems prove resilient during global tech outage

Saudi capital market systems prove resilient during global tech outage
Updated 21 July 2024
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Saudi capital market systems prove resilient during global tech outage

Saudi capital market systems prove resilient during global tech outage

RIYADH: Saudi Arabia’s capital market systems proved resilient during the global technical outage on July 19, which disrupted flights, broadcasting services, and essential services worldwide. 

The Saudi Capital Market Authority stated that it promptly coordinated with market stakeholders to mitigate the effects of the interruption, ensuring that operations remained unaffected.  

According to the CMA, its systems were fully operational and prepared to support investors during the trading sessions on July 21.

The outage, triggered by a software update from cybersecurity firm CrowdStrike, caused widespread disruptions across various sectors. 

In response, the CMA directed listed companies on the Saudi capital market to disclose any significant developments related to the incident. The market regulator emphasized that its technical teams are monitoring systems around the clock to ensure ongoing stability and business continuity. 

The Saudi Exchange also reassured investors of its system’s reliability and readiness to provide continuous service. 

On July 20, Saudi Arabia’s National Cybersecurity Authority stated that the impact of the outage on the Kingdom was limited. The authority also noted that it has implemented exceptional measures to monitor threats and cyber risks and to respond to any incidents. 

The Saudi Central Bank confirmed that its payment and banking infrastructure remained unaffected by the outage, emphasizing its adherence to international cybersecurity and operational standards.  

The apex bank also highlighted its commitment to regularly updating precautionary measures to ensure effective business continuity and the resilience of its banking and payment systems. 

The Saudi Data and Artificial Intelligence Authority also stated that its systems and those it hosts in the Kingdom were not impacted by the global technical failure. 

“SDAIA confirms that its systems and the national systems hosted by it in the Kingdom are not affected by the technical failure that struck most countries of the world today,” it stated in a statement posted on X. 

The incident has sparked renewed discussions about the importance of cybersecurity and resilience in critical infrastructure, with many organizations reassessing their strategies and safeguards to prevent future disruptions.

The Kingdom’s Vision 2030 underscores a robust commitment to advancing cybersecurity, with strategic investments aimed at enhancing digital infrastructure and safeguarding national assets against emerging cyber threats.