The legal framework for the experience of FinTech in KSA!

In the last decade, the financial services sector has benefited greatly from technological development to enable a more efficient market infrastructure. Governments around the world in general, and the government of Saudi Arabia in particular, have noticed the increasing growth and huge inflation in the financial technology markets, “FinTech”, which led them to focus On financial technology as an ideal option for economic diversification and contribution to economic growth and the establishment of an integrated system for financial technology activity.

The financial technology system in the Kingdom of Saudi Arabia is highly attractive, as it allows companies to provide innovative services easily, and the infrastructure in the Kingdom enjoys integration and technical progress that allows the provision of automated services, in addition to the maturity of e-government transactions, which is the basis of the information infrastructure that will support FinTech companies to provide fast automated services. The workforce in the Kingdom is also characterized by efficiency, which contributes to attracting talent to work in FinTech companies. The solidarity of the legislative authorities also effectively supports the FinTech system, which has the effect of attracting investments to this sector.

FinTech Lab!

The FinTech Lab represents the legislative experimental environment that allows providers of FinTech products and services to test their innovative business models within specific criteria, timeframe, and regulatory requirements, and under the supervision of the Capital Market Authority. The FinTech lab receives applicants from inside and outside KSA to experiment with FinTech products and services related to securities activity with innovative business models that are ready to be tested in an experimental environment.

The Capital Market Authority aims to diversify the investment products and mechanisms available in the financial market, by supporting FinTech projects in the financial market by providing a regulatory framework that helps support FinTech innovations within KSA. So that this regulatory framework is designed to enhance and develop FinTech and enable participants to provide and test products, services, and business models related to securities activity that are commensurate with market needs within specific standards, time periods, and regulatory requirements.

Those wishing to apply for a FinTech Experience Lab must obtain a permit to provide the service or product that is based on FinTech.

FinTech experience permit!

The FinTech Experience Permit enables applicants to participate in the FinTech Lab to present and test innovative financial technology products related to securities activity on real clients within specific regulatory controls and timeframes.

The applicant for the FinTech lab obtains a permit for two years, and upon completion of the probationary period, the applicant can choose between two options: The first: implementing the exit strategy. Second: Providