The Saudi Central Bank (SAMA) recently announced granting permit to a new batch of companies; Lean Technologies and Mod5r to “provide Open Banking Solutions; bringing the total number of permitted Fintech companies operating under its Regulatory Sandbox to 38.”
This step completes “a series of actions undertaken to conquer a stack of strategic objectives including activating SAMA’s sandbox environment role to the realization of the Kingdom’s Vision 2030 goals through the Financial Sector Development Program (FSDP).”
The prominent FSDP is “an ambitious program aims at promoting economic growth, savings and investment activities and the financial inclusion.” The permit came concurrently with the Council of Ministers’ decision on the second quarter of 2022, which “provides for adoption of the Fintech Strategy containing the supreme directive order for the Kingdom of Saudi Arabia to be among the leading countries in the field of Fintech.”
It is worth noting that SAMA is currently “working – alongside other participants in the financial sector including banks and Fintech companies – on developing and implementing an integrated high standard network to carry on Open Banking Solutions in the Kingdom with the most innovative and best practices within a predefined timetable.”
This phase should “contribute to inspire other participants within the sector to start planning and develop innovative new financial products and services based on the Open Banking practices.”
As covered last year, the Saudi cabinet has reportedly granted a digital banking permit to STC Pay, a virtual payments solution provider that’s a wholly owned subsidiary of Saudi Telecom. STC Pay will now be converted into a domestic virtual bank, with a capital of SAR 2.5 billion (appr. $670 million).
As reported by Reuters, the company will be adding another 802 million SAR (appr. $213.85 million) in order to retain 85% of STC Pay’s share capital, with Western Union investing 750 million SAR (appr. $200 million) for the remaining 15%.
A second virtual bank license has been granted by Saudi regulators to a group of firms and investors who are being led by Abdul Rahman bin Saad Al-Rashed and Sons Company, in order to form a local virtual bank with a capital of SAR 1.5 billion (appr. $400 million).
The Saudi Central Bank (SAMA) will be focused on finalizing the relevant technical and operational requirements for the two banking platforms so they can begin their business activities in the MENA region country.