Interview with Naif AbuSaida, founder of Hakbah, on the fintech landscape in Saudi Arabia

Young, vibrant, and tech-savvy population … Naif AbuSaida, the founder of Hakbah, depicts the fintech landscape in Saudi Arabia

The fintech landscape in Saudi Arabia has experienced remarkable growth and transformation with over 200 fintech firms operating in the country as of August 2023, representing a staggering 300% increase in the sector since 2021. As part of the Financial Sector Development Program, the government targeting to have 500 fintech companies by 2030.

This growth can be attributed to several factors, including high smartphone penetration, extensive internet connectivity, and evolving consumer preferences that embrace digital solutions. As fintech apps provide more and more services the reliance on digital devices will only grow.

The latest KSA census figures for 2022 puts the population at just over 32 million with those under 30 years of age, making up 63% – resulting in a young, vibrant, and tech-savvy population.

In 2024, approximately 92% of Saudis have access to or own a smartphone. The demographics and smartphone use mean the Saudi fintech market presents significant opportunities to leapfrog legacy infrastructure and focus on innovation and expansion to help solve economic and societal problems such as financial exclusion or more particularly a low personal savings rate.

The Kingdom of Saudi Arabia has taken big steps to promote a business-friendly environment and implement regulatory reforms that will bring a better balance between personal spending and saving.

For a start, the Regulatory Sandbox established by the Saudi Central Bank (SAMA), has allowed local and international fintech companies to test their products and services in the Saudi market. This successful initiative has created new opportunities for fintechs while mitigating risks associated with market entry.

The KSA Government has also introduced and supported various initiatives to promote savings and financial literacy nationwide. The Zood savings program, for instance, led by the Saudi Development Bank, and the Financial Sector Development Programme under Vision 2030 are good examples. These initiatives aim to diversify the financial sector, boost household savings, and foster economic development and inclusion and I believe are bearing fruit.

In February, Saudi Arabia launched Sah - its first governmental bond for individuals - with a yield reaching 5.64% on the first issuance. The goal is to enhance financial planning for the future, increase individual savings rates by encouraging periodic deductions from their income for savings, and expand the range of savings products available.

The savings crisis we are addressing is a major structural problem for Saudi Arabia and its citizens. Solving it is critical to the Financial Sector Development program and therefore a key strategic objective in ‘Saudi Vision 2030’.

Back in 2018 when I founded Hakbah, I saw a need for a revolutionary, decentralised savings platform that could solve the Middle East’s savings crisis. We wanted to innovate and transform societal behaviours and attitudes toward savings. Some 70% of Saudi citizens do not have any savings at all, while the country’s household savings rate averages just 1.6%. Therefore, we created a product that focuses on saving to spend.

Our flagship product, Hakbah App, digitises traditional group savings - aka Jameya - by enabling users to save and access funds via social savings. Users can prioritise their needs, identifying their total requirement for funds needed over time – and then sharing the pool of money, which is rotated amongst them.

Our app is simple to use, with a low one-time joining fee per Jameya starting under USD 5. Plus, a fixed fee for on-demand ancillary services. This transparent pricing structure contributes to our platform's impressively high repeat customer ratio – far exceeding traditional, non-digital Jameya – and a very low default/delayed rate (less than 1%).

Using our platform, Hakbah makes traditional saving habits more effortless, accessible, and personalised; it is tackling the major savings crisis in the Middle East; and educating younger generations on the benefits of building savings.

As a result of all these efforts Hakbah is now one of the fastest growing fintechs in the region. We have a customer base of over 500,000 users, of which 70% are between 21-35 years old.

Whilst there are a handful of players in the space, the main competitor to Hakbah is the traditional, manual savings groups.

Our strategy is to partner with major stakeholders who can help us improve our service to customers by expanding our offerings at an affordable cost.

We were delighted in December 2023 to announce a new partnership with Tarabut – MENA's leading Open Banking platform. The partnership provides several benefits for Hakbah as it simplifies and expedites various tasks. It will enable streamlined onboarding and enhanced data processing for customers, reduce the cost of Hakbah’s service, cut data processing time by 40%, and expand the customer offering by 20%.

We have also struck several blue-chip partnerships with the likes of flynas, the national low-cost airline in Saudi Arabia and the Middle East. We look forward to continuing to partner with similar key and strategic stakeholders in the fintech ecosystem.

The little fraud cases we see amongst savings are often a result of a lack of awareness and education on account privacy instead of people hacking and penetrating the networks.

One of the reasons why fraud is very low is because the governmental technology infrastructure in place is very strong. All the authentication and the KYC process, for example, is digitalised and run by governmental channels which is faster, easier, and more trustworthy.

The KYC process in Saudi Arabia is fully digitalised. The National Information Centre has licenced three semi-governmental organisations which are the intermediaries.

When we look at Saudi Arabia as a country, the government has successfully implemented widespread digital infrastructure, enabling businesses to be in a strong position to combat fraud.

Digital technology has introduced new levels of prevention and checking done at very high speeds. Fintechs, such as Hakbah, look to introduce or work with systems that cannot be easily accessed or replicated. We have a Digital Government Authority that spearheads the effort and is one of Saudi Arabia's biggest supporters and enablers of fintech and startups. We look to all SAMA and CMA initiatives to empower the financial sector and embrace innovation. You will be surprised by how innovative government entities are compared to most companies and startups.  

I am optimistic about the outlook of financial services innovation in Saudi Arabia in 2030. The continued penetration of smartphones which, having climbed from 47% in 2013 to 92% in 2024, will contribute to the sustained opportunity to innovate – changing how we live our lives in Saudi Arabia.

Saudi Arabia is already halfway to 2030 and, in many areas, the Kingdom has overachieved on its initial goals. Reports from the Saudi Central Bank (SAMA) announced digital payments reached 70% of all retail transactions in Saudia Arabia last year, up from 62% in 2022. We will continue to see the transition to digitalised payment and savings methods in years to come.

About Naif AbuSaida

Founder & CEO – Hakbah Fintech

Naif AbuSaida is a cross-functional leader with over 24 years of experience in different industries (Banking, Energy, Power & Water, Healthcare, Telecom, Aviation, Logistics, Tourism, and Technology).

Naif nowadays is an Advisor to the CEO for Marketing and Communications at NEOM (Multi-Billion Dollar Mega-City) and Founder and CEO of Hakbah Fintech, permitted by the Saudi Central Bank for Savings. He is an independent board member in four licenced funds in Saudi Arabia (Fintech, Real Estate, Quality of life, and Industrial Fund).

Naif was an active member of the technology media as an additional job, where he worked as a technology specialist journalist, writer, reporter, and TV anchor for several major outlets such as Orbit TV, Aleqtisadiyah newspaper, and Alriyadh newspaper. Naif holds a bachelor’s degree in media and journalism from Jazan University.