Saudi Arabia Embraces Digital Transformation in Banking Sector

Saudi Arabia’s banking sector is undergoing significant changes as part of the country’s broader economic diversification efforts. Both traditional banks and emerging digital-first services are adapting to meet the evolving needs of consumers.

A recent survey by management consultancy Capco reveals that 86% of Saudi banking customers are interested in apps providing comprehensive overviews of various financial products, including bank accounts, insurance, pensions, and investments. Mobile banking is particularly popular, with 81% of respondents accessing banking products via mobile apps, compared to 36% using computers.

Trust in mobile and digital banking services has surged over the past two years. Nearly half of the survey respondents reported increased confidence in these platforms. This growing trust extends to tech companies offering financial services and fully digital banks without physical branches, indicating a strong openness to tech-based banking solutions.

Processes such as account applications and onboarding, traditionally seen as hurdles, have also become smoother. According to the survey, 79% of respondents now find onboarding easy or extremely easy compared to two years ago.

Artificial intelligence (AI) features in banking apps are generally well-received. Most respondents are comfortable with AI guiding their financial decisions, with only 10% expressing discomfort with the technology.

Key factors driving consumers to choose a particular financial service include better accessibility and a wide range of services, with 47% of respondents citing these as top motivators. Additionally, there is a notable interest in premium services, with 30% of respondents willing to pay more for value-added options such as cashback, points systems, and monthly offers.

Overall, Saudi banking customers are looking for apps that provide a diverse array of financial and non-financial services. The survey suggests that banks and fintechs that can leverage open banking trends and offer tailored comprehensive digital services will be well-positioned to meet the demands of the Saudi market.

“The appetite for an app that provides access to a wide array of financial services in one place could be a positive for those banks looking to offer a broad range of convenient digital services,” the Capco report notes. “Tailoring banking services and products more closely to customers’ needs and lifestyles has become an increasingly visible trend in financial services, and KSA’s retail banking consumers are warm to the concept and willing to share the necessary personal data.”