1,229
Survey responses
58%
Male
42%
Female
70%
Citizen
30%
Long-term resident
The banking landscape of the Kingdom of Saudi Arabia (KSA) is being reshaped by a wave of innovation, with incumbent banks, digital-first challenger banks, and fintechs competing to deliver the financial services required to support fast-evolving consumer lifestyles and aspirations.
The strong tailwinds for change include KSA’s national ambitions to modernize and digitalize its economy; the regulator’s positive stance on innovation; and a youthful, increasingly affluent population that is keen to adopt rapid, convenient banking services.
The stage is set in terms of customer behavior, with eight in ten (81%) of our survey respondents now using mobile apps to access banking services, and six in ten (57%) naming digital wallets as a preferred payment method. The demand for convenience and instant fulfilment is being joined by a desire for improved insights and greater personalization:
Nine in ten respondents (86%) are attracted by apps that can provide a better view of all their financial products in one place – including bank accounts, insurance, pensions and investments.
The vast majority (84%) also want apps that provide personalized insights into their finances. Two-thirds (67%) would ‘probably’ or ‘definitely’ share additional personal data such as social media profiles to unlock ambitious personalized services.
Despite worries in the media about AI, seven in ten (68%) are comfortable to be guided by AI in their day-to-day financial decisions.
Meanwhile, almost half of respondents (44%) claim they are likely (26%) or extremely likely (18%) to switch banks in the next 12 months – often in pursuit of more and better services/offers – despite most (93%) also saying they are satisfied with their current primary bank.
The opportunity to win and retain tomorrow’s customers through introducing more customer-centric banking services arrives with challenges. These include transforming bank core systems to keep up with the demand for real-time data and implementing AI use cases in a safe and ethical way. We hope this report sheds light on emerging customer attitudes and the implications for bank strategies.
Statistics derived from Capco’s core attitudinal survey; see Methodology for information about our supplementary survey.
Chart 1
Demographic
(Respondent age)
18 - 24
25 - 34
35 - 44
45 - 54
55 - 64
16%
25%
30%
21%
9%
Saudi Arabia continues to invest in its flagship economic reform plan – Vision 2030 – which aims to move the country away from oil-based revenues towards a more diversified economy.1 Banking is at the heart of this effort, as is technology and the fintech sector. Together they will enable new models and offerings that will redefine the retail banking landscape.
Consequently, there is considerable government support for developing new digital banking services, and digital services in general. This support can be seen not just in terms of the regulatory stance towards innovation in the banking sector driven by the Saudi Central Bank (SAMA) and Saudi Payments, but also in ongoing efforts to develop the country’s underlying digital infrastructure. Saudi Arabia’s Public Investment Fund – one of the world’s largest sovereign wealth funds with US$925 billion AUM – is a significant driver of change with stakes in both the banking and technology sectors aligned with Vision 2030.2
Several demographic developments over the last decade must also be considered by banks. First, the increasing financial independence of women.3 Many more women own a bank account than was the case ten years ago and more are active investors.
Second, Saudi Arabia has a young, growing population. According to the 2022 census figures, published in May 2023, the population stands at 33.2 million, after average annual growth of 2.5%.4 Nearly two-thirds of Saudis (63%) are under the age of 30. There has also been a decrease in the number of foreign nationals, with non-Saudis now accounting for 41.6% of the population.
It is also an increasingly affluent population. According to the Global Wealth Report produced by Credit Suisse, the number of US dollar millionaires in KSA rose by 8% in 2022, reaching 354,000 – ranking it as the country with the highest number of millionaires in the region and 23rd globally.5
The existence of the census data is itself worth noting. The 2022 census was described by the minister of economy and planning as “the most comprehensive and accurate” in the Kingdom’s history, with the results offering a “key pillar for planning and decision-making ... and supporting the investment environment in the kingdom.”
