Digital Technologies in the Saudi Financial Market: Comprehensive Analysis of

Digital technologies encompass a set of tools, platforms, and systems that primarily rely on processing and exchanging data through digital rather than traditional means. In the Saudi context, the concept of digital technologies has expanded to include artificial intelligence, cloud computing, big data, the Internet of Things, e-commerce, financial technologies (FinTech), cybersecurity, and more. Digital technologies are a strategic enabling factor within Vision 2030, as the Kingdom aims to transition to a diversified investment economy based on knowledge and innovation. Relying on these technologies leads to the development of vital sectors such as manufacturing, transportation, financial services, and financial markets. Digital technologies contribute to enhancing operational efficiency, reducing costs, maximizing transparency in financial transactions, and facilitating access to financial services for a wide range of society. For example, digitizing government services has accelerated procedures and improved the quality of services provided to citizens and investors. The proliferation of digital wallets and electronic payment systems has enabled individuals and businesses to conduct financial transactions easily and securely. The Kingdom is considered one of the leading countries in the region in building advanced digital infrastructure, enabling it to attract substantial investments in data centers and cloud computing. Saudi telecommunications companies are developing 5G networks, opening the door to advanced applications in artificial intelligence and the Internet of Things. Ultimately, digital technologies have become a fundamental driver of economic growth and sustainability, contributing to enhancing the competitiveness of the Saudi market at both regional and global levels.

Saudi Arabia has established a comprehensive national strategy for digital transformation, overseen by the Ministry of Communications and Information Technology and the Digital Government Authority, aiming to achieve a qualitative leap across all sectors by 2030. This strategy focuses on developing advanced information infrastructure, launching electronic payment systems, enhancing entrepreneurship in technology, and raising the level of digital government services. These efforts aim to increase the rate of digital transformation in both government and private sectors, and significantly boost the contribution of the digital economy to GDP by 2030. The government has launched several initiatives such as the National Transformation Program, innovation programs, and government support for startups in advanced technologies. Within this vision, local and international companies are encouraged to invest in sectors such as artificial intelligence, big data, cloud computing, and digital application development, with tax incentives and regulatory facilitation to attract foreign investments. The strategy also focuses on qualifying national cadres through specialized training programs in programming, cybersecurity, and data analysis. This is evident in initiatives like the Technical Innovation Support Fund, funding for artificial intelligence projects, and collaboration with major global technology companies to build local data centers. Through these efforts, Saudi Arabia aims to transform into a leading regional hub for digital technology, achieving a competitive advantage that makes it an attractive destination for investments and technology companies, thereby enhancing its economic and political standing regionally and internationally.

The digital technologies sector in Saudi Arabia has witnessed unprecedented investment momentum during 2024 and 2025, with government investments playing a pivotal role in driving digitization. The Saudi Public Investment Fund (PIF) announced the adoption of artificial intelligence and automation as a vital part of its operations, with plans to launch a $40 billion investment fund to support AI projects. This initiative reflects a serious commitment to a digital future and provides a fertile environment for the growth of startups specializing in modern technologies. On the private side, global companies such as Amazon (AWS) announced a $5.3 billion investment to build cloud computing data centers by 2026, while Microsoft entered into a strategic partnership to establish data centers providing Azure services in the Kingdom. These investments enhance Saudi Arabia's position as a regional hub for cloud computing and digital analytics, increasing the competitiveness of local companies in the global market. Initiatives from industrial development funds and innovation support programs offer low-interest loans and financing programs for startups in AI and financial technologies. Additionally, the government has allocated substantial budgets for training national cadres and developing technical education programs. These joint investments between the public and private sectors reflect the Kingdom's commitment to achieving comprehensive digital transformation and provide vast opportunities for growth and innovation, positively impacting the national economy and enhancing the attraction of foreign and local investments.

