BAKU, Azerbaijan, January 4. Saudi-based fintechs are reshaping the traditional banking system in the Kingdom by going fully digital and prioritizing convenience, TurkicWorld reports via Arab News.
The country has already achieved a major milestone in its financial transformation, reaching a 79 percent cashless transaction rate in 2024, surpassing its 2025 target ahead of schedule.
The fintech landscape in Saudi Arabia is growing rapidly, driven by regulatory reforms, digital innovation, and financial infrastructure investment.
With Vision 2030 progressing steadily, the Kingdom is leveraging its young, digitally connected population and advanced regulatory framework to fast-track its evolution into a cashless economy.
Speaking to Arab News, Nauman Hassan, regional director for the Middle East and North Africa at processing platform Paymentology, said that Saudi fintechs are dismantling the old banking blueprint and rebuilding it around how people actually live and transact.
“Whether it’s everyday spending, access to credit, SME tools, or the unique financial needs of millions of pilgrims, they’re creating specialized, digital-first experiences that traditional models were never designed to support. With strong Vision 2030 backing and a funding surge, over 260 fintechs are already reshaping the competitive landscape,” said Hassan.
The Paymentology official added that consumers in Saudi Arabia are now going through a financial system where digital wallets and electronic payments dominate their transactions.
Nicholas Wright, head of institutional sales at Saxo Bank, echoed similar views and said that the fintech transformation in the Kingdom is driven by instant payments and open banking application programming interfaces, which connect banks and fintech startups to deliver seamless, real-time financial services.
“Consumers now have access to innovative products like buy now, pay later, digital wallets, and investment tools that were previously limited to traditional banks. The result is faster, cheaper, and more accessible financial services,” said Wright.
Affirming the growth of BNPL platforms in Saudi Arabia, Tamara, the Kingdom’s first fintech unicorn which offers payment solutions to over 20 million customers, secured an asset-backed financing facility of up to $2.4 billion in a landmark deal in November during the Money 20/20 conference.
Professor of Finance, Director of Research for Global Real Estate, Georgetown University, McDonough School of Business, Francesco D’Acunto, said that Saudi regulators have been at the forefront of creating a supportive environment for fintech development, driven by early initiatives aligned with the Kingdom’s Vision 2030.
Key milestones include the creation of FinTech Saudi by the Saudi Central Bank and the Capital Market Authority in 2018, and SAMA’s Regulatory Sandbox Framework in 2019, which is one of the most advanced and structured frameworks for technological disruption among global regulators. “Fintechs in Saudi Arabia are among the most disruptive to traditional banking models globally, offering meaningful opportunities for consumers and advancing financial inclusion,” said D’Acunto.
He added: “With new entrants continuing to be licensed, the Saudi fintech ecosystem now includes more than 20 operators transforming consumer finance across digital payments, peer-to-peer lending, crowdfunding, and micro- and small-business lending and factoring.”
Promoting financial inclusion
Arjun Vir Singh, partner, head of financial services at Arthur D. Little Middle East, said that fintechs operating in the Kingdom will continue to play a more substantial role in promoting financial inclusion and serving the “underserved” across the Kingdom.
He also underscored that traditional banks in the Kingdom should learn from fintechs to provide seamless and comfortable experiences to their customers.
“The real disruption isn’t that banks are disappearing (far from that); it’s that financial services are becoming more embedded, intelligent, and programmable. Consumers must ask for more from their banks, and the banks don’t have any excuses not to continue meeting these evolving needs,” said Singh.
He added: “Fintechs are already playing an important role in what I like to call ‘Widening the Front Door’ which helps financially, including more of the populous — fintechs are not entirely replacing banks; they are extending the financial systems to reach people who were chronically underserved for several reasons.”
In October, a report by Principal Financial Group and the Center for Economics and Business Research revealed that Saudi Arabia retained its 30th position in the 2025 Global Financial Inclusion Index, with strong gains in digital finance and fintech ecosystems.
The analysis highlighted that the Kingdom recorded the world’s second-largest annual improvement in the financial system support pillar, climbing four spots to 35th with an increase of 1.8 points.
The report attributed the gains to regulatory reforms, a fast-expanding fintech base, and investment in financial infrastructure.
D’Acunto said that fintechs in Saudi Arabia play a pivotal role in promoting financial inclusion for consumers, particularly through digital payments and peer-to-peer lending.
