Fintech Adoption in Saudi Arabia: A Quantitative Analysis of Financial Impacts and Regulatory Challenges within Vision 2030

Abstract

Introduction: Global financial ecosystems are changing rapidly as countries are adopting financial technology, or Fintech, and Saudi Arabia is no exception. The current study focused on exploring the impacts of Fintech adoption in Saudi Arabia within the context of Vision 2030. A mixed-method approach is used with the main focus on financial inclusion, transaction costs, and economic growth. The quantitative aspect of the study explored financial metrics, and for qualitative data, interviews and focus groups were conducted with key stakeholders. The findings of the study showed that Fintech adoption had a great impact on financial inclusion, transaction costs, and GDP. From 2018 to 2023, the unbanked population was reduced by 25%, with a 40% increase in rural banking adoption. A 35% decrease was seen in transaction costs, and SMEs experienced a 66.6% decrease in fees. Fintech led to a 2.8% increase in GCP annually. The GDP growth was mainly driven by SMEs and foreign investments that led to a total USD 2 billion increase during the study period. This research also identified regulatory challenges, which include cybersecurity risks, compliance complexities in anti-money laundering, and the need for solutions that are Sharia-compliant. In addition, the study showed that the SAMA Regulatory Sandbox facilitated product launches and increased user confidence, showing its effectiveness. The adoption of Fintech is in line with Vision 2030's objectives. However, to realize its full potential, it requires investments in innovation, regulatory collaborations, and focused assistance for marginalized groups. By tackling these issues, Saudi Arabia can establish itself as a Fintech leader in the region, promoting financial inclusion and long-term economic prosperity