Saudi Arabia is making significant progress towards becoming a global fintech hub, aligning with its Vision 2030 goals, according to a new KPMG report released at the conclusion of the Fintech 24 conference. Al Watan reported.

Despite global challenges in early 2024, Saudi fintech attracted over $1.14bn in investments between September 2020 and December 2023. In 2023 alone, investments surpassed $791mn, a 231% increase from the previous year.

Anton Ruddenklau, Global Head of Financial Services and Fintech Innovation at KPMG, stated: "Saudi Arabia's strategic vision is fuelling a fintech revolution. Growth in digital payments and open banking marks the beginning of a financial transformation that will reshape the Kingdom's economy."

The number of fintech companies in Saudi Arabia rose from 89 in 2021 to 226 in 2023, surpassing the Financial Sector Development Programme's targets.

Regulatory bodies, including the Saudi Central Bank and Capital Market Authority, have played crucial roles through initiatives like regulatory sandboxes and open banking frameworks.

A key growth driver is the shift towards a cashless society, with non-cash payments exceeding 70% in 2023. The strong payment infrastructure, including platforms like Mada and Sadad, has been central to this transformation.

Alternative financing options are gaining momentum, with peer-to-peer lending customers increasing from 76,000 in 2020 to 10mn in 2022. Debt crowdfunding reached SAR771mn in 2022, a 2.5-fold increase from the previous year.

Looking ahead, Saudi Arabia is investing in technologies such as Web3, metaverse and augmented reality. The Kingdom's focus on clean energy innovations is driving investments in climate technology and sustainable finance, with $443mn invested between 2018 and 2023.

Ovais Shahab, Head of Financial Services at KPMG in Saudi Arabia, concluded: "High-growth sectors like digital payments, alternative finance, open banking, and SME financing offer distinctive returns. For founders, expansion opportunities abound in the Saudi fintech ecosystem."