“Digital payment platforms reduce the frictions associated with everyday transactions by lowering fees, increasing speed, and making payments accessible through mobile devices rather than traditional bank accounts,” said D’Acunto.
He added: “This accessibility is especially valuable for unbanked or underbanked consumers, who are left behind by traditional banks, and who can instead participate in the financial system through fintechs without meeting the documentation or minimum-balance requirements of conventional banks.”
D’Acunto further said that fintechs also enhance financial inclusion through crowdfunding platforms and digital savings and cash-management solutions, particularly for SMEs.
He highlighted that crowdfunding enables entrepreneurs to raise capital directly from a broad base of backers, bypassing the lengthy procedures, high collateral requirements, and risk aversion typical of bank lending.
“This opens critical funding channels for early-stage firms that lack established credit histories. Additionally, digital savings, cash-flow, and treasury tools allow small businesses to manage liquidity more efficiently, automate savings, and build financial buffers without the high fees or minimum-balance constraints imposed by traditional banks,” added D’Acunto.
Personalizing services
Saxo Bank’s Wright told Arab News that fintechs are raising the bar for personalized financial services by leveraging technologies such as AI, machine learning, and open banking, as these tools allow them to understand customers on a deeper level, analyzing spending patterns, savings habits, and investment behavior to provide tailored advice and smarter recommendations.
“With AI and ML, financial apps can suggest customized savings plans, offer predictive investment insights, and even adapt advice as a user’s financial situation changes. It’s about making money management feel intuitive and personal, not one-size-fits-all,” said Wright.
Hassan also echoed similar views, and said that fintechs in Saudi Arabia are built “data-first.”
He added: “With cloud-first issuing and processing, they can spin up spend controls, dynamic limits and micro-segments instantly, offering instalment options at checkout or adjusting features based on how a customer actually lives, spends and saves.”
Mounir Hijazi, CEO of Teleperformance for the Gulf Cooperation Council, said that fintechs use AI, behavioral analytics, and customer relationship management integration to build customer experiences that are not only personalized but also emotionally intelligent.
“In the BNPL space, predictive tools can tailor offers based on prior behavior, sentiment, or urgency. This level of real-time responsiveness allows consumers to make informed decisions that align with their goals, not just their credit scores.Technology is helping shift financial services from transactional to relationship-building loyalty through relevance,” said Hijazi.
Challenges faced by traditional banks
According to Hassan, traditional banks are under pressure on several fronts, as customer expectations have shifted dramatically after the advent of fintech companies.
“With 79 percent of retail transactions now electronic and digital wallets mainstream, consumers expect instant, mobile-first services as a baseline. Legacy cores were not built for this level of real-time interaction, configurability, or 24/7 availability,” said Hassan.
Expressing similar views, Wright said that traditional banks are restricted by outdated infrastructure, which makes it difficult to adapt quickly or launch innovative products.
The Saxo Bank official added that the legacy systems of traditional banks, often built decades ago, are not designed to support the speed and flexibility that modern digital banking demands.
Vitality of collaboration
According to Singh, a collaboration between legacy banks and fintechs is crucial as it will be beneficial for all key stakeholders, including customers and regulators.
“Banks bring trust, access, licenses and balance sheets; fintechs bring speed, technology and ‘fresh’ customer journeys,” he said.
Wright said that there are strong opportunities for collaboration between banks and fintechs, and many such entities are already exploring these partnerships to drive mutual growth.
“Open banking has been a key enabler, allowing financial institutions to securely share data and integrate services through APIs. This creates a more connected ecosystem where both banks and fintechs can offer customers greater convenience and choice,” he added.
Hassan from Paymentology expressed similar views and said that collaboration is the defining feature of Saudi Arabia’s fintech story.
He further said that the Kingdom’s Vision 2030 and the Financial Sector Development Program are deliberately designed to bring regulators, banks, fintechs, and global technology partners together around shared goals: higher inclusion, more digital payments, and a more diversified economy.
“We already see this in mission-critical sectors such as Hajj and Umrah, where ministries, banks, and fintechs are co-creating digital payment solutions tailored to the scale and complexity of the pilgrimage,” said Hassan.
He added: “There is a similar scope in SME banking, embedded finance for merchants, government disbursements, and the new use-cases emerging from SAMA’s open banking and instant payments initiatives. The banks that will win are those that actively curate these partnerships and combine their balance sheet and trust with fintech agility.”
