Banking
From The Report: Saudi Arabia 2023
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Saudi Arabia’s banking sector is undergoing its first regulatory overhaul in over half a century. These changes, combined with regulatory sandboxes and support for financial technology (fintech) firms, mark a rapid transformation. Traditional banking methods face disruption as digital payments and smartphone banking surge, and the competitive landscape includes local and international institutions. The Saudi Central Bank, a well-respected regulator, has been working to support expansion in the sector, which has witnessed increased net profit and assets. Fintech inclusion in the 2023 draft banking law and the Open Banking Lab signal modernisation. While the prospect of unstable global inflation could present liquidity pressure, there are reasons for optimism in the Saudi banking sector.

This chapter contains interviews with Ayman Al Sayari, Governor, Saudi Central Bank; and Ibrahim Bin Hamad Al Rashi, CEO, Social Development Bank.

Articles from this Chapter

Overview

Digital modernisation: Efforts to digitally transform and modernise the sector, in line with the overarching goals of Vision 2030
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The sector is in the process of updating the Kingdom’s banking laws for the first time in over 50 years, with draft changes currently under public consultation. This, along with regulatory sandboxes and new support for financial technology (fintech) businesses, has added further momentum to a rapidly changing and burgeoning sector, which has seen ATMs and bank branches close as digital payments and smartphone banking have skyrocketed. Furthermore, Saudi Arabia has a highly competitive banking sector…

Interview

Firm footing: Ayman Al Sayari, Governor, Saudi Central Bank (SAMA), on the impact of interest rates and new policies on financial capabilities
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Interview:Ayman Al Sayari How are rising interest rates expected to impact domestic financial sector performance? AYMANAL SAYARI: Strong fundamentals, combined with the continued positive momentum provided by public spending, mean that we expect the interest rate increases to have a modest effect on the domestic economy. Recent statistics have underlined the strength of the banking sector. Credit to the private sector continued on a growth trajectory, recording an annual increase of 9.6%…

Analysis

Incentive for inclusion: Social banking plays a key role in improving financial inclusion via microfinance and non-financial services
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Financial inclusion is a pivotal concept in the evolving financial landscape. The term refers to the process of ensuring that vulnerable demographics gain access to financial services, as well as including the provision of timely and adequate credit at an affordable cost from mainstream institutions. A significant component of the financial inclusion paradigm is microfinance, which allows vulnerable segments to stabilise their income, save for future needs and navigate times of crisis. This is particularly…

Interview

Business strategy: Ibrahim Al Rashid, CEO, Social Development Bank (SDB), on boosting business growth and strengthening social lending
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Interview:Ibrahim Al Rashid How can small and medium-sized enterprises (SMEs) in non-oil sectors be supported further? IBRAHIMAL RASHID: The year 2023 has seen the Kingdom’s SMEs make significant progress. During the first quarter of 2023 there was a 6% rise in the number of SMEs, as well as a 2.9% expansion in the wages bill and a 3.4% increase in employment in the segment. SDB has contributed to this progress through its role in nurturing start-ups, and small and emerging enterprises.…

Analysis

Crypto rush: Decentralised finance could play an important role in the efforts of GCC countries to diversify their economies
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As GCC countries look to harness new forms of financial technology (fintech), expand their services and improve financial inclusion, governments are embracing decentralised finance (DeFi) and working to attract cryptocurrency companies. DeFi – peer-to-peer financial services with no central authority or intermediary involved in trading, lending and investing – is seen by GCC countries as an opportunity to diversify their economies and embrace Web3 technologies, such as blockchain, the internet…