Interview: Ibrahim bin Hamad Al Rashid, CEO, SME Bank, on small business growth, mergers, risk management and digital finance
What does the Open Banking framework offer small and medium-sized enterprises (SMEs)?
IBRAHIM BIN HAMAD AL RASHID: Open Banking offers SMEs a significant step forwards in transparency, access and informed decision-making. By enabling secure data sharing, it provides a real-time view of cash flows and financial health, empowering SMEs with personalised cash management tools that aggregate multiple accounts into a single, holistic picture. The framework is accelerating lending marketplaces and embedded finance, allowing SMEs to access a broader range of products seamlessly within platforms they already use. At the outset of the artificial intelligence (AI) era, this data-driven environment is enabling smarter credit decisions, improving financing efficiency. Ecosystem maturity remains the key gap. While progress is strong, consistent data standards, universal application programming interface (API) adoption and fully harmonised cybersecurity protocols are still evolving. The Personal Data Protection Law is a critical foundation, and continued advancement in technical and security standards will be essential to unlock the full potential of Open Banking for SMEs.
In what ways can banks lower SME financing costs and control cybersecurity and data-sharing risks?
AL RASHID: Banks can significantly lower SME financing costs by shifting from siloed lending models to collaborative, ecosystem-based approaches. Strategic collaboration between banks and specialised financial technology (fintech) institutions – particularly those focused on invoice financing and supplier payments – enables structural cost reduction and not just incremental efficiency. Fintech platforms automate invoice verification, payment cycles and reconciliation processes for SMEs, eliminating manual friction, reducing operational overhead and accelerating access to liquidity. This allows SMEs to benefit from faster financing, more competitive pricing and scaleable bill-discounting solutions built on trusted digital infrastructure.
However, cost efficiency must go hand in hand with robust risk governance. Managing cybersecurity and data-sharing risks requires a multi-layered, institutional-grade framework. Fintech partners must comply with stringent national cybersecurity and data-governance standards, including those set by the Saudi Data and AI Authority, and DAMA Saudi, a data management association. Banks reinforce this through rigorous due diligence and clear accountability frameworks. Secure, encrypted APIs and strict access controls ensure data integrity and resilience across platforms.
Strategically, many institutions are adopting co-lending and risk-sharing models, where banks provide balance-sheet strength while fintech contributes realtime, data-driven credit assessments. This model not only optimises capital deployment, but also enhances credit accuracy, reducing risk while improving affordability. Ultimately, this approach reflects a leadership mindset in leveraging innovation without compromising trust, aligning financial inclusion with national data sovereignty and building SME financing models that are efficient, secure and sustainable at scale.
To what extent does the expanding SME base necessitate differentiated products?
AL RASHID: As Saudi Arabia’s SME base surpasses 1.7m enterprises, a one-size-fits-all model is no longer viable. Differences in size, sector and geography now require highly differentiated financial products. Micro-enterprises prioritise simplicity and speed, such as point of-sale financing, revolving credit cards and digital working-capital solutions with lighter collateral requirements. More established SMEs, on the other hand, need more sophisticated instruments, including project finance and long-term capital expenditure facilities. Sector and regional dynamics further reinforce this need. Tourism and hospitality benefit from financing aligned with seasonal cash flows, while fintechs often require venture debt or asset-based solutions.
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