Digital Only / Neo / Challenger Banks: Fintechs that operate as Digital Only / Neo / Challenger Banks are focused on providing fully digital/branchless banking solutions. The main advantage Digital Only / Neo / Challenger banks have over established banks is that they do not have legacy systems and legacy processes. They can therefore use technology to automate many of their processes and first principles thinking to provide customers with a better experience.
Customer Account Aggregator / Budgeting (Open Banking): For any customer who has investment products accounts or bank accounts, Customer Account Aggregators / Budgeting fintech solutions can help aggregate customer's financial information in one place to help users manage their money better, support customers with budgeting and also, financial planning.
Cash Management Solutions: Intelligent cash management fintechs are involved in the management of cash. For companies, this might include supporting the company's treasury functions by improving capital management work, invoice management, etc. This should not involve any regulated activities such as payments, investing or lending.
Banking API Providers (Open Banking): Fintech solutions that provide Application Programming Interfaces (APIs) create a bridge between third parties such as fintechs and banks and therefore allow the third party to interface with banks. Third parties may want to do this to access bank data to include it as part of their solution (e.g. a house buyer website providing mortgage information) or they may want to access customer information held by the bank to provide the customers with a more personalized service. Banks may want to provide a "white labeled" solution to their customers which is powered by a fintech and connected through an API.
Mobile / E-Wallet Payments: Mobile Wallets / E-Wallets allow individuals to store funds on a virtual wallet that is usually an app on a mobile device. The individuals can top up e-wallets with funds and then use the e-wallet as a type of storage or to make payments.
Payment Gateways / Payment Processors: Payment gateways / Payment Processors support online and offline retailers taking non-cash payments such as debit card and credit card payments. They provide an interface between the customer and the retailer and usually work with partner banks that process the payments. This reduces the reliance on retailers having to accept cash.
Peer to Peer Payments: Peer to peer payment solutions provide a platform that enables an individual to make a payment to another individual easier, cheaper, and faster. This could be through a distributed ledger that allows payments to be made without banks being involved in the transaction.
Money Transfer: Money transfer is related to the transfer domestically or internationally into a different currency as a currency exchange.
Insurance Operational Improvements: Fintechs operating in this area provide services to insurance companies to help them either reduce costs, increase efficiency, or increase revenue. Such fintechs may develop telematics insurance solutions that use data to develop a better understanding of the client and assess the risk of them making a claim. Other examples include customer service chatbots or the use of blockchain to automate the pay-out of claims.
Insurance Marketplace Aggregator: Insurance marketplace aggregators are involved in aggregating information on insurance products from different insurance providers into a tool that customers can use to find the best products based on their requirements.
Peer to Peer / Micro insurance / Insurtech:
- Micro Insurance / insurtech solutions enable individuals to come together to form a group and apply for insurance as a group. The insurer will insure the entire group and the cost of the premium will be divided between all individuals. This may result in lower premiums than if each individual went to the insurer directly.
- Peer to peer insurance is a product that allows a group of insureds to pool their capital, self-organize, and self-administer their own insurance.
Full Stack (Digital) Insurer: Fintechs that offer full digital insurance solutions and plans for various areas, such as health, home, car, etc. Such fintechs may use telematic solutions that use data to develop a better understanding of the client and assess the risks of them making a claim.
Equity Investment (Crowdfunding): Equity crowdfunding fintech platforms allow investors to invest a relatively small amount of money into private companies in exchange for equity in the companies. The platforms enable private companies to aggregate the funds raised from a large pool of investors.
Reward Based Crowdfunding: Reward based crowdfunding platforms enable individuals to donate relatively small amounts of money to companies or projects in return for non-equity based rewards (e.g. funding the development of a new toy in exchange for receiving one of the first toys that are produced). This is often compared to e-commerce as it can be used by companies to forward sell new products and use the funds to develop the products.
Credit Scoring: Credit scoring fintech solutions either speed up the credit scoring process, provide a more accurate credit score through the use of alternative data (e.g. social media data) or provide consumers with the ability to access their credit score and undertake activities to improve it.
