Saudi fintech sector thriving as it balances regulatory challenges: top CEO

Saudi fintech sector thriving as it balances regulatory challenges: top CEO
Abdulmajeed Al-Sukhan, co-founder and CEO of Tamara, speaking at the 24 Fintech conference. AN
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Updated 01 October 2024
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Saudi fintech sector thriving as it balances regulatory challenges: top CEO

Saudi fintech sector thriving as it balances regulatory challenges: top CEO

RIYADH: Saudi Arabia’s fintech sector provides a strong foundation for startups to succeed alongside strict regulatory challenges, according to a top entrepreneur. 

Speaking at the “Rocket Growth – The Fintech Boom” panel during the 24 Fintech conference in Riyadh, Abdulmajeed Al-Sukhan, co-founder and CEO of Tamara, emphasized the importance of balancing rapid growth with regulatory compliance. 

Saudi Arabia aims to have 525 active fintech entities by 2030, underscoring the Kingdom’s commitment to driving innovation in the sector. 

Launched in April 2018 by the Saudi Central Bank and the Capital Market Authority, Fintech Saudi has been pivotal in transforming the Kingdom into a leading fintech hub.

“It’s essential to strike a balance between rapid growth and maintaining proper regulation and compliance. If you expand quickly without building a solid foundation, you may face significant issues down the line,” said the top official of the Saudi Arabia-based buy now, pay later startup.  

Al-Sukhan pointed out that there is a “very open market” in Saudi Arabia, where the regulator is creating an environment that fosters innovation. 

He added that it is still a controlled environment, which can be limiting. 

“That is natural, and I believe it is healthy, too. If we hadn’t had a sandbox and instead launched a buy now, pay later service unregulated for years, then suddenly faced regulation, it would have caused significant issues. We’d be in a much worse position today,” said Al-Sukhan. 

Discussing the impact of artificial intelligence on the fintech sector, the CEO described AI as the most significant development of our lifetime. 

“In my opinion, it is even bigger than the Internet or anything else. It is changing our perception of reality, so it is impacting business. But the more practical answer is that AI is a force of something that we have never seen in the coding industry and engineering in general,” he said. 

Al-Sukhan believes AI will revolutionize productivity and accelerate development in unprecedented ways.

“When building a company, shipping is the most critical part. Artificial intelligence is going to enable companies like ours to ship features fast, to make sure we are ahead, to know what is the latest, and to do a lot of the things that used to take us a lot of time, even in the research side,” he said. 

He added that AI’s capability to analyze vast amounts of data will help companies like Tamara deliver products that customers want, at the right time, in the right way, and at the right place. 

“Indeed, we are on the brink of something very significant with AI,” Al-Sukhan said.


Interest rate cuts and Vision 2030 progress discussed by Council of Economic and Development Affairs

Interest rate cuts and Vision 2030 progress discussed by Council of Economic and Development Affairs
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Interest rate cuts and Vision 2030 progress discussed by Council of Economic and Development Affairs

Interest rate cuts and Vision 2030 progress discussed by Council of Economic and Development Affairs

RIYADH: Interest rate cuts and their impact on the global and Saudi economies were a central focus of discussions during a virtual meeting of the Council of Economic and Development Affairs. 

A report from the Ministry of Economy and Planning on the international economic outlook for September highlighted how reductions in interest rates have affected major and emerging economies, with specific implications for the Kingdom, as reported by the Saudi Press Agency.

The council also reviewed the quarterly Vision 2030 performance report, presented by the Strategic Management Office, which outlined significant accomplishments in the three pillars of the undertaking: a vibrant society, a thriving economy, and an ambitious nation. The study showcased the continued progress made during the second quarter of this year.

Additionally, the National Center for Performance Management, also known as Adaa, presented its findings on public sector performance, focusing on efforts to support government agencies in meeting their targets.

Strategies for improving future performance and enhancing government effectiveness were also discussed.

Additional reports reviewed by the council included an analysis of consumer and wholesale price indices for July and a summary of Saudi Arabia’s trade performance for June.

“The council made decisions and recommendations based on these insights, furthering the Kingdom’s commitment to economic growth and development,” according to SPA.

Key indicators of progress toward Vision 2030 include a drop in the Saudi nationals’ unemployment rate to 7.1 percent in the second quarter of 2024, the lowest in the country’s history, nearing the 7 percent Vision 2030 target. 

Foreign direct investment inflows reached approximately SR19.4 billion ($5.1 billion) in the three months to the end of June, with a net inflow of SR11.7 billion, marking a 23.4 percent increase from the first quarter.

