Banks in Saudi Arabia are adopting a digital presence owing to the increase in virtual interactions and digitalization, says Saudi Central Bank (SAMA).
The premier Saudi Bank states that the Covid-19-related lockdowns and prolonged travel restrictions increased the focus on digitalization, leading to the closure of 42 bank branches in June. Between May 2020 and June this year, 137 bank branches in the kingdom shut shop.
While the data suggests that some of these branches closed after the pandemic-led restrictions were relaxed, a direct correlation could not be established.
However, looking at the increased interest in digital banking, SAMA has already licensed three such banks in the kingdom. These banks are STC and Saudi Digital Bank, which started operating last year, and the D360 Bank, which went live in February.
Apart from these digital-first banks, SAMA has approved 19 domestic fintech companies to offer various services like consumer microfinance, electronic insurance brokerage, and payment services.
A report by SAMA released a few days ago hints that the country is adopting digital-first payment as the primary mode of transactions. It further suggests that the Saudi government leads the push toward a digital economy, and the payments made by the government agencies are made electronically.
Overall, electronic transactions have shot up by 57% compared to 36% in the pre-pandemic era.
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