Question

Personal Finance and New Technologies

Over the past decade, financial technology — widely referred to as FinTech — has grown primarily due to growing Internet access worldwide and the emergence of smartphones and apps.

Saudi Arabia is a pioneer when it comes to technology penetration in the region. The usage of technology in Saudi Arabia is advanced, whether in retail banking, cash management or corporate. Using financial technology improves the quality of the banking experience among clients. It influences the speed and accuracy of the experience. Technology makes products more reachable to clients. The introduction of FinTech will increase the Islamic finance customer base, which is roughly 100 million today, to 250 million by 2020.

Word Limit: 1500 - 2000 words

Answer 1

IN an era of globalization, every country’s standing on the world stage is increasingly determined by its willingness to embrace financial technology, and the Kingdom of Saudi Arabia is no exception.

As digitization becomes entwined in more areas of everyday life, nations must keep abreast of advances if they are to become – or remain – truly competitive.

Researchers at Tufts University in the United States studied the drivers of digital evolution across 60 countries, with an emphasis on financial technology. They stated that trust, momentum, and innovation all have a critical role to play when countries look to develop in the digital realm.

Digital momentum was defined as the rate at which countries have developed their digital economies since 2008. A high momentum score signaled opportunity and, typically, improvements in access – in other words, more people going online. It also reflects a society in which citizens are finding increasing value and utility in the digital space.

To investors and businesses, momentum is indicative of market attractiveness and potential; to policymakers, it is a proxy for competitiveness. Digital momentum also illustrates the pace of progress.

One only needs to look at Estonia to see how rapid this economic advancement can be. The former Soviet state has made headlines with its “e-residency” program. Foreign nationals can become an Estonian digital citizen with the ability to register a company, file taxes, and access other services available to its citizens – without a passport. Such initiatives may seem ambitious, but with an educated population, vast resources, growing infrastructure, and a highly motivated leadership, the sky really is the limit.

Closer to home, Saudi Arabia is taking bold steps to transform its economy, injecting dynamism into public-sector procedures by embracing e-governance and streamlining its public sector: boosting productivity, reducing headcounts, tackling corruption, and fostering inclusion – a bold journey that could see it leapfrog many emerging economies in terms of productivity.

A thriving financial technology sector could further accelerate this growth with benefits such as speed, cost, security, transparency, and trust. Advancements in payments technology ensure all of these benefits while helping create a robust payments ecosystem that is also future-ready. And global technology players like Mastercard have a key role to play in facilitating this transformation. In fact, Mastercard has served as a trusted advisor to governments around the world for decades. Our globally proven electronic payment services and innovative digital ecosystem and identity management solutions continue to help governments streamline their procurement, authentication and payment processes, manage information and expenses, and cut administrative and fraud costs, among other benefits.

As Saudi Arabia embraces a new era of digitization, Mastercard will continue to leverage its industry-leading capabilities and expertise to make payments safe, simple, and smart, and work towards making its global vision of a “World Beyond Cash” a reality in the Kingdom.