More generally, Saudi Arabia has invested heavily in developing its digital data infrastructure, including the formation of a Saudi Data & AI Authority in 2019 as well as the National Data Management Office. The Saudi Open Data Portal was launched in late 2023 with the mission to provide public data for the private and public sector.6 Meanwhile the National Data Bank – described as “a constellation of interconnected robust national data platforms” – has onboarded more than 50 state agencies, hosts more than 6,000 open datasets, and has developed more than 200 open APIs.
Finally, the SDAIA has formally released the Saudi Arabia Personal Data Protection Law, modeled on the EU’s General Data Protection Regulation and due to come into force in September 2024.7 Banks will have to invest in their data management systems to remain compliant and to take advantage of emerging ecosystem opportunities, for example, through developing their API architectures to enable links to fintechs and other partners.
There is considerable government support for developing new digital banking services and digital services in general.
Current banking landscape
Saudi Arabia has a well-developed banking market, with the established players offering a range of omnichannel banking services including online and traditional branch-based banking. So far, most digital-first providers of banking services command only a small share of the market, although stc pay has demonstrated that digital-first offerings can achieve significant market penetration.
The majority of our KSA survey respondents had multiple bank accounts. The reason for having multiple accounts varies between splitting up activities such as salary transfer, spending, and saving; separating personal/family/business accounts; taking advantage of account offers/discounts; and gaining diversification benefits while taking advantage of the different strengths of banks.
Among our respondents, the most commonly used incumbent banks are Al Rahji Bank, Saudi National Bank, Riyad Bank and Alinma Bank. Al Rahji is the bank with the highest take up and its services are used by around three-quarters of our survey respondents.*
Eight in ten respondents (81%) have accounts with digital-first banking service providers. However, the adoption rates for most of the digital-first firms are relatively low. Only three digital-first firms are used by more than 10% of respondents: stc pay, iPay, and Payoneer.
Of these leading digital-first contenders, stc pay has by far the most significant market share among our respondents (59%). It was established by the Saudi Telecommunication Company (STC) in 2017 as a digital payments platform, accessible via mobiles. In June 2021, the Central Bank approved its conversion into a digital bank by granting a banking license.8
In contrast, Qatar-based iPay and US-based Payoneer are international and multi-currency digital wallet providers. Their respective popularity shows that there is a clear demand among Saudi Arabia’s consumers for innovative and international offerings, including easy money transfer. Furthermore, the use of iPay is higher among KSA citizens than it is with long-term residents.
The respondents in our survey who say they have accounts with digital-first firms are using them for a range of services, most frequently money transfers (49%) and current account services (47%).
When we asked those who do not have a digital-first account to name the leading reason for this, the largest number said that it was because their current bank offered everything they needed (28%), or that they were interested but needed to learn more about digital-first providers (22%). Other reasons included that they wanted to be able to visit a branch or had concerns about whether their money or data would be safe.
*The data in this section is drawn from our supplementary survey of 500 KSA respondents; see Methodology section.
Implications:
Almost one in five (19%) respondents do not yet have an account with a digital-first firm and there is an opportunity for fintechs and licensed institutions alike to collaborate and offer a wider range of financial services to increase adoption. While stc pay has a significant market share and recognizable brand domestically, our survey shows there is also a demand for international digital banking brands among Saudi citizens with a more global outlook.
Banking behavior
Our KSA respondents have a significant appetite for, and confidence in, digital banking services – but they also show a continued attachment to cash.
Mobile apps have quickly become the most common way for consumers to access banking services. Eight in ten respondents (81%) now use this channel, making it more than twice as prevalent as desktop/laptop and telephone access.
Chart 2
How do you currently access banking products and services?
(Multiple selections permitted)
Mobile app
Desktop/Laptop
Telephone
In Branch
Wearable
Technology
81%
36%
31%
30%
15%
12%
Consumer trust in mobile and digital banking services has grown in the last two years. According to our survey, 84% of respondents have become more confident in using these services in that period, with towards half (41%) saying their confidence has ‘significantly’ improved.
That said, KSA banking service consumers are ambitious for further improvements. The majority (83%) of our respondents told us they want a better online banking experience from their provider.