Payment Management: Payment management solutions are a broad area related to the automation of payment activities that may have previously had to be carried out manually. This could include automating regular monthly payments (e.g. a regular bill) or paying a large number of individuals at the same time.
Robo Investors (Robo-advisory): Fintech solutions applying robo advisory are focused on automated, algorithm-driven investment in capital markets with little to no human intervention.
Capital Markets Advisory Activities: Fintech solutions that provide advice or recommendations related to capital market products and solutions.
Social Trading / Advisory Models: Social Trading / Advisory Models are where investors can observe the investment behavior of peers and follow their investment strategies or provide peer to peer recommendations/advice for investments..
Investment Brokering: Investment brokering fintech solutions use technology or new business models to make it easier, cheaper, or faster for investors to purchase securities. Examples include mobile apps that allow investors to purchase stocks quickly or tools that gamify stock market investment. The fintech solutions may provide access to individuals that previously were not able to invest in the stock market.
Customer Risk Management: Fintech solutions that support financial institutions to better manage their customer risks in areas such as fraud monitoring and credit risk. They may use tools such as machine learning to more accurately identify potential fraud or predict when a customer is likely to become a credit risk.
KYC: Know Your Customer (KYC) fintech solutions support financial institutions to speed up or improve the process of customer onboarding. This could include automating parts of the process, using alternative methods to collect customer information, or using alternative data sources to verify the customer's identity.
Legal Tech: Solutions that help businesses manage their legal operations including binding digital signatures, maintaining the chain of custody for the documents, providing audit trails for financial documents, etc.
Cybersecurity: Cybersecurity solutions are involved in protecting the client's IT systems against cyber hacking, data breaches, etc. Examples include anti-virus software, monitoring cyberattack incidents, and tools that identify suspicious communication.
Data Management and Data Analytics: Any Fintech activity that helps regulated financial institutions in organizing and maintaining data processes including managing data access, quality, integration, etc.
RegTech: Regtech solutions enable regulated financial companies to comply with regulations locally and internationally. Examples include solutions that help financial companies to automate their responses to regulators or services that keep up to date on the latest regulation changes and requirements.
Loan Processing: Loan processing fintech solutions speed up and reduce the cost of loan processing and monitoring. This could be through using technology to automate the loan process, create better data structures to manage the information required for the loan application, or using transactional data combined with machine learning to predict when a borrower is likely to go into default before they do.
Business Operations Tools / Business Tools: Solutions that aim to reduce business costs, increase automation, and enhance process efficiencies. This includes, but is not limited to, solutions to improve customer engagement, accounting, equity management, Investment operations, etc.
Banking Marketplace Aggregator: Banking Marketplace Aggregator Fintech solutions that aggregate publicly available information from different sources (e.g. savings products available from banks) to enable customers to compare the different products and assist them to make a decision.
Payment Infrastructure: Fintechs developing payment infrastructure solutions are involved in making the existing processing of payments faster, cheaper, and easier. They usually work with existing payment processors to help improve their solutions.
Capital Market Exchange/trading Market: Fintechs operating in this area develop exchanges to enable the trading of assets such as stocks, sukuks, and real estate.
Capital Market Operations: Fintechs operating in this area use technology to improve the efficiency of capital market operations. Examples include tools that automate part of the listing process or tools that enable trades to be executed faster.
Banking Operational Improvements / Back-office Bank Operations: Fintechs operating in this area provide services to banks to help them either reduce costs, increase efficiency, or increase revenue. Examples include chatbots that may help improve customer service or software that helps automate back-office functions.
Research Providers / Aggregation of Publicly Available Financial Information: Factual research in financial services ranges from providing education on an area of financial services or providing research reports to support investors make better decisions. In general, fintech platforms that focus on aggregating or analyzing publically available information and making it easier for consumers to compare and access.
