The economic landscape has been continually evolving through the centuries, and today we stand on the brink of another significant transformation. The business media sector is closely observing as international trade takes strides towards digitization.
An in-depth discussion with experts Sean Bowey, Head of Product at SAB, and Neil Shonhard, CEO of MonetaGo, sheds light on the digital advancements within Saudi Arabia’s business media sector.
Bowey points out that Saudi Arabia’s Vision 2030 is primarily focused on diversifying the economy beyond oil. This strategic vision is complemented by a transition to a digital banking environment—an essential move that will mitigate traditional trade friction, thanks to a digitally savvy young population and an emerging digital public infrastructure.
Entrepreneurship is receiving a boost in the Kingdom, bolstered by government initiatives and funds aimed at nurturing SME growth. The development of digital identities and infrastructures, such as invoice validation systems, is also playing a pivotal role. This digital framework enables banks to increase liquidity and mitigate fraud risk through direct feeds from government platforms and trusted third-party validation.
Shonhard underscores the need for more lending to the SME sector in Saudi Arabia, which is currently a meager 5%. He believes that fintech solutions like those offered by MonetaGo can foster safer financing ecosystems, amplifying trade growth and cross-border interoperability within the GCC.
Discussing the supply chain finance market, Bowey describes it as nascent but growing, with banks increasingly using corporate balance sheets to support the SME sector. However, expanding further into the SME working capital cycle presents challenges, primarily due to fraud and credit risks.
The role of emerging technologies is crucial in de-risking the financial landscape. Banks like SAB benefit from interconnected and interoperable technological infrastructures that validate transaction data to prevent fraud, not just locally but on a regional scale.
Regulatory frameworks often lag behind digital innovations, but regulators in the Middle East are generally proactive and receptive to change. Bowey believes that the adoption of MLETR-compliant legislation in Saudi Arabia could be a catalyst for the entire region, fostering its position as a trade hub.
Shonhard adds that technology implementation can lead to significant economic benefits, citing MonetaGo’s experience in India, where creating safer financing environments spurred exponential growth. Increased financing leads to more production, higher taxes, and socio-economic prosperity.
The collaboration between agile fintechs and governments is essential for advancing technology and fraud prevention industries. Partnerships like the one between Swift and MonetaGo exemplify how public-private collaborations can create global standards for fraud prevention, enhancing business and finance ecosystems.
Bowey concludes that such synergies are vital for the strategic incorporation of technological advancements, which can simplify processes in trade finance and improve services provided by banks.