Chart 3
Do you want a better online experience from your banking provider?
Yes, definitely
Yes, it can be improved
I’m not sure
No, it’s fine
No, it’s already amazing
46%
37%
12%
2%
3%
Meanwhile, digital channels are rapidly becoming the dominant payment method for many consumers. When we asked those respondents who told us they use payment services to name their preferred payment method, 65% mentioned online payments (the same number that cited card payments) and over half (57%) mentioned digital wallets.
For the moment, smaller numbers say they prefer to use contactless (30%) or wearable technologies (13%), but this compares to only 11% who mentioned traditional cheques.
Cash is far from dead in KSA, being a preferred method of payment for over half (55%) of our respondents.
Chart 4
What are your preferred payment methods?
(Multiple selections permitted)
(Base: Those using payments services)
Cards
Online payments
Digital wallets
(Apple Pay, Google Pay, Samsung Pay etc.)
Cash
Online transfers
Contactless
Pre-paid cards / Wallets
(Starbucks etc.)
Crypto
Invisible payments (e.g. Uber)
Wearables
Cheques
65%
65%
57%
55%
55%
30%
25%
20%
14%
13%
11%
Answering a separate question about the type of financial services they use, respondents mentioned current accounts (63%), credit cards (57%), and money transfers (51%), among other services. However, one in five (20%) also cited Buy Now Pay Later services, reflecting the fast growth of the BNPL sector in Saudi Arabia over the last few years.
About half of our respondents (45%) say they feel well-informed about the range of banking products they might consider using, however, almost the same number (44%) say they feel only ‘partially informed’. This suggests that banks have an opportunity to further educate customers in Saudi Arabia’s fast-evolving financial services marketplace.
Implications:
The enthusiastic adoption of smartphones, digital technology and new forms of payment in Saudi Arabia will be a key factor in shaping the bank of the future. Saudi consumers have grown comfortable with digital banking and innovations such as wearables. However, we are in a period of flux: digital banking channels and innovative approaches to banking services will be in demand alongside traditional channels (branches, phone banking, mail). Banks must work harder to provide a seamless omnichannel experience, to educate consumers, and to improve digital banking.
Trust and loyalty
Banks no longer have a monopoly on trust in financial services. Consumer confidence in tech companies exceeds their trust in banks, even with respect to the provision of banking services.
Trust is often regarded as one of the most important assets of traditional banks in the battle to retain customers, and a key advantage over challengers from non-banking backgrounds, be they ‘Big Tech’, crypto exchanges, telcos or e-commerce firms.
Our research shows that there is a generally high level of consumer trust in banks with only 20% of respondents stating that a lack of trust is among the factors that worries them most when using financial services. But interestingly there is not much difference in the levels of trust accorded to banks with physical branches versus digital-only banks.
To explore this issue, we asked respondents if the level of trust they had in various entities – such as banks with branches, digital-only banks, tech companies and insurers – had changed in the last two years. The responses indicate that trust has generally risen or remained unchanged for most of these entities, with trust rising most strongly for banks and tech companies.
However, our results reveal a slightly stronger increase in trust in digital banks without branches – 56% of respondents say their trust has increased – versus banks with branches (52%). A physical ‘bricks and mortar’ footprint accordingly does not seem to be a major differentiator when it comes to engendering increased trust between banks and their customers.
Interestingly, an even larger percentage of respondents (57%) say their trust in tech companies has increased. Furthermore, when asked directly whether they would trust a ‘Big Tech’ firm as much as a bank to fulfil their banking services, around two thirds (67%) of respondents answered that they would trust the ‘Big Tech’ firm more. A further quarter (24%) said their trust level would be the same.
The survey also reveals a clear willingness to switch banks if the right offer comes along with 44% saying they are likely (26%) or extremely likely (18%) to switch banks in the next 12 months. This is despite a high level of satisfaction with banks, with 93% of respondents saying they are satisfied with their current primary bank – including 59% who are ‘highly satisfied’.