Non-oil exports also grew significantly, rising by 19 percent in July compared to the same period in 2023, reflecting Saudi Arabia’s efforts to diversify its economy. 

The Ministry of Justice exceeded its e-services target, reaching 108 percent in the second quarter of 2023, while public sector performance in achieving Vision 2030 goals hit 83 percent.

Eight years since its launch, the social reform and economic diversification blueprint is quickly fulfilling its promise, with 87 percent of its 1,064 initiatives deemed completed or on track.

By the end of 2023, some 197 of Vision 2030’s 243 key performance indicators had been fully achieved. Of those, 176 exceeded their targets. 

A similar trend is evident across various socio-economic domains, prompting the nation to reconsider and set higher ambitions and targets for 2030. 


RSG, Marriott partner to bring Ritz-Carlton to wellness destination AMAALA

RSG, Marriott partner to bring Ritz-Carlton to wellness destination AMAALA
Updated 12 min 55 sec ago
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RSG, Marriott partner to bring Ritz-Carlton to wellness destination AMAALA

RSG, Marriott partner to bring Ritz-Carlton to wellness destination AMAALA

DUBAI: A new wellness-focused Ritz-Carlton destination is set to open in Saudi Arabia as Red Sea Global inked a strategic agreement with Marriott International.     

The new destination will be part of the luxury wellness spot AMAALA development and marks the fourth collaboration between the two organizations.     

Scheduled to open in 2025, the Ritz-Carlton will be situated at the northernmost point of Triple Bay, a key area within the AMAALA project.     

The new property will feature 391 guestrooms, with 80 percent of these offering water-facing views, alongside a mix of Marina Village, sea, and mountain views.     

In an interview with Arab News during the Future Hospitality Summit in Dubai, Lindsay Madden-Nadeau, senior director of wellness strategy at Red Sea Global, emphasized the importance of collaboration in shaping the wellness portfolio of the AMAALA project.     

“We’re constantly looking at different brands and experiences that will help enhance and leverage our already existing wellness portfolio,” Madden-Nadeau said. “I think the power of collaboration goes a long way these days,” she added.     

The new destination's design, created by Foster + Partners, seeks to blend in with the natural sand dune landscape, which has been preserved to offer shaded areas. The resort is designed to provide various views of the sea from multiple locations.   

The announcement builds on recent partnership successes, including the opening of the St. Regis Red Sea Resort and Nujuma, a Ritz-Carlton Reserve, as well as the signing of The Red Sea EDITION.     

The new resort’s architecture will reflect the local design influences of Al Wajh, a nearby seaside town, and will incorporate elements of traditional craftsmanship, blending them with contemporary features.     

Madden-Nadeau highlighted the unique position of AMAALA as a destination and how each operator brings a distinctive advantage to the location.     

The new Ritz-Carlton will include a range of leisure and wellness amenities, such as multiple culinary venues, including sunset-facing restaurants, a spa, fitness and recreational centers, adult and family pools, and a rock pool.   

The property will offer expansive event facilities, including a ballroom and meeting spaces capable of accommodating up to 1,500 guests, suitable for weddings, conferences, and corporate events.     

The AMAALA project is focused on delivering a wellness and luxury tourism experience, with the first phase of the Triple Bay masterplan set to welcome its guests in 2025.     

This initial phase will include eight resorts with over 1,400 hotel keys. Once complete, AMAALA will encompass more than 4,000 hotel rooms across 30 hotels, in addition to approximately 1,200 luxury residential units, including villas, apartments, and estate homes, alongside retail, dining, and recreational facilities.     

Madden-Nadeau also spoke about the upcoming additions to their wellness offerings. “In general, over the next six months, we hope to be able to announce three additional brands. Two of them will be dedicated wellness operators that really complement the already existing assets and operators that are there,” she said.     

“We’re also looking at developing our own wellness brand, and we’re in exploratory phases of that right now. And we have another asset that we’re working on, something that’s new to the market, something that’s a bit disruptive, and so we’re exploring that as well,” she added.


Saudi Arabia’s assets under management to reach $300bn in next 2 years: Fitch Ratings 

Saudi Arabia’s assets under management to reach $300bn in next 2 years: Fitch Ratings 
Updated 28 min 58 sec ago
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Saudi Arabia’s assets under management to reach $300bn in next 2 years: Fitch Ratings 

Saudi Arabia’s assets under management to reach $300bn in next 2 years: Fitch Ratings 

RIYADH: Saudi Arabia’s assets under management are expected to reach $300 billion within the next two years, driven by regulatory reforms and expanding equity and debt capital markets, according to Fitch Ratings. 

