KPMG, a global consultancy, said that the growth of financial technology projects in the Kingdom and the Gulf countries is stimulating more mergers and acquisitions during the next stage.
She attributed this to the increasing scope of bailouts and deal restructuring, private equity interests and the booming non-performing loan market. She added that the growth of financial technology represents a fundamental reason that may drive the movement of mergers and acquisitions in the coming period, indicating that the boom of financial technologies contributed to the flexibility of digital transactions, the ease of overcoming regulatory transaction barriers, and the increase in cooperation between financial technology companies and financial institutions.
She stated that the Corona pandemic represents an additional incentive to conclude merger and acquisition deals, if economic growth continues, especially if doubtful loans continue to grow. She indicated that it is possible for financial technology companies to put pressure on the banking sector in the Kingdom; This is due to the strong desire of the young population to change the reality of the traditional banking sector.
She pointed out that the Saudi and regional banking sector has basic characteristics for making deals, so it must come out with a flood of activities stronger and more prepared for the combined basic market conditions.
Last June, the Council of Ministers approved licensing two local digital banks by converting the Saudi Digital Payments Company (STC Pay) to become a local digital bank to conduct banking business in the Kingdom, with a capital of 2.5 billion riyals (STC Bank), and an alliance of a number of companies and investors. Led by Abdul Rahman bin Saad Al Rashed and Sons Company to establish a local digital bank to conduct banking business in the Kingdom with a capital of 1.5 billion riyals (Saudi Digital Bank).