Answering an open-ended question about the driving force behind wanting to switch, many respondents mention the pursuit of better offers, improved customer service, greater ease of use, and the need for a wider range of convenient features and services.
It is worth noting that two processes traditionally regarded as barriers to opening a new account – account applications and onboarding – are both perceived as having become smoother. For example, 79% of our respondents say they find onboarding to be either easy or extremely easy compared to two years ago.
Implications:
Whilst our survey data shows a reasonable level of trust and satisfaction in traditional banks and the services they offer, it also shows that there is an equal or greater level of trust in digital-only banks and potential ‘Big Tech’ market entrants. Our findings are somewhat encouraging for challenger banks, but also perhaps concerning for traditional banks that can no longer claim a monopoly on trust. While customers’ positive sentiment on switching is unlikely to translate directly into switching rates, it seems that a high degree of trust and satisfaction with incumbents will not stop customers from considering their banking services options. Banks need to monitor carefully the ‘push’ and ‘pull’ factors that drive customers to change providers, including the ease of the onboarding process and ‘pull’ factors such as new personalized services, range of services, and competitive offers (such as cashback offers and loyalty programs).
Key factors when choosing banking services
Price is not the most important factor. Consumers want a wide range of accessible services and many are willing to pay for value-added features.
When choosing a bank, consumers say they want a wide range of services (47%) and more accessible services (47%). More competitive pricing comes further down the list (35%), alongside positive customer reviews (32%) and highly personalized products and services (32%).
Chart 6
What would convince you to use a specific bank or financial institution?
(Multiple selections permitted)
More accessible services
Wide range of services
Trust in the company
More competitive pricing
Highly personalized products
Positive customer reviews
Terms & conditions
47%
47%
37%
35%
32%
32%
27%
There is also a willingness to pay for a premium service. Almost one in three respondents (30%) say they would definitely do this, and another 39% would consider it, while just 5% said they would ‘definitely’ not be interested. But what constitutes a value-added service in the eyes of KSA consumers?
When we asked which value-added features respondents consider when selecting a new bank account or card, by far the most popular proved to be cashback options (selected by 46% of respondents). The next most popular answers are the ability to use points against purchases (34%), and monthly offers such as retail discounts (32%). Consumers are more interested in features that save them money than lifestyle-related features.
Chart 7
Which value-added features do you consider when selecting a new card or bank account?
(Multiple selections permitted)
Cashback options
Ability to use points against purchases
Monthly offers e.g. retail discounts
Discount on travel (e.g. flights)
Airline/hotel points
Discounts on accommodation (e.g. hotels)
Discount/offers on food delivery services
Ability to book travel or accommodation services within banking apps
Access to exclusive venues/lounges
Early access to events
46%
34%
32%
27%
26%
24%
22%
21%
19%
18%
Implications:
Convenience and selective value-added features are increasingly key drivers when selecting a bank account or new card, more so than cost or pricing. At the same time, with barriers to switching banks easing, industry players must continue to develop their offerings, including loyalty and cashback features, to draw in customers and unlock customer advocacy.
The one-stop shop
Consumers no longer want their financial services in separate silos and are attracted by the convenience of a more integrated approach.
There is a clear appetite among customers for building a more convenient and holistic view of their entire financial profile. Nine in ten (86%) respondents say they would be attracted by an app that provided better visibility of their financial products such as bank accounts, insurance, pensions and investments, all in one place. Indeed, half (47%) our respondents would find this ‘extremely attractive’, although this is the case for fewer (39%) of the youngest age group (18-24 years) – possibly because they have fewer financial products to manage.
Chart 8.1
How attractive would you find an app that provided better visibility of all your financial products in one place?
47%
Extremely attractive
39%
Attractive
12%
Neutral/indifferent
1%
Slightly unattractive
0%
Not attractive at all
In a similar vein, the vast majority of consumers (82%) would be attracted by an app that brings together financial and selected non-financial services – for example, a banking app that also offers ride-hailing or e-commerce.
Chart 8.2
How attractive would you find a banking app that integrates financial and non-financial services?
