Digital banks to increase competition with Saudi banks, fintech firms: official

Logo of SAMA 

Licensed digital banks in Saudi Arabia will provide various services and products for their customers through improving quality and user experience, supporting innovation and reducing costs, Al-Eqtisadiah reported, citing Yazeed Al-Sheikh General Director of Banking Control at the Saudi Central Bank (SAMA).

This move will directly contribute to stimulating competition with local banks and fintech players.

The difference between fintech firms and digital banks is that the former mainly focuses on innovative technology for a certain activity and offers a certain financial product or service to the target category through digital platforms or smart applications.

Digital banks provide integrated banking services and products, such as the acceptance of deposits, finance, customer services through digital channels only. Moreover, digital banks have a different legal nature and other regulatory requirements, Al-Sheikh explained.

SAMA aspires to support innovation and increase competition in the banking sector, to achieve economic growth and financial inclusion.

The Saudi Cabinet licensed two digital banks. First, stc pay will be converted into a local digital bank - STC Bank - with SAR 2.5 billion capital. Second, several companies and investors, led by Abdul Rahman bin Saad Al Rashed and Sons Company, will establish Saudi Digital Bank to conduct banking business in the Kingdom, with a capital of SAR 1.5 billion.