In its latest report, the credit rating agency stated that AUM in the Kingdom’s asset management industry grew by 13.5 percent year on year by the end of the first half of 2024, surpassing $250 billion. 

The growth of the asset management industry, or AMI, in the second half of this year and in 2025 will be fueled by an increasing number of high-net-worth individuals seeking these services in Saudi Arabia. 

The Kingdom has the largest AMI in the Gulf Cooperation Council region and ranks fifth among countries in the Organization of Islamic Cooperation. Fitch further noted that Saudi Arabia is the second-largest public Islamic funds market globally. 

Bashar Al-Natoor, global head of Islamic Finance at Fitch Ratings, said: “We expect Saudi Arabian AUM to cross $300 billion within a couple of years, driven by Vision 2030’s Financial Sector Development Program. There is strong demand for Islamic products, with around 95 percent of mutual funds being shariah-compliant.”  

He added: “The industry’s AUM reached 22 percent of gross domestic product in 2023, with private funds three times larger than public funds. Saudi bank-affiliated managers held 63 percent of industry revenues, but competition from international managers is rising as the government attracts them to Saudi Arabia.” 

According to the report, the net income of all capital market institutions increased by 29 percent year on year to $1.1 billion in the first half of 2024. 

Fitch also noted that private funds’ AUM has doubled since 2020, with 43 percent allocated to equities and 40.5 percent to the real estate sector. 

About 28 percent of public funds are invested in money markets, followed by equities at 25.6 percent, Real Estate Investment Trusts at 18.7 percent, and debt at 16 percent. 

The report concluded that rising initial public offerings and the improving performance of the Tadawul All Share Index are attracting equity funds to the Kingdom. 

In April, Abdullah bin Ghannam, deputy for listed companies and investment products at Saudi Arabia’s Capital Market Authority, highlighted the significant growth in the AMI. 

He noted that asset management activity revenues for capital market institutions in Saudi Arabia reached $1.12 billion in 2023, reflecting a 58.6 percent increase over the past four years. 


Arab countries urged to adopt decisive policies amid economic challenges

Arab countries urged to adopt decisive policies amid economic challenges
Updated 46 min 34 sec ago
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Arab countries urged to adopt decisive policies amid economic challenges

Arab countries urged to adopt decisive policies amid economic challenges

RIYADH: The global economy presents promising growth opportunities, but emerging challenges could disrupt predictability, complicating the landscape for investors and policymakers, according to the Saudi Central Bank governor. 

Addressing the opening session of the 48th Council of Governors of Arab Central Banks and Monetary Authorities in Cairo, Ayman Al-Sayari emphasized the need for collaborative efforts to navigate ongoing economic turbulence. 

He acknowledged the crucial role central banks play in managing monetary policies amid shifting global dynamics, particularly regarding inflation, debt management, and evolving financial technologies.  

“The recent interest rate cuts by several central banks signal the start of a monetary easing cycle. This is expected to gradually reduce borrowing costs and public debt risks, while also stimulating investment and enhancing economic activity,” he said in his address. 

He noted that recent years have seen the Saudi economy experience accelerating growth, driven by significant transformation and economic diversification efforts. 

“In this context, Saudi Arabia continues to uphold a balanced and robust economy that can absorb external shocks, even as many economies worldwide are affected by external factors and geopolitical tensions,” added Al-Sayari. 

These issues were further emphasized by Fahad Al-Turki, director general and chairman of the board of directors of the Arab Monetary Fund, who noted that the region’s unemployment rate was alarmingly high at 10.9 percent by the end of last year — double the global average, according to World Bank figures. 

He underscored the importance of adopting policies that would address this issue and meet the economic aspirations of the region’s populations. 

He also pointed out that rising debt levels remain a significant concern for Arab economies in light of current global conditions, emphasizing the need for effective debt management to ensure sustainable financial health. 

Despite these challenges, Al-Turki expressed optimism for the future, citing AMF projections that predict an improvement in the region's economic growth rate. 

The Arab economies are expected to grow by 2.8 percent this year, with a forecasted rise to 4.5 percent in 2024, compared to a modest 0.3 percent growth last year. 

Inflation, which remains a concern, is also expected to decrease over the next two years. The AMF anticipates inflation across Arab countries to drop from 13.2 percent last year to around 11 percent in 2023, and further to 7.8 percent in 2024. 

However, these projections exclude certain Arab nations experiencing extraordinary inflation due to internal challenges. 

Al-Turki noted that financial safety indicators in the Arab region show an average capital adequacy ratio of 17.4 percent by the end of last year — well above the Basel III requirements. 

Additionally, liquid assets made up 34 percent of total assets in the sector, while loan provisions covered over 90 percent of non-performing loans in Arab banks. 

On the technology front, he pointed out that opportunities presented by artificial intelligence offer significant potential for Arab countries but stressed the need for robust regulations and risk management frameworks to fully harness its benefits. 

He called for enhanced economic resilience across Arab nations to better withstand potential global shocks.


Karl Lagerfeld label eyes branded residence expansion in UAE, globally

Karl Lagerfeld label eyes branded residence expansion in UAE, globally
Updated 01 October 2024
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Karl Lagerfeld label eyes branded residence expansion in UAE, globally

Karl Lagerfeld label eyes branded residence expansion in UAE, globally

DUBAI: German fashion brand Karl Lagerfeld is eyeing branded residence expansion in the UAE and globally, according to the firm’s CEO and president.

Speaking to Arab News on the sidelines of the second day of the Future Hospitality Summit taking place in Madinat Jumeirah from Sept. 30 to Oct. 2, Pier Paolo Righi explained that the firm is currently developing 51 villas in Dubai and is planning to expand further from there.

A branded residence is a luxury property that is affiliated with a well-known label, often in the hospitality, lifestyle, or luxury sectors. These properties typically offer high-end living spaces combined with the services and amenities associated with the brand, such as concierge services, fitness centers, or spa facilities.

This falls in line with Karl Lagerfeld’s goal of expanding the brand into the hospitality sector, thereby reflecting the firm’s greater vision to broaden the label’s comprehensive lifestyle experience.

It also aligns well with the UAE Tourism Strategy to boost the sector’s contribution to gross domestic product by 450 billion dirhams ($122 billion), attract investments worth 100 billion dirhams, and welcome 40 million hotel guests annually by 2031.

“We’re currently together with Taraf developing about 51 beautiful villas here in Dubai, and I think the next logical move is Ras Al-Khaimah or Abu Dhabi,” Righi said.

“So, we’re looking into opportunities in these areas as well. It’s not concrete yet, but we very much believe in the region and will develop that further,” he added.

The CEO said that the firm is also eyeing expansion of its branded residence beyond the UAE.

“We have different plans. We have plans in Malaysia. We have plans in Asia particularly. Also in Europe — plans are concrete in Lisbon in Portugal and we’re looking into other areas as well in Southeast Asia,” Righi said.

Regarding expanding a physical presence in Saudi Arabia in particular, the CEO said: “We already have a good partnership there with the Chalhoub Group; we’ve been working with them for many years. Also, we have a store in Riyadh, which we just recently refurbished. But, I see, of course, much more potential going forward and also see more store openings.”

Recognizing the brand’s history while discussing its current direction, the president emphasized that Saudi Arabia has an impressive vibrancy that the company aims to engage with, growing beyond fashion to include residential and hospitality sectors.

Righi said: “The developments in Saudi with the NEOM project and The Line are, of course, very much forward-thinking. They are visionary and also very much intriguing for us as a brand that’s always looking at what’s at the forefront, what’s out there, which was always the vision of Karl — to embrace the present and invent the future.”

The CEO highlighted that the entity does not consider itself exclusively a fashion house, underlining that designer Karl Lagerfeld was inspired by his diverse interests, including music, architecture, literature, and culture.

“For us, the most important is to bring all these areas of interest together into one, one world and that is what we’re trying to do. And, I think the most important thing here is that the dynamic works between the culture, what you find there, basically together with the brand DNA and the consumer that has always been Karl’s thinking is like: if it works for me as a designer only, it does not work,” Righi said.

“It has to work for the people that live there, that want to live there, and it has to relate back to the culture of the country and to the to the place, to the habitat – and that is what we’re bringing together,” he added. 

Righi further emphasized that luxury and fashion houses provide not only clothing but broader experiences of indulgence that can be in hospitality, entertainment, or the residential sector.

This year’s Future Hospitality Summit 2024 marked the largest edition to date, bringing together 1,500 industry leaders and featuring more than 110 distinguished speakers, facilitating engaging discussions and networking opportunities. 

The three-day event served as a platform for industry leaders to connect, share ideas, and shape the future of hospitality and tourism.