41%
Extremely attractive
41%
Attractive
15%
Neutral/indifferent
2%
Slightly unattractive
1%
Not attractive at all
The creation of apps to help consumers to fulfil multiple daily tasks alongside the provision of financial services is already happening in parts of the world, most notably the Asia-Pacific region, where ‘super apps’ have developed banking services beyond their original e-commerce and social media remits.
More rarely, banks in the region have considered forming their own super apps to deliver food, travel and other services. The Bangkok-based Robinhood super app is one example: it was set up by a long-established banking group as a food delivery app during the Covid-19 lockdowns and has expanded into a range of services including shopping and travel.9
For the consumer, convenience is king. Banks will need to deliver increasingly integrated services in a way that remains seamless and easy to use for the customer.
Implications:
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, and for those banks and fintechs best able to take advantage of open banking trends in KSA and the wider Middle East. Ambitions should not be limited to providing more convenient access to financial services, however. The retail bank of the future needs to become more embedded in daily life. Bank strategies around super apps – partnering with super apps, for example – are one approach, but arrive with significant implications. Mobile-first super apps could become the primary tool that consumers use to interact with financial services providers – creating a ‘winner-takes-all’ scenario in terms of who owns the customer relationship.
Another approach is to focus on providing embedded services such as financing and insurance at the point of purchase, including BNPL. Banks that offer embedded finance and services, however, need to do more than make functional API services available. Instead, they will need to develop strategies around how to group and layer APIs so that they can best support specific consumer journeys (such as buying airline tickets and other items). As an enabler of consumer experiences, the bank of the future will need new and differentiated value propositions that seamlessly integrate the bank’s core financial offerings with lifestyle-specific services, without obliging the user to switch apps.
Personalization
The idea of tailoring banking services and products more closely to customers’ needs and lifestyles has been an increasingly visible trend in financial services. KSA’s retail banking consumers are warm to the concept and willing to share the necessary personal data.
The vast majority (84%) of respondents would be attracted by an app that provides personalized insights into their finances, with nearly half (44%) saying they find this ‘extremely attractive’. Some fintechs and banks are already offering this kind of service across limited dimensions and consumers seem keen to see the provision improve and expand.
Similarly, consumers would be happy to get advice from their banks that crosses product areas. This might include, for example, receiving insurance offers based on travel purchases or savings advice based on the balance in their current account.
Chart 9
How attractive would you find an app that provides personalized insights into your finances and how to improve them?
(e.g. by analyzing spending, saving, investing etc.)
Extremely attractive
Attractive
Neutral/indifferent
Slightly unattractive
Not attractive
at all
44%
40%
14%
1%
1%
Chart 10
How happy would you be to receive advice from your bank that crosses product areas?
(e.g. advice on savings given the cash amount in a current account, or insurance based on travel purchases)
Very happy
Happy
Indifferent
Unhappy
Very unhappy
35%
46%
17%
3%
0%
Hyper-personalizing financial services might mean that financial service providers need access to personal data beyond the customer data they already hold. For example, service providers might want to use geolocation data or social media data to understand a customer’s whereabouts, activities and life goals and thus improve the targeting, timing and tailoring of offers.
Fortunately, there is a clear willingness to share such data. Two-thirds (67%) of respondents would ‘probably’ or ‘definitely’ be prepared to share personal data such as social media profiles to unlock more personalized services. This rises to 80% in the case of 25-34 year olds, who are markedly more enthusiastic than other age groups.
Chart 11
Would you be happy to share more personal data* to unlock personalized products and services?
* Such as social media profiles or wearables data
Yes, definitely
Yes, probably
I’m not sure
I don’t think so
No, definitely not
33%
34%
21%
9%
3%
Furthermore, those that are happy to share data are willing to do this from a wide range of sources. These include their payments history (41% of respondents), location data (40%), social media data (35%), data obtained from wearable technology (35%) or a health test (35%), and web browsing history (30%).
Chart 12
What types of personal data would you be willing to share to unlock personalized products/services?
