Saudi Arabia is rapidly advancing towards a prosperous future, driven by the transformative Vision 2030. Mohammed Al-Jadaan, the nation’s Minister of Finance and Chairman of the Financial Sector Development Program Committee, emphasizes the ongoing economic evolution made possible through financial and economic reforms. These efforts are paving the way for a bright and sophisticated future in the financial sector.
Embracing Technological Advancements
The Financial Sector Development Program is a cornerstone of this vision, aiming to integrate the financial sector with the digital and technological economy. By leveraging cutting-edge technologies like artificial intelligence and big data, Saudi Arabia is set to achieve an advanced economic future. This initiative is one of eleven executive programs launched by the Council of Economic and Development Affairs to meet Vision 2030’s ambitious goals.
The program’s objectives include diversifying and expanding the financial sector to bolster the national economy, encouraging savings, financing, and investment, and enhancing the sector’s efficiency to tackle challenges effectively. Underlining these efforts, the finance minister proudly notes Saudi Arabia’s impressive ranking as the third most competitive nation among the G20, as per the Global Competitiveness Center of the International Institute for Administrative Development.
Global Leadership and Strategic Vision
Minister of Investment Khaled Al-Falih highlights Saudi Arabia’s steadfast commitment to its strategic vision amidst global geopolitical shifts, rising financing costs, and stringent monetary policies. The Kingdom’s proactive structural financial and economic reforms have resulted in decreased inflation rates and an attractive investment climate, culminating in an upgraded A+ credit rating.
Saudi Arabia leads the Middle East and North Africa region in venture capital investments and has experienced significant growth in investment licenses for financial and insurance institutions. The Ministry of Investment’s collaborative efforts with various governmental bodies have attracted major international financial entities, facilitating foreign direct investment in the insurance sector and even listing the first exchange-traded fund tracking Saudi stocks on the Hong Kong Stock Exchange, positioning the Kingdom as a global financial hub.
Empowering Growth and Innovation
Minister of Economy and Planning Faisal Al-Ibrahim celebrates the Financial Sector Development Program’s success, which has spurred a 5.2% annual growth in financial, insurance, and business services activities up to the third quarter of 2023. This momentum, spearheaded by the Central Bank and the Capital Market Authority, supports the National Investment Strategy by boosting the Kingdom’s financing capacity.
Governor of the Central Bank of Saudi Arabia, Ayman Al-Sayari, underscores ongoing initiatives to develop regulatory frameworks and empower the financial technology sector. These efforts include establishing regulations for postpaid companies, digital brokerage activities, and digitizing supervisory procedures. The number of technology firms has already surpassed the 2023 benchmarks, reaching 216.
Chairman of the Capital Market Authority, Mohammad Al-Kuwaiz, notes the adoption of foreign investment regulations in securities, which has increased foreign investment volume to SAR 401 billion ($106.9 billion). The Public Investment Fund (PIF), led by Fahd Al-Saif, plays a pivotal role in empowering small and medium enterprises, aiming to increase local content contribution to 60% by 2025.
Khaled Al-Shareef, Chief Administrator of the National Development Fund, highlights the fund’s role in developing the financial sector through the Small and Medium Enterprises Bank. The bank identifies needs, fills financing gaps across economic sectors, and enhances financing services for SMEs.
Looking ahead, the Central Bank plans to empower both local and international financial technology firms in the Saudi market by 2024, alongside launching digital banks and savings product initiatives. The Capital Market Authority aims to increase the Saudi market’s appeal for foreign investors, targeting a 17% foreign ownership of the total market value of free shares by the year’s end.