Recent economic indicators reflect the accelerating pace of digital transformation in the Kingdom, with official data for 2024 and 2025 showing significant growth in several aspects. The smartphone penetration rate in Saudi Arabia exceeded 90% of the population, while fixed and mobile internet penetration reached record levels, providing a solid foundation for the launch of digital services. Estimates for 2022 indicate that the size of e-commerce in Saudi Arabia exceeded $11 billion annually, while digital financial services contributed more than 2% to GDP, with expectations of doubling these rates by the end of 2025. On the other hand, the initial public offerings sector has seen notable activity, as in the case of Rasan Information Technology, whose stock price exceeded 37 SAR at the close in May 2024, supported by strong investor demand. Telecommunications companies like STC have achieved growth in data service revenues, accounting for more than 30% of total revenues in 2024. Additionally, the government announced advanced support programs for startups in artificial intelligence, providing loans on favorable terms through the Industrial Development Fund. These indicators reflect the momentum and investments in the digital sector, confirming the Kingdom's rapid adoption of the latest technologies, with expectations of continued growth amid government initiatives and international partnerships.

The Saudi financial market includes several prominent companies that have a direct or indirect connection to digital technologies, particularly telecommunications and financial technology companies. Saudi Telecom Company (STC) – Trading Symbol 7010 – is a leader in this field, having benefited from the expansion of 5G networks and cloud computing services, leading to its stock price growth from around 110 SAR at the beginning of 2024 to over 130 SAR by the end of the year, with a market capitalization exceeding 230 billion SAR. The company's price-to-earnings ratio is approximately 25-30 times, and it distributed annual dividends estimated at 4-5% of the stock price. Elm Company – Symbol 4282 – provides technical solutions for government and the private sector, achieving stock price growth to over 30 SAR in 2024, with a market capitalization estimated at 10-12 billion SAR, and a price-to-earnings ratio of 25 times. In contrast, traditional companies like Hail Cement (Symbol 3001) rely less on digitization, with a stock price of around 40 SAR in 2024, and a market capitalization of about 5-6 billion SAR, with a price-to-earnings ratio of 7-10 times and a dividend yield of 5-6%. These comparisons illustrate the gap between digital and traditional companies, as digitization provides clear competitive advantages in terms of growth and market value. Additionally, government incentives and reduced regulatory fees for small and medium-sized technology companies have contributed to increased interest in the stocks of emerging tech companies, reflecting the importance of digitization in supporting market and economic growth.

The telecommunications sector and digital infrastructure represent the backbone of digital transformation in Saudi Arabia. Companies like STC, Mobily (Symbol 7030), and Zain Saudi Arabia are leading efforts to develop 5G networks and expand high-speed internet services. These companies compete to provide advanced services such as cloud computing, data centers, and smart city connectivity. STC announced massive investments in 5G networks, with strategic partnerships with global companies like Cisco, Huawei, and Nokia, to enhance its technological capabilities and improve service quality. On the other hand, global companies like Amazon (AWS) and Microsoft (Azure) have entered the Saudi market by building local data centers, enhancing the competitiveness of local companies and raising standards of security and reliability. The sector faces challenges related to securing infrastructure against cyberattacks and ensuring service continuity amid the rapidly growing demand. Additionally, developing qualified human resources to keep pace with modern technologies requires continuous investments in training and education. Despite these challenges, the sector offers tremendous opportunities for expansion, especially with the government's aim to make Saudi Arabia a regional hub for cloud computing and big data. These efforts are reflected in the financial performance of companies, as STC recorded over 30% growth in data service revenues in 2024, reflecting the positive impact of investment in digital infrastructure on company profitability and market growth.

Cloud computing and big data have become fundamental pillars of digital transformation in the Saudi financial market. With global companies like Amazon (AWS) announcing investments of over $5.3 billion to build three data centers in the Kingdom by 2026, Saudi companies and institutions can store their data and run their applications locally according to the highest security standards. Microsoft and Oracle have also entered the race to build advanced cloud infrastructure, providing diverse options for local companies. These investments enable startups and small and medium-sized enterprises to access advanced technological resources at lower costs, enhancing their ability to innovate and expand. Additionally, big data enables companies to analyze vast amounts of information to derive accurate marketing and financial insights, improving investment decision-making. In the financial sector, banks and FinTech companies use big data analytics technologies to provide tailored services to customers and detect financial fraud in real-time. Some Saudi banks have reported over 20% growth in digital banking transactions in 2024 due to the adoption of big data technologies. On the regulatory side, the government is working to update legislative frameworks to protect data and ensure privacy, enhancing investor and company confidence in the digital environment. Overall, cloud computing and big data are central to achieving sustainability and competitiveness in the Saudi digital economy.