(Multiple selections permitted)
(Base: Those ‘probably’ or ‘definitely’ happy to share personal data)
Payments history
Location services
(e.g. where you have been/travelled)
Sharing social media profiles
Wearing a smart watch or another wireless wearable technology
Having a fitness or health test
Life events
(e.g. marriage, child births, home purchase, holidays)
Other bank accounts
Web browsing history
None of the above
41%
40%
35%
35%
35%
34%
31%
30%
3%
A respondent’s age makes a significant difference to the types of data they are happiest to share. For example, fewer young adults aged 18-24 are willing to share social media data (29%) versus 45-54 year olds (42%). On the other hand, the younger age group are more inclined to share wearables data (48%) than the older group (23%).
We can see from the above chart that there is also an appetite for sharing account information from other banks (31%). Accessing account and other financial data with the customer’s permission is central to the concept of open banking, through which banks, fintechs and other third parties will be able to use shared data to offer new and improved services such as better budgeting apps and cashflow management tools.
The Saudi Central Bank released its Open Banking Framework in November 2022 with regulatory guidelines, technical standards and legislation "based on international best practices” to help banks and fintechs to provide open banking services.10 The Central Bank also launched an Open Banking Lab in April 2023 to accelerate the development of new products and services.
Implications:
Competition between incumbent banks and fintech challengers is often cited as a likely fixture of the future banking market but there is also an opportunity for the two to cooperate. In a digital open banking ecosystem, the leaders will be those that develop an offering that combines data assets with the service and delivery platforms offered by fintechs. Success will be dependent on consistent and long-term investment in data management technologies.
Greater use of AI
Artificial intelligence will play an ever-increasing role in the financial services of the future, however, banks must balance the efficiencies that AI offers with the need to comply with regulatory guardrails and consumer demands for continued human contact.
Two of the most important issues will be fast-emerging regulatory frameworks and the degree of consumer openness to the technology. Our research shows there is a very high comfort level with AI among Saudi banking consumers.
When asked, 68% say they are comfortable (39%) or extremely comfortable (29%) to be guided by AI in their day-to-day financial decisions. Only 10% are slightly (8%) or extremely (2%) discomfited by the idea. The answers were similar across age groups, although 25-34 year olds and 55-64 year olds are the most relaxed about the concept.
Chart 13
How comfortable are you with AI guiding your day-to-day financial decisions?
29%
Extremely comfortable
39%
Comfortable
22%
Neutral/indifferent
8%
Slightly uncomfortable
2%
Extremely uncomfortable
Answering a separate question, 41% of those respondents who say they want a better online experience went on to name AI as one of the features they would most like to be used to improve their online experience. Respondents were permitted to select multiple options when answering this question, and a similar number (37%) selected AI-driven personal finance recommendations as a feature they would like to see.
AI-driven recommendations typically relate to budgeting and financing tips, however, banks are also increasingly using AI technology in their wealth management and investment offerings.
The sophistication and user-friendliness of today’s chatbots vary significantly, as does the degree to which they employ the latest AI technologies, and this is reflected in our survey findings.
While more than half (57%) of our respondents say they are satisfied with the use of the present generation of chatbots as a customer service channel, a fifth (21%) report that they feel dissatisfied with their chatbot experience. For comparison, a much higher percentage of respondents say they feel satisfied when speaking to someone over the phone (81%) or at a branch (82%).
There are also regulatory developments to note. In September 2023, the SDAIA published its AI Ethics Framework for entities, including banks, that may develop, deploy or implement AI. The Framework includes a risk typology associated with the use of AI – divided into four categories from little to no risk, to unacceptable risk – and insists that risk management be “directly interlinked” to AI initiatives.11
Implications:
Most Saudi consumers say they are comfortable to use AI to help them make financial decisions, and their relative enthusiasm represents a significant opportunity for banks starting to innovate with the latest AI-driven approaches. However, while the majority are satisfied when engaging with customer services using today’s chatbot technology, there is still a preference for interacting with staff. The latest AI technologies could begin to change this in terms of providing more personalized support, addressing a far wider range of customer questions, and anticipating customers’ issues or situations. However, banks will have to proceed with caution when deploying AI technologies in the frontline, both in terms of preserving the presently high level of consumer trust and in considering where and how to retain an element of human contact – while also considering emerging regulatory requirements and restrictions.
