SAMA Governor says fintech pitches in sector’s growth

Fahad Almubarak, Saudi Central Bank’s (SAMA) governor

Saudi Central Bank’s (SAMA) Governor Fahad Almubarak said that fintech will contribute to boosting the growth of the financial sector, noting that in light of the growing demand for this type of technology, central banks play a pivotal role in supporting the economy based on these tools, to avoid many potential risks and support balanced innovation.

This comes through studying the aspects of issuing a digital model of sovereign currencies, represented by digital currencies for central banks, and conducting experiments and tests to understand technologies, policies and legislation, the governor added during his speech at the Council of Arab Central Banks and Monetary Authorities Governors’ meeting in Jeddah.

He stated that designing and issuing digital currencies for central banks must take into account the needs and specificities of each country.

They should also stem from a clear perception that considers all relevant aspects, particularly the expected effects on commercial banks, the private sector as well as individuals.

Central bank digital currencies are unlikely to be an absolute alternative to cash and electronic payment systems in many countries in the short and medium terms. It will rather play an integral role alongside other forms of traditional cash and payment systems.

The use of emerging technologies in several sectors, including the financial sector within the so-called Fourth Industrial Revolution, has resulted in a large number of innovative technology-based business models as a basis for providing new services and products or developing the quality of traditional services and reduce their costs, Almubarak noted.