Key Technologies Shaping The Future Of Fintech Apps In Saudi Arabia

The financial industry of Saudi Arabia is undergoing a digital transformation due to technological advancements and government programs. Saudi Vision 2030 especially plays a key role in diversifying the economy and promoting world-class innovation. It has significantly created a favorable environment for startups and established firms to thrive. Thus, there has been a rise in the range of fintech applications regulated by the Saudi Central Bank. These emerging applications provide innovative solutions to consumers and businesses across the industry.

It has become a necessity for financial organizations to actively adopt advanced technologies and innovations to stay competitive. This article discusses the key technologies that are continuing to shape the future of fintech apps in Saudi Arabia. Financial organizations can enhance their customer experience and economic growth by integrating these emerging technologies with the help of a leading fintech app development company in Saudi Arabia.

Fintech Market of Saudi Arabia

The constant advancement of the internet and rise in the adoption of smartphones have accelerated fintech market growth in Saudi Arabia. The market size is expected to increase from $63.90 billion to $87.14 billion between 2024 and 2029. Thus, it is evident that fintech organizations are increasing the size of their audience by improving the accessibility and convenience of their financial services. This is further increasing and improving the connection between the country’s population and fintech. 

The government and financial institutions of the country are proactively working towards promoting innovation in the financial industry by implementing policies that promote competition, ensure data security, and encourage the development of new financial technologies. For example, rising advancements in data analytics and artificial intelligence allow fintech firms to provide better risk assessment, fraud detection, and personalized financial recommendations. Plus, changing consumer preferences in terms of data security, transparency, and accessibility are playing a crucial role in increasing the adoption of fintech. All these factors together support the market's growth in Saudi Arabia.

Key Technologies Shaping the Future of Fintech Apps

These emerging technologies are the key components shaping the future of fintech applications in Saudi Arabia. Read on. 

Internet of Things

In the context of fintech, IoT refers to the network of smart devices with internet network, sensors, and software integrated into financial services. These devices collect and exchange data in real-time without the need of human interaction. Moreover, they can perform specific actions like financial transactions, credit scoring and fraud detection.

As one of the major technologies transforming fintech applications, IoT has enhanced customer satisfaction and facilitated innovative solutions. The use of IoT is still on the rise as its impact on the fintech industry is expected to increase in the upcoming years.

Artificial Intelligence and Machine Learning

Artificial intelligence is the machine generated imitation of human-like intelligence. This technology enables the machines to perform repetitive and laborious functions. Machine Learning is a subdivision of AI which enables systems and devices to learn and improve. This technology develops and uses algorithms to analyze data and perform tasks without explicit instructions.

AI and ML are leveraged by the fintech industry to automate repetitive tasks. These include detecting human errors, strategies recommendation, fraud prevention, and quality checks. Self-learning apps like chatbots can prepare insights which help improve financial services. For example, they can analyze customer behavior and patterns to provide suggestions for better service.

Robotics

Robotics is an advanced technology aimed at creating intelligent machines that can support human tasks and performance in various ways. It can take many forms resembling humans or robotic applications such as Robotic Process Automation (RPA). This application is a simulation of human interactions with software that take place to perform repetitive tasks that are rule-based. 

In the fintech industry, RPA offers significant advantages like automating operations and reducing the processing time for customers. It efficiently communicates with legacy systems and garners accurate data to complete tasks at a faster pace. 

P2P Lending or Alternate Lending

Peer-to-peer (P2P) lending refers to the practice of lending money from online services to businesses or individuals. The companies offering this service attempt to provide cheaper services than traditional financial organizations. This alternative makes it possible for individuals to obtain loans directly from other individuals. It eliminates the need to go through a bank or other financial institution.

The apps and websites facilitating P2P lending have increased in recent years as an alternative method of financing. This system is also known as "social lending" or “crowd lending”. Moreover,  each P2P lending platform has the freedom to set its own rates and terms. Most sites have a variety of interest rates based on the credit score of the borrower.

Blockchain

Blockchain is a distributed and decentralized database that exists across a computer network. The technology is popularly known for its use in cryptocurrencies like Bitcoin. It maintains secure and decentralized records of transactions. Blockchain exists as an immutable block which can be used to develop the entire FinTech app ecosystem. 

Financial transactions on the block do not require a third party intermediary. It can be used to build peer-to-peer networks and high-speed trading while maintaining transparency. This technology can transform a basic financial process into a genuine procedure based on secure and efficient transactions. 

Cloud computing

Cloud computing refers to the storing and managing of data on remote servers on the internet. This data can be accessed over the internet at any time and from anywhere. The cloud used to store data is provided by a cloud service provider on a subscription basis. Thus, this technology eliminates the need to own a physical infrastructure for storage.

Cloud computing allows all Saudi fintech organizations to incorporate scalability and flexibility into their business models. It provides agility and helps them to stay competitive in the rapidly changing markets. It is cost effective as building an infrastructure for data storage is no longer required. This also eliminates the risk of wasting resources in building a larger infrastructure than required or expanding it if need expands.

Regulation technology

Financial institutions and businesses of all sizes are required to adhere to numerous legal regulations and laws. Some of these include maintaining customer data, accounting records, tax and income reports. Regtech (Regulatory Technology) allows them to utilize technologies like compliance monitoring, data analytics, risk management tools, and reporting systems. This helps them in facilitating regulatory compliance in the fintech industry.

Conclusion 

Saudi Arabia is working towards advancing their economy by embracing digital transformation. This is positively impacting the financial industry and has led to the emergence of fintech applications. These apps are rapidly advancing and are expected to become a crucial component of everyday life. The integration of the emerging technologies mentioned above is providing more personalization, efficiency, and inclusivity. A good fintech app development company can help financial institutions and startups to integrate these in their business. This can help them stay ahead in the competitive market.