The Saudi banking industry has undergone significant development in recent years, with notable growth not only in asset sizes and lending portfolios but also through the widespread incorporation of modern technology and investments in fintech firms, which are proliferating in the kingdom.
Simultaneously, the stock market has experienced qualitative leaps in foreign investment levels, legal flexibility, and the availability of tradable financial products.
From 2018 to the end of April 2024, foreign ownership in the Saudi stock market surged by approximately 400%, reaching nearly 410 billion riyals.
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A series of reforms aimed at elevating and deepening the Saudi market has rendered it more capable than ever of serving the private sector as a primary tool for financing and attracting investments both locally and globally.
Empowering the market and financial institutions to support the private sector’s growth is a key target of the Financial Sector Development Program, which is instrumental in realizing Vision 2030. The Saudi financial services sector, once known for its traditional and static nature, has transformed into one of the most dynamic in the region, opening its doors wide to technological innovation.
The number of fintech companies in the Kingdom has steadily increased year after year, jumping from 89 in 2022 to around 200 in 2023, attracting investments exceeding 4 billion riyals over the past five years.
This has bolstered the private sector in two ways: firstly, by expanding financing channels and innovating financial services, and secondly, by providing entrepreneurs with opportunities to contribute to a sector traditionally dominated by large banks.
Saudi small and medium-sized enterprises (SMEs) have greatly benefited from the evolution of the financial services sector, capitalizing on the establishment of the SME Bank in February 2021. Moreover, the growing role of financing and real estate refinancing companies, which saw their lending portfolio increase by 24% to 85 billion riyals in just two years by the end of 2023, with SME financing accounting for 21% of this.
