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"The Saudi Arabian Monetary Authority (SAMA) has selected 18 companies to form the second batch of ventures to join its fintech regulatory sandbox. The companies will be testing fintech solutions they intend to launch in the country."

The Saudi Central Bank (SAMA) is working on a phase of a project that focuses on domestic wholesale central bank digital currency (CBDC) use cases in collaboration with local banks and fintechs. SAMA stressed that although no decision has been made regarding the introduction of CBDC in the Kingdom, it continues to focus on exploring the benefits and potential risks of implementing CBDC.

The Middle East has seen a rapid rise in fintech in recent years, transforming the region's financial services landscape. Fintech makes the playing field increasingly dynamic and diverse, with various players, including financial institutions (FIs), offering innovative solutions across areas such as payments, lending, and wealth management. Governments in the region are actively supporting the development of fintech through regulations, investments, and initiatives to promote cashless payments. The region has also seen a boom in fintech investment, with several large deals and funds established to support startups. There is also a growing trend of collaboration between traditional banks and fintechs, as well as partnerships between regional fintechs and global players, to bring new solutions to the market.

Fintech Saudi published its 2021/22 Annual Report, which showed that the number of active Fintechs in Saudi Arabia has increased by 79% from 2021 to 147, marking a 14.7x increase in 4 years. The report anticipates further growth over the coming year, with the launch of three new digital banks, and the recent publication of the Kingdom's open banking framework, setting out legislation, regulatory guidelines and technical standards. Fintech Saudi was launched by the Saudi Central Bank in partnership with the Capital Market Authority in April 2018 to act as a catalyst for the development of the Fintech industry in Saudi Arabia.

The Saudi Central Bank (SAMA) launched its Open Banking Lab to provide banks and fintechs with a technical testing environment to enable them to develop, test, and certify their open banking services to ensure compatibility with the Open Banking Framework. The Open Banking Framework includes a comprehensive set of legislation, regulatory guidelines and technical standards based on international best practices to enable banks and fintechs to provide open banking services in the Kingdom.

The Saudi Central Bank (SAMA) announced that the share of retail sector electronic payments reached 62% of total payments, including cash, in 2022, surpassing the 60% target set out by the Financial Sector Development Program (FSDP) launched in 2017. The number of point-of-sale (PoS) transactions executed via the Saudi Payment Network (MADA) reached 7.2 billion transactions during 2022, an increase of 40% compared to 2021. MADA card online transactions grew by 76% in 2022, recording 610 million transactions. There were 1.4 million number of PoS terminals as at the end of 2022, an increase of 42% compared to 2021.

The Bank for International Settlements (BIS) Project mBridge is accepting value added products and new use cases as it reaches minimum viable product stage (MVP). The project aims to explore multi-central bank digital currency (CBDC) platform shared among participating central banks and commercial banks, built on distributed ledger technology (DLT) to enable instant cross-border payments and settlement. The project was launched in 2021 by the BIS Innovation Hub, in collaboration with the Bank of Thailand, the Central Bank of the United Arab Emirates, the People's Bank of China and the Hong Kong Monetary Authority. The Saudi Central Bank is now joining mBridge as a full participant. There are also now more than 26 observing members.

"As part of the Saudi Central Bank's (SAMA) pursuit to build a robust and innovative cross-border payments infrastructure in collaboration with various international financial institutions and central banks, SAMA has joined the Bank for International Settlements' (BIS) mBridge project as a participant in the Minimum Viable Product (MVP) platform."