The artificial intelligence (AI) and Internet of Things (IoT) sectors are witnessing rapid development in the Saudi market, driven by government support and massive investments. In May 2025, the Kingdom launched the "Humain" company under the Public Investment Fund, aimed at developing advanced AI technologies in Arabic, reflecting Saudi Arabia's ambition to become a global center in this field. Major oil companies like Aramco are using AI to improve production processes and predictive maintenance, while banks and FinTech companies rely on machine learning to analyze data and detect financial fraud in real-time. In terms of the Internet of Things, smart devices and sensors are being employed to monitor factories, manage transportation networks, and enhance energy efficiency in smart cities. Saudi Electricity Company announced plans to invest in smart grids in collaboration with global companies, paving the way for improved energy distribution efficiency and reduced operational costs. Telecommunications companies are also developing integrated IoT platforms that support industrial, commercial, and governmental applications. These initiatives align with the digital transformation in vital sectors, opening wide horizons for innovation and increased productivity. As the government continues to allocate support programs for startups in artificial intelligence, the sector is expected to witness accelerated growth in the coming years, becoming one of the pillars of the Saudi digital economy.

The digital financial services (FinTech) sector has emerged as a key driver of innovation in the Saudi financial market, with the expansion of electronic payment platforms, digital wallets, and digital banks. In recent years, many startups such as Tamara (for deferred payments) and Mada (for mobile payments) have entered the market, alongside traditional banks expanding their offerings of advanced digital services. Major banks like Saudi French Bank have launched new electronic banking platforms, with expectations of over 20% growth in digital banking transactions in 2024. The Capital Market Authority has announced regulatory steps to embrace digital innovation and facilitate FinTech companies' access to operating licenses. Global companies like Visa, MasterCard, and Stripe have entered the Saudi market through partnerships and licenses, enhancing the sector's competitiveness and raising the level of services provided to customers. Meanwhile, the government is working to develop legislative frameworks to protect data and ensure cybersecurity, with plans to experiment with central bank digital currencies (CBDC) in collaboration with the central bank. These developments have allowed individuals and companies to access diverse, fast, and secure financial services, contributing to expanding financial inclusion and enhancing investor confidence in the digital environment. With ongoing innovation and government support, the FinTech sector is expected to become one of the most important tributaries of the digital economy in the Kingdom in the coming years.

Cybersecurity and data protection represent a central challenge amid the rapid digital transformation in the Kingdom. With increasing reliance on digital services and the expansion of cloud computing, companies and institutions are exposed to rising risks of cyberattacks. The Saudi government has responded to this challenge by establishing the National Cybersecurity Authority and adopting advanced regulatory frameworks to protect digital information. The Capital Market Authority and listed companies are also required to implement strict cybersecurity policies and regularly update their systems to confront modern threats. On the corporate side, major institutions like STC and banking companies have invested in developing advanced security platforms in collaboration with global companies like Cisco and Huawei. These investments provide advanced systems for monitoring breaches, analyzing data, and protecting digital infrastructure. In this context, the government has launched training programs to qualify national cadres in cybersecurity, aiming to bridge the skills gap and ensure sustainable digital protection. Laws are also being developed to protect personal data and ensure user privacy, enhancing trust in the Saudi digital environment. Despite increasing challenges, the Kingdom continues to invest in security technologies, ensuring the continuity of digital operations and protecting the interests of investors and companies in the digital age.

