The Saudi Central Bank and Capital Market Authority unveiled a plan for transforming the Saudi financial landscape in 2021 into a "safe, state-of-the-art, FinTech ecosystem to make the Kingdom a leading international FinTech hub"[1]. Following the ambitions of Vision 2030, the landscaping of the financial sector became a top priority for diversifying the country's economy while aligning it with local values and beliefs.
What makes this transformative vision unique, however, is its creation of a cohesive framework where the Islamic faith and financial goals can thrive. The plan consists of several sub-sectors: Islamic banking, insurance, capital markets, and Waqf Islamic Fintech- an Islamic based endowment market traditionally composed of real estate and educational charity.
Islamic Banking and Insurance
Saudi's definition of banking started from within the populace, where "the unbanked population was reduced by 25%, with a 40% increase in rural banking adoption from 2018 to 2023"[3]. Some of the major factors that catalyzed this emigration include the decrease of transfer rates, increased accessibility to banking through digital payments and E-wallets, and presentation of alternative financing methods through the "buy now, pay later" (BNPL) model and debt crowdfunding. These options have not appealed to customers alone, but to companies like TC Pay and HalalaH as well.
The insurance sector has evolved to be Shari'a compliant and align with core values of the Islamic faith. Since Saudi Arabia is home to the "world's largest Islamic insurance market"[1], targeted adoption of financial aggregation has boosted the insurance industry and facilitated access to financial data. As a result, "policy issuance through aggregators has seen a substantial increase, rising from 662,000 in 2018 to 4.3 million in 2022"[4].
Capital Markets
The ongoing efforts to diversify Saudi capital markets gave rise to halal-ified bonds known as Sukuk. Sukuk are Shari'a compliant certificates issued by the Saudi Capital Capital Market Authority as part of their efforts to replace bonds with a form of ownership of assets or projects that does not entail interest. The evolution of this new form of bonds has not only helped incorporate Saudi identity and tradition into capital markets, but also pool in investments from other Muslim communities abroad with no access to Shari'a compliant markets. Tadawul, Saudi's stock exchange, offers both Bonds and Sukuk, catering to different audiences and financial institutions.
Waqf Fintech
With total Waqf assets estimated at $63 billion in 2020, including $4 billion managed by the General Authority of Awqaf (GAA), the sector represents significant untapped potential for socio-economic development. However, this promising growth is tempered by a structural challenge: a heavy concentration in real estate investments, which limits diversification and resilience[1]. This is attributed to the traditional forms of Waqf endowments which meet the condition of providing social-welfare benefits in perpetuity. Therefore, traditional Waqf has been largely embodied by real estate property, often developed into mosques or schools. However, Saudi Arabia is redefining this religious practice in a sustainable state of the art fashion.
To address this diversification issue, Saudi authorities have introduced supportive frameworks such as a regulatory sandbox that enables financial institutions and Fin-Techs alike to test their innovative products in a safe space, promoting innovation culture and establishing integrated connections in the financial services sector[1]. This creates a controlled environment for fintech startups and Islamic finance innovators to develop digital tools that modernize Waqf asset management. These include alternative investment vehicles, automated Zakat and Waqf tracking platforms, and Shari'a-compliant crowdfunding—all aimed at increasing impact and accessibility while preserving religious principles.
Unlocking Blockchain's Potential
While Saudi Arabia remains cautious about cryptocurrencies like Bitcoin, the country is actively exploring the potential of blockchain as an underlying infrastructure. "Bitcoin's extreme volatility and speculative nature undermine its viability as a reliable reserve asset, and any potential strategic utility would be minimal and primarily dictated by market fluctuations, rather than government policies"[2]. Blockchain's promise lies in its capacity to improve transparency, traceability, and efficiency in financial transactions. For the Waqf sector in particular, smart contracts and decentralized ledgers could modernize endowment management, ensuring compliance and accountability while supporting Islamic financial principles.
The cautious yet forward-thinking approach taken by Saudi authorities reflects a desire to embrace financial innovation without compromising faith-based values. Integrating blockchain, when done in alignment with Shari'a law and national priorities, could unlock new levels of trust and efficiency in both the private and public sectors.
Sources
- https://www.sama.gov.sa/ar-sa/Documents/Saudi_IF_Report_2021_Final_DIGITAL_v3.pdf
- https://carnegieendowment.org/research/2025/05/the-future-of-cryptocurrency-in-the-gulf-cooperation-council-countries?lang=en
- https://www.researchgate.net/publication/392542696_Fintech_Adoption_in_Saudi_Arabia_A_Quantitative_Analysis_of_Financial_Impacts_and_Regulatory_Challenges_within_Vision_2030
- https://maysorah.com/en/saudi-arabias-financial-landscape-the-rise-of-fintech-and-sharia-compliant-solutions/