SupTech: Suptech solutions enable regulators to better supervise and monitor companies that they are regulating. Suptech solutions could help regulators to automate parts of the authorization processes, speed up the responses to requests from financial companies or use machine learning to identify non-compliance.
Debt Securitization / Offering and Investment in Debt Instruments /
The use of Distributed Ledger Technology (DLT) to Arrange and Offer of Securities and Custody Services:
- Debt Securitization covers the trading or the issuance of debt by corporates or government agencies. Fintech solutions operating in this area look to improve the way the debt is traded or issued. This could include areas such as fractionalized bonds or secondary markets for private debt.
- Offering and Investment in Debt Instruments is a platform for offering and investment in debt instruments which enables SMEs to obtain the required funding by arranging the offering of Sukuk to finance projects, and offering them to the collective investors registered in the platform.
- The use of Distributed Ledger Technology (DLT) to Arrange and Offer of Securities and Custody Services is a platform that uses Distributed Ledger Technology (DLT) to arrange the offering of securities (Sukuk as a preliminary stage) to investors, in coordination with the Issuer and the Authorized Person (AP) assigned by the Issuer as an Offering Advisor.
Cryptocurrency Trading: Platforms that provide users the ability to buy, sell, or trade cryptocurrency.
Initial Coin Offerings / Cryptocurrency Development: Solutions that provide third parties the ability to issue their own coin or issuers of coins.
Buy Now Pay Later for Individuals: Buy Now Pay Later (BNPL) for individuals Fintech solutions allow individuals to make purchases on credit and pay for them in the future in several installments, and it is often interest-free.
Buy Now Pay Later for Businesses/Enterprises: Buy Now Pay Later (BNPL) for enterprises fintech solutions for businesses that allow businesses to make purchases on credit and pay for them in future in several installments, and it is often interest-free.
SME Microfinance: Microfinance for SMEs platforms provide financial/banking services to SMEs and micro/macro companies that are generally excluded from traditional banking channels due to their market size or high market risk tolerance.
Consumers Microfinance: Consumers Microfinance platforms provide financial/banking services to unemployed or low-income individuals or groups who have no other access to traditional financial/banking services.
Debt-based Crowdfunding / Crowdlending /P2P Lending for SMEs: Debt-based crowdfunding / Crowdlending /P2P lending for SMEs fintech platforms that enable lenders to provide loans to SMEs borrowers directly and to invest a relatively small amount of money into SMEs to receive back with interest. The platforms enable SMEs to aggregate the funds raised from a large pool of investors.
Debt-based Crowdfunding / Crowdlending /P2P Lending for Individuals: Debt-based crowdfunding / Crowdlending /P2P lending for Individuals fintech platforms that enable lenders to provide loans to individual borrowers directly and to invest a relatively small amount of money to receive it back with interest. The platforms enable the borrowers to aggregate the funds raised from a large pool of investors.
Finance Support Activities: Finance support activities platforms provide support or complement finance activities in order to achieve competition in accordance with SAMA instructions and ensure the delivery of high-quality financial services. These activities include finance debt collection, finance aggregator services, and any other activity approved by SAMA.
Investment Funds and Real Estate Distribution platform / Real Estate Crowdfunding: Investment Funds and Real Estate Distribution platform / Real Estate Crowdfunding platforms are the crowd-investing models in real estate investment, and it seeks to achieve feasible returns by investing in real estate opportunities.
Personal Management: Personal Management platforms helps the customers to overcome thier financial needs, goals. For example support them in budgeting, personal expenses or any other personal financial challenges.
Security Tokenization / Security Token-based: Security tokenization / Security token-based platforms include the Issuing and offering of the "Security token" using (DLT) to digitize securities business. The activities are limited to securities that represent the features of traditional securities stipulated in Article 2 of the Capital Market Law (CMA), including shares of transferable and tradable companies as well as investment units issued by investment funds and other types of securities.
Digital Assets (Initiation): Digital assets (Initiation) solutions create and initiate the digital assets that do not have a physical presence, security tokens as an example.