The digital technologies sector in Saudi Arabia is characterized by a diversity of players and varying levels of competition among local and global companies. Locally, major telecommunications companies like STC, Mobily, and Zain lead the digital infrastructure scene, alongside government technology companies like Elm and state-supported business incubators. In the cloud computing sector, these companies compete with global service providers like Amazon (AWS), Microsoft (Azure), and Oracle, who have invested in building local data centers. In the FinTech sector, local startups like Tamara and Mada stand out, alongside traditional banks that have entered the digital race. Globally, Saudi Arabia competes with massive companies in artificial intelligence (Google, Oracle, OpenAI) and seeks to attract investments from companies like Visa and Stripe in digital payments. Companies like Huawei and Cisco also play a pivotal role in developing communication networks and cybersecurity. Local companies face challenges in keeping pace with global innovation, prompting the state to offer tax and regulatory incentives to attract talents and investments. At the regional level, Saudi Arabia competes with Gulf countries like the UAE and Qatar to attract tech companies and build regional data centers. Overall, this diversity of players reflects an active competitive environment that drives innovation and service development, creating new growth opportunities in the Saudi digital market.

The years 2024 and 2025 witnessed a series of major developments in the digital technologies sector in the Kingdom. One of the most notable events was the launch of the "Humain" artificial intelligence company under the supervision of the Public Investment Fund, aimed at developing advanced AI technologies in Arabic, enhancing Saudi Arabia's ambition to become a global center in this field. In the cloud computing sector, Amazon (AWS) announced the commencement of plans to build three data centers with an investment exceeding $5.3 billion, while Microsoft entered into a partnership with the Saudi government to establish data centers providing Azure services. The sector also saw major acquisition deals, such as Aramco Digital announcing negotiations to invest $1 billion in the American company Mavenir, which specializes in telecommunications network software. In the gaming sector, Saudi Arabia announced acquiring a stake of up to 15% in EA Games, as part of its strategy to transform the Kingdom into a global gaming industry hub. The Saudi Financial Market Authority also launched consultations to regulate cryptocurrencies and blockchain technologies, with plans to develop digital payment platforms and link electronic wallets. These developments reflect the continued momentum towards digitization and confirm the Kingdom's commitment to accelerating digital transformation through international partnerships, massive investments, and regulatory updates that support the digital business environment.

Despite rapid progress and significant government incentives, the digital technologies sector in Saudi Arabia faces several fundamental challenges. Among the most prominent challenges is the lack of specialized technical personnel, as the demand for digital skills still exceeds supply, despite the launch of extensive training programs. Startups also face difficulties in accessing sustainable funding, especially in the early stages of growth, necessitating enhanced government support mechanisms and streamlined regulatory procedures. In terms of infrastructure, the digital transformation process requires massive investments in network upgrades and advanced data centers, while ensuring service continuity amid rapidly growing demand. Cybersecurity represents an increasing challenge, as institutions face sophisticated cyberattacks that require innovative solutions and continuous investments in protection systems. Additionally, some traditional sectors like oil and legacy banking lag in adopting digital transformation, limiting the spread of digitization across different sectors. At the regional and international levels, competition with advanced tech hubs in Gulf countries and around the world necessitates that the Kingdom offer competitive advantages to attract global companies and talents. Despite these challenges, the Saudi government continues to support the sector through financial and regulatory incentives, training and education programs, to ensure overcoming obstacles and achieving digital transformation goals.

Future forecasts indicate continued rapid growth in the Saudi digital technologies sector in the coming years. The government aims to increase the contribution of the digital economy to GDP to between 15-20% by 2030, through developing digital infrastructure and expanding the use of artificial intelligence, big data, and cloud computing technologies. The AI sector is expected to witness accelerated growth with the launch of national projects like the "Humain" company and the expansion of innovation and training programs in universities and research centers. More startups are expected to enter the financial market through the "Tadawul Namaa" platform, enhancing sector diversity and providing new opportunities for investors. On the regulatory front, the Capital Market Authority and the central bank are expected to finalize advanced regulatory frameworks for digital financial services and cryptocurrencies, providing a safer and more attractive environment for investments. International partnerships with global companies like AWS and Microsoft will continue to enhance the Kingdom's position as a regional hub for cloud computing and digital analytics. With ongoing government support and technical education programs, digital technologies are expected to contribute to increased productivity, improved quality of life, and enhanced economic competitiveness for the Kingdom at both regional and global levels.