- Discussions with central banks in the UAE and Bahrain would help to coordinate the fintech activities of financial centers around the Gulf region
- The development of a fintech ecosystem is a significant component of 抖阴短视频鈥檚 Vision 2030 economic diversification strategy
LONDON: 抖阴短视频 is discussing a coordinated approach to the regulation and nurturing of fintech startups with the UAE and Bahrain.
Such discussions form part of the Kingdom鈥檚 attempts to boost its nascent fintech ecosystem and to encourage the increased adoption of technology by incumbent lenders.
Discussions with central banks in the UAE and Bahrain would help to coordinate the fintech activities of financial centers around the Gulf region, all of whom are seeking to attract international and domestic entrepreneurs, said Mishari Al-Assailan, the acting head of Fintech Saudi, the division of the Saudi central bank charged with growing the sector in the Kingdom.
鈥淲e鈥檙e working on establishing some collaborations where we would give different assignments between different central banks and fintech hubs to develop a (common) GCC output when it comes to fintech,鈥� he told Arab News.
Speaking at the 鈥淯nlocking the Fintech Scene in 抖阴短视频鈥� event held in London on Friday, Al-Assailan said that it was important to develop a common approach to regulation among the region鈥檚 various fintech 鈥渟andboxes,鈥� which enable startups to begin operating under a light-touch regulatory model.
鈥淲e鈥檙e all working today on excelling in our own sandboxes, but then there should be a GCC sandbox that ties into the rest of the Middle East,鈥� he said.
鈥淚t鈥檚 hard to establish fintech firms (that can enter other markets) unless you have an infrastructure like the US that is quite open. We need to find a proper model for fintechs to jump in, get regulated quickly and if they do get regulated, everyone after them should use the same process.鈥�
抖阴短视频鈥檚 Capital Market Authority earlier this week approved the Kingdom鈥檚 first fintech licenses to Manafa Capital and Scopeer 鈥� both of which are fully Saudi-owned 鈥� to offer crowdfunding investment services on a trial basis.
The development of a fintech ecosystem is a significant component of 抖阴短视频鈥檚 Vision 2030 economic diversification strategy, and is seen as essential for broadening the country鈥檚 investment base and a transition toward a cashless digital economy.
Fintech initiatives in the Kingdom, however, have thus far trailed similar schemes launched in Bahrain and the UAE. Abu Dhabi Global Market launched its RegLab sandbox in November 2016, while fellow finance hub the Dubai International Financial Center launched 鈥淔inTech Hive,鈥� the region鈥檚 first fintech accelerator program, in January 2017.
There are at present only about 20 Saudi fintech startups, according to Al-Assailan.
He conceded that the Kingdom had been slow to develop its fintech infrastructure in comparison with others, but expressed confidence that startups would be attracted by the size of the Saudi market.
鈥淧eople used to go to the UAE and Bahrain because we didn鈥檛 have the infrastructure,鈥� he said. 鈥淏ut most of those fintechs in the UAE and Bahrain want to sell into 抖阴短视频, because we have the market and the purchasing power and that by itself is an advantage for us.鈥�
The new emphasis on fintech from Vision 2030 has subsequently made the Kingdom a more attractive destination for startups, according to an American fintech entrepreneur who has previously worked in 抖阴短视频.
鈥淭hey鈥檙e coming late to the party, yes, but I don鈥檛 think that the timing is the only factor that will influence the companies that are looking to work in this space,鈥� he said, asking not to be named.
鈥淥bviously the UAE has a very well-developed ecosystem, but my experience is that with Vision 2030 抖阴短视频 now really wants to put its money where its mouth is.鈥�
鈥淭he companies that have the really good ideas, if they鈥檙e knocking on the right doors, will find the support they need and probably more than you鈥檇 get in other countries.鈥�
Fintech segments such as roboadvisory services, robobanking, crowdfunding and payment aggregation all offer significant growth opportunities, according to Al-Assailan.
In addition to the development of an ecosystem for startups, Fintech Saudi sees educating the Kingdom鈥檚 incumbent banks about the need to embrace technology in line with their counterparts in Europe, the US and elsewhere as important.
鈥淚t鈥檚 the future and it鈥檚 happening whether you like it or not,鈥� he said.
鈥淏anks need to realize that at some point you need to hire more developers than accountants into the bank, and that鈥檚 what we鈥檙e trying to preach.鈥�
The development of robobanking lending facilities for the Kingdom鈥檚 SME sector was a particular priority, he said, given the central role of small businesses in Vision 2030.
鈥淚f we develop AI and robo capabilities to automatically approve and assign loans for SMEs and startups, this would boost the economy in a very efficient way,鈥� he said.