Digital Assets (Trading): Digital assets (Trading) solutions exercise trading in the digital assets that do not have a physical presence, security tokens as an example.
Escrow Account Activities: Escrow Account solutions provide temporary funds held in an escrow account until the fulfillment of specific conditions or transactions.
Invoice / Dynamic Discounting Activities/ Reverse factoring: Invoice factoring/ Dynamic Discounting Activities / Reverse factoring solutions provide invoice factoring solutions where the fintech company pays the company that requires the funds and cashflow upfront with a less fund (discount margin) and then the fintech company recovers the full amount from the Large Enterprise/SMEs/investor (buyer) who pays the invoice. The fintech solution does not charge interest but instead receives a margin between the amount provided to the customer and the amount recovered from the invoice.
Funding Future Revenues: Funding Future Revenues provide funding to a company that has long-term revenues and then recoups the amount provided through future revenues. The Fintech solution that is providing this business model does not charge interest but instead provides funding equal to future revenues (less a margin) upfront based on the fintech solution estimation and then recoups the full amount from future revenues.
Open Finance: Open Finance solutions use customer financial data shared through APIs to provide a personalized, real-time, or automated financial service to the customer.
Closed loop/Looped Payment Cards: Closed loop/Looped Payment Cards solutions provide limited use in terms of the store (store-specific) and customer. Common examples of Closed loop/Looped Payment Cards solutions are school canteen credit cards and gift cards. These cards typically offer customers benefits such as discounts and loyalty program points that can be redeemed on future purchases within the platform ecosystem, and the cash amount added to the closed loop cannot be cashed out.
Marketplace Bank (Retail): A marketplace bank aggregates financial and non-financial solutions that maybe of interest to their customers (individuals) into one platform for their customers to be able to access and use.
Marketplace Bank (MSME): A marketplace bank aggregates financial and non-financial solutions that maybe of interest to their customers (micro, small, and medium-sized enterprises) into one platform for their customers to be able to access and use.
Banking as a Service (Baas): Banking as a Service fintech solutions involve non-banking solutions partnering with banks to provide banking activities that complement their core services. For example a car dealership may partner with a bank to offer car finance options to create a seamless embedded experience for customers.
Agent Banking ( Cash-in/Cash-out): Agent banking solutions engage with a bank's customers and provide them with one or more banking services on behalf of the bank. A bank will often outsource particular banking activities to a third party that becomes an agent bank.
Digital Micro Saving Solutions: Fintech micro saving tools support individuals to save more. Example business models include tools that round up payments made with the difference being put into a savings account.
Digital Savings Association/Collective/Pool: Digital savings collective / pool solutions enable a group of individuals to contribute funds regularly and allows one member of the group to withdraw funds at each contribution stage.
Usage-based Insurance: Usage-based insurance solutions provide insurance based on the level of activity. For example a usage-based car insurance policy may provide insurance based on number of miles driven.
Parametric-Based Insurance: Parametric-Based insurance solutions automatically pay out a fixed amount based on a specific event occuring. For example, a travel insurance solution may use parametric-based solution to payout a fixed amount if a flight has been delayed or cancelled.
On-Demand Insurance: On-demand insurance products can be switched off and switched on as required. For example an on-demand travel insurance could be switched on when travelling and switched off when not travelling. This means a consumer will only pay for the period when the policy has been switched on.
Digital Insurance Brokers or Agent: Digital insurance broker or agent use technology or new business models to help consumers find the right insurance policies. The solution may involve collecting information from the consumer and then providing recommendations on the best insurance policy that meets their requirements.
Robo Retirement/Pension Planning: Robo Retirement / Pension planning solutions provide automated, algorithm driven investment decisions specifically related to retirement and pension planning.
Risk Analytics: Risk analytics solutions use technology to identify, quantify and evaluate risks.
Market Monitoring: Market monitoring solutions collect and analyse multiple data points from different sources on a particular area such as cyber attacks or fraud to provide an aggregate view that can be used by companies and regulators to make decisions.