Technology and the online experience
There is room for improvement when it comes to consumers’ online banking experience and banks will have to invest in technology to achieve this upgrade.
When asked if they wanted a better online banking experience, 83% of respondents answered affirmatively and just 5% say they are entirely satisfied with their current service.
When it comes to the use of technology to improve the experience, it is not just AI that consumers want to see applied. Customers want to see real-time/instant assistance using chatbots or co-browsing services (40%) and biometrics such as face ID and fingerprint logins to ease access, improve security and reduce fraud (39%).
Consumers want to able to do more using their online or digital banking service, including the ability to open accounts and apply for financing products online (48% of respondents) and access to financial advisors for customized advice (41%) in areas such as investment.
Similarly, when asked to rank the features they would like to see on their banking app, there was an appetite for a range of insights into spending and saving habits, identifying insurance protection gaps, optimizing investment choices, money saving tips and opportunities, and more personalized products – with the last two proving particularly popular. But it was the ability to have digital access to all of these services that ranked highest.
Answering a separate question, nearly three-quarters of our respondents (72%) told us that the ability to trade crypto through their bank in the future would be of interest, with around a third of respondents (33%) saying this would be ‘very interesting’. Between July 2022 and June 2023, there was a 12% increase in crypto transactions in KSA, more than anywhere else in the world.12
Chart 14
If your current or future bank offered the ability to trade crypto, would this be of interest?
33%
Very interesting
39%
Interesting
20%
Neutral
6%
Not interesting
2%
Not at all interesting
However, there has been a more cautious regulatory approach in Saudi Arabia in comparison to other states in the region. In September 2023, Ayman Alsayari, governor of the Saudi Central Bank, called for more coordinated rules around the crypto market. “We need good supervision, regulation and coordination of cryptocurrency activities,” he said. “We support the work and relevant roadmap of the IMF and the Financial Stability Board to address risks related to cryptocurrencies.13”
Implications:
The online experience needs to be improved and technology will be critical to achieving this. Our research shows there is an appetite for AI-driven features and personal financial recommendations, biometric security, and real-time assistance, potentially supplied through virtual assistants and digital avatars. However, to deploy these cutting-edge front-end technologies, banks will have to invest in their underlying infrastructure. It will not be possible to design the digital bank of the future on the back of a years-old legacy system. Instead, banks must renew and adapt their core banking systems and invest in their data management capabilities.
The Saudi market is evolving – and banks must keep pace. Consumers are exposed to digital innovation outside the banking market and expect the same level of innovation from their banks as they receive from other service providers.
This evolving landscape will increasingly demand the adoption of analytics and AI at scale, and the rapid deployment of new technologies – such as generative AI – which offer innovative solutions to transforming traditional banking processes. Virtual and augmented reality technologies also hold significant promise for shaping the future of financial services.
The future is not just about competition but also collaboration. Banks should embrace open banking and build alliances with fintechs, e-commerce firms and other service providers to create innovative products and services, and the comprehensive offerings that consumers demand.
To achieve these next-generation ambitions, banks must prepare to invest in their own technology, people and processes in three key areas:
Lifestyle-oriented, mobile-first banking
KSA consumers are highly mobile-oriented and banks must wrap their banking services around their customers’ digitally-enabled lifestyles. This will mean providing all the tailored, end-to-end mobile services that customers desire within an easy-to-use solution. The aim should be to service the customer while they are ‘on the go’. This might include embedding services such as Buy Now Pay Later and insurance services, where desired, or using geolocation and other data to make timely offers of relevant financial products and services. Loyalty schemes also need to be embedded in financial services in a seamless manner to ease the redemption of rewards. Over time, banks should also look to integrate services such as wealth management and insurance on a one-stop mobile platform to provide all the services of a branch, together with a more holistic approach to solving longer-term customer goals.
Next-generation data management and AI-enabled services
To achieve a personalized service that is also easy to use, banks need a 360-degree-view of their customers. This will enable them to offer relevant products and services at specific times, in line with the customer’s life milestones and circumstances, but it requires investment in data architecture, data management and data analytics. Key considerations include:
Releasing data trapped in product/functional siloes through the modernization of core legacy platforms, to integrate the customer journey across technology systems and service processes.
Building enterprise-wide and cross-functional capabilities, data assets and advanced data science models that can be leveraged across channels, products and services – e.g. in terms of creating a single view of the customer, behavioral analytics, and analyzing transactional data.
Transforming legacy systems and connectivity
Putting rapid new customer-facing technologies to work will mean progressively replacing legacy and core systems with flexible and agile architectures more suited to service innovation and real-time responses. Banks will also need to move swiftly to rationalize, standardize and automate their underlying systems and processes to achieve efficiencies, improve speed of response, and optimize their cost base.
The consumer must be at the heart of these digital banking initiatives. There is more choice in today’s market and it is increasingly easy to switch banking providers, especially in the digital world. More deeply personalized, value-adding, data-driven services allied with seamless customer experiences are the keys to success – and these will need to be launched from a suitable bank environment.
Authors
Naim Alame
Managing Partner
Capco Middle East
Rob Jameson
Middle East and APAC Content Lead
Capco
To further explore the key report findings and their implications, please reach out to:
Contributors
Paul Sommerin
Partner and Digital and Technology Lead
Capco APAC
Kushal Dhammi
Managing Principal
Capco Middle East
Nadir Basma
Principal Consultant
Capco Middle East
Methodology
To explore consumer attitudes to banking in Saudi Arabia, Capco ran two surveys: a principal survey (1229 respondents) focused on customer attitudes, and a supplementary survey (500 respondents) focused on the market penetration of digital-first banking services providers. The surveys, which ran between July and December 2023, applied selected country representative quotas to collect responses from five cities: Riyadh, Jeddah, Dammam, Mecca, and Khoubar.
Participants in our core attitudinal survey were screened to ensure that they had a bank account and a minimum monthly household income; temporary residents were excluded. The attitudinal survey included KSA citizens (70%) and long-term expatriate residents (30%); the supplementary survey included KSA citizens (75%) and long-term expatriate residents (25%).
References
Vision 2030. Link
Public Investment Fund (PIF). Strategic Sectors We Are Investing In. Link
Saudi Women Rising Up in Business in Line with Vision 2030, World Bank feature story, March 2020. Link
Saudi Census 2022. Link
Saudi Arabia Leads MENA Region in Number of Millionaires, Arab News, August 2023. Link
Open Data Portal, Saudi Central Bank. Link
Personal Data Protection Law, SDAIA, April 2023. Link
Saudi Arabia’s STC Pay Gains Digital Banking License, Reuters, June 2021. Link
The Role of Super Apps in Shaping the Bank of the Future, Capco, January 2023. Link
Saudi Central Bank Launches Open Banking Lab, Saudi Central Bank, April 2023. Link
SDAIA, AI Ethics Principles, Version 1.0, September 2023. Link
Salim Essaid, Saudia Arabia Fastest Growing Crypto Economy Globally Amid Regional Drive, AL-Monitor, September 2023. Link
SAMA Chief Warns Against Dangers of Crypto Currencies, Saudi Gazette, October 2023. Link
About Capco
Capco, a Wipro company, is a global technology and management consultancy focused in the financial services industry. Capco operates at the intersection of business and technology by combining innovative thinking with unrivalled industry knowledge to fast-track digital initiatives for banking and payments, capital markets, wealth and asset management, insurance, and the energy sector. Capco’s cutting-edge ingenuity is brought to life through its award-winning Be Yourself At Work culture and diverse talent. To learn more, visit www.capco.com or follow us on Facebook, YouTube, LinkedIn and Instagram.
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