RIYADH: Algorithmic trading accounts for a quarter of traded volumes in the Saudi capital market, a top official has revealed at the 24 Fintech conference in Riyadh.
Mohammed El-Kuwaiz, chairman of the Capital Market Authority, told the event that the practice is playing a significant role in the Kingdom’s financial markets.
Algorithmic trading, or algo trading, involves the use of computer algorithms to execute a large number of trading orders at high speeds. These formulas follow predefined instructions to generate profits at a rate and frequency unattainable by human traders.
“Today, around the world, algorithmic trading represents 60 to 70 percent of global trading volumes, especially in developed markets. Even though Saudi Arabia is new to algorithmic trading, it now accounts for about one-fourth of traded volumes in the Saudi capital market,” El-Kuwaiz said.
The CMA chairman noted that digital trading began in the 1970s, even before the Internet, and in Saudi Arabia, it was introduced in the early 1990s.
“Today, it represents over 90 percent of traded volumes,” he added.
This shift toward digital trading is part of Saudi Vision 2030, which aims to develop a robust infrastructure in the sector while encouraging innovation and fostering a competitive economy.
El-Kuwaiz also emphasized the substantial investment in information technology within the financial services industry. He added that the industry represents almost 15 percent of IT spending across the world, highlighting the importance of digitization in financial services.
Discussing the evolution of fintech in Saudi Arabia, El-Kuwaiz explained the transition from equity crowdfunding platforms to debt crowdfunding platforms. “When we first started with fintechs, the single biggest interest was in equity crowdfunding platforms, which created a massive operation. The migration we have seen over time was from equity crowdfunding platforms to debt crowdfunding platforms,” the chairman said.
The 24 Fintech conference, co-organized by Tahaluf — a joint venture between Informa PLC, the Saudi Federation for Cybersecurity, Programming and Drones, and the Events Investment Fund — along with key Saudi financial regulators, aims to position the Kingdom as a global fintech leader in alignment with Saudi Vision 2030.
The three-day event at the Riyadh Front Exhibition & Conference Center is expected to draw over 30,000 participants, 300 exhibitors, and more than 350 investors, aiming to become one of the world’s premier fintech conferences and highlighting Saudi Arabia’s rapid growth in the industry.
