Innovative banking in focus at fintech gathering

It is important to make consumers see the value of open banking to promote open finance in the long run, fintech experts said at a forum in Saudi Arabia on Monday.

"The customers have to see the real value," said Sultan Al-Hamidi, chief business officer of Social Development Bank, during a panel discussion at the World Fintech Show in Riyadh. SDB is a Saudi development bank based in Riyadh.

In partnership with a few other banks in 2019, the SDB launched its first savings product for the low-income segment. The product has now attracted around 150,000 customers, drawing in around 300 million Saudi riyals ($79.8 million) in savings.

Open banking is a practice that allows third-party financial service providers to have open access to financial data from financial institutions with the customers' consent through the use of application programming interfaces, or APIs.

In November, the Saudi Central Bank issued the Open Banking Framework as one of the key outputs of an open banking program, which is part of Saudi Arabia's broader fintech strategy that is linked to the Saudi Vision 2030, a development plan to reduce the nation's dependence on oil.

Cashless societies

Karl Tlais, founder and strategic adviser at the iAdvisory consultancy in Dubai, said when it comes to cashless societies, the three core ingredients are technology, regulatory governance and the culture of adoption.

During the pandemic, digital wallet platforms such as WeChat Pay and Alipay in China and GrabPay in Southeast Asia have achieved success, said Tlais, adding that e-wallets are born out of the idea of open banking and it is important to understand how they have kept the economy moving through technology.

Tlais said more innovative integration and a higher level of personalization are needed for banking services as the income of Generation Z — people born between 1995 and 2010 — is expected to reach $33 trillion by 2030.

Aamir Janjua, chief product officer at open banking provider Spire Tech, said what matters the most in open banking is the value that can be delivered to the consumers.

"At the end of the day, consumers do not really care what kind of technology is used as long as they get options and value," said Aamir, adding that it is also necessary to simplify the open banking process and make the ecosystem more mature and secure to connect different parties.

Held on Monday and Tuesday, the World Fintech Show brought together government officials, global fintech experts, startups and investors to discuss the fintech ecosystem in Saudi Arabia.