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.
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.
