Fintech is defined as the design and delivery of financial products and services through technology. Fintechs are currently on the rise globally, but according to recent research, there have been some barriers with implementing fintech for financial services in Saudi Arabia. Although there are over 150 fintech startups currently registered in Saudi Arabia, this is a slower trajectory compared to other countries in the Middle East, including UAE and Jordan. The question, then, is what exactly is slowing down the progression of fintech in Saudi Arabia? The answer to this lies within the consumer behavioral intentions to adopt the use of fintech in their daily lives in the kingdom. As with any change in the way a society functions, there will of course be resistance from consumers, as has happened with all advancements in technology. However, the concerns consumers specifically in Saudi Arabia have been a result of suspicions of having their financial information secure and confidential, and a fear of losing money due to what are perceived as ‘hidden charges’ that come with the use of fintech.
To overcome these barriers, tech startups in Saudi Arabia, specifically fintech, need efficient behavioral analysis of their consumers. A study was conducted on 361 fintech users in Jeddah, Saudi Arabia, to understand their willingness and acceptance of Fintech (Bajunaeid, et. al, 2023). It was revealed that there is generally a lack of awareness regarding financial privacy with the use of fintechs. Within marketing of fintech and implementation, financial privacy regulations in fintechs should be emphasized and explained thoroughly to customers to make them feel more secure before purchasing fintech services in Saudi Arabia. This can also be done by allowing consumers to understand the fintech laws Saudi Arabia currently has to protect consumers, as well as the fintech regulations in Saudi Arabia. Regarding any other concerns consumers have, there are legal services in Saudi Arabia which can ensure that Fintechs are complying and operating within the laws of the kingdom, particularly Sharia Law. If this is properly advertised as well, there will be less hesitance from consumers to adopt fintech.
Research has shown that if users are fully informed and understand the use of fintech, they are more likely to use fintech long-term, especially if the fintech services are user-friendly. Although there is currently a lot of competition with traditional banking in Saudi Arabia from banks which are well-established for many years now, banks are slowly implementing fintech as well, which might allow fintechs to reach wider consumer bases. However, as previously stated, with any change that comes with the advancement in technology, the consumer comes first. Fintech services should be properly and thoroughly explained to consumers with all their concerns addressed. Fintechs should also address these concerns when it comes to the business setup of the fintech from the very beginning, by ensuring that their services are aligned with Sharia Law and have sufficient data privacy regulations in Saudi Arabia.