Financial technology (FinTech) applications have made a revolutionary change in financial services and transactions.
According to Asharq Al-Awsat, these technology apps have gained popularity among younger generations, who heavily rely on technology and digital applications in their daily lives. As a result, the FinTech sector is experiencing a rapid growth and innovations to meet the increasing demand.
FinTech and Gen Z
Generation Z refers to those who were born in the period between the mid-1990s and the early 2010s. Gen Z was born in the age of internet and modern technology. Hence, digital applications have become an essential component of their daily lives.
In the meantime, FinTech applications offer a wide range of services that aim to facilitate and streamline financial transactions. These apps accelerate transactions via services such as borrowing money, investing, transferring funds, paying bills, and sending gifts.
FinTech Saudi
Recognizing the rising demand on the digital services, the Saudi Central Bank (SAMA), in partnership with the Capital Market Authority, launched the FinTech Saudi in 2018.
The goal of this initiative is to advance the FinTech industry in Saudi Arabia and transform the Kingdom into an innovative FinTech hub with a responsible ecosystem.
To achieve this, FinTech Saudi supports infrastructure development, builds capabilities and talents needed by FinTech companies, and encourages FinTech entrepreneurs. FinTech Saudi is providing services for FinTech companies in several key areas of focus, including banking services, finance, insurance, and payments.
Intelligent Cash Management
Under FinTech Saudi, companies now offer fast and simple financing solutions. Loans are no longer restricted to major purchases; anyone can easily get loans for a range of purchases, including clothes, airline tickets, and consumer goods.
Buy Now, Pay Later
The Buy Now, Pay Later (BNPL) services are gaining momentum in the e-commerce sector. By using these services, consumers can make immediate purchases and pay in installments, with minimal or no interests. This enhances purchasing power as it encourages consumers to buy.
According to Fortune Business Insights, the value of the global BNPL market was estimated at $30.38bn in 2023. It is expected to grow to $167.58bn by 2032, driven by a compound annual growth rate of 20.7%.
Digital Banks
Digital banking has become common in Saudi Arabia. Customers can get all the traditional banking services in a faster and more cost-effective way through FinTech companies that are specialized in digital banking.
Facilitating Investment
FinTech companies offer solutions that facilitate investment for individuals and companies. People can invest small amounts of money in private companies in exchange for equities. They can also buy securities and stocks. These innovative solutions allow faster transactions and streamlined processes for beginners.
Risk Management
Financial institutions can address various risks and threats, such as fraud detection and credit risk management, by identifying potential fraud. FinTech companies provide tools that strengthen regulatory oversight, by helping regulators in monitoring the companies they supervise.
Business Solutions
FinTech companies provide a wide range of business solutions that enable businesses to operate more easily and efficiently. These include enhancing operational processes, reducing costs, improving cybersecurity, and enhancing data management.
Payments
Digital wallets are one of the revolutionary services provided by FinTech apps. Users can use these wallets to save money, pay bills, or exchange currencies without going to the bank.
24 FinTech Conference
Saudi Arabia will host the first edition of the “24 FinTech Conference” in Riyadh, from September 3-5, 2024. This flagship international event provides a platform for government officials, world leaders and international companies to discuss the main topics related to the FinTech industry.
Furthermore, it aims to showcase the transformation journey of this promising sector in Saudi Arabia, establishing the Kingdom’s position as a leader in the FinTech sector, in the light of its adoption of financial technology.
