Banque Saudi Fransi intends to establish a corporate venture capital fund to invest in fintech businesses, according to Grant Niven, head of group digital at Banque Saudi Fransi.
Niven said that most banks in the country have now changed their approach to startups, highlighting the growth of the fintech sector in Saudi Arabia, where more than SAR 1 billion ($266 million) have been invested in fintech startups so far this year.
It is expected that a further SAR 2.5 billion will be invested in Saudi fintech startups, which traditional banks see as an opportunity, he said during a panel discussion at Fintech Surge, part of GITEX Global 2022 in Dubai.
“What I’ve seen in Saudi Arabia is a massive uptick in terms of [the] innovation agenda, we have 80 active fintechs in the sandbox with aspirations to get to 250 by 2025,” he explained.
“The workforce associated with that is 6000 people working in that community. As a bank do you see that as competition or an opportunity to co-create? We’ve had to change the way we think about partnerships.”
Saudi Arabia’s Central Bank announced its intent to launch an open banking regulatory framework in the kingdom last year. The regulations, which allows banks and other financial institutions to collaborate with fintech startups through open application programming interfaces (API), is set to come into effect this year.
“Open banking is allowing us, through a controlled way, to open up our data, which traditionally banks don’t do,” said Niven, who added that banks are now looking at open banking as a way to “go beyond compliance to deliver great products to customers”.
He added: “One of the initiatives we have been working on is how we can collaborate. We need to be API ready to engage with third parties. One major initiative we have is to launch banking as a service, which is no mean feat. We’re enabling a lot of our services to offer our API to fintechs.
“In contrast to competing with them, our goal is to cooperate with other banks, and the other banks will follow our lead”.
