Saudi digital banking market to exceed $20 bln by 2024: report

Saudi Arabia’s digital banking market is projected to cross $20 billion by 2024, growing at a CAGR of more than 4 percent during the forecast period, according to a report by Global Market Insights, Inc. a US-based market research company.

The sector’s size was over $15 billion in 2017, and is driven by the rapid adoption of online and mobile banking platforms, the report added.

As internet and smartphone penetration across the Kingdom increase, banking institutions are shifting toward digital channels to deliver their services.

Global banking institutions are also collaborating with fintech companies to develop more customer-centric products and provide a better customer experience.

Also Read: Saudi Arabia tops digital banking market in MENA: report

“Over the past five years, fintech has emerged as the most lucrative sector and the venture capitalists are investing billions in the sector to make profits. In 2017, approximately $16.5 billion investment was witnessed in the fintech companies, increasing from $3.7 billion in 2013,” the report said.  

Banks are looking to boost their investments in technology as they acknowledge the rise of fintech players.

While noting that Saudi Arabia’s fintech sector is still in the nascent stage, the report added the sector holds huge potential for growth during the forecast timeline (2017-2024).

“The country’s government is focusing on the fintech sector to move away from the traditional oil-based economy. In 2018, the government issued its first Fintech license that granted permission to Manafa Capital and Scopeer to offer crowdfunding investment services on a trial basis.”

Also See: SAMA launches Fintech Saudi initiative

The Saudi Arabian Monetary Agency (SAMA) launched its FintechSaudi initiative in 2018 to drive the adoption of digital technologies among financial institutes. The government also launched the Saudi Vision 2030 Program, under which, the government plans to invest significantly in financial technology and innovations to propel economic growth.

SAMA also formed an alliance with Ripple, a Blockchain technology provider, to integrate Ripples’s, xCurrent, platform in Saudi’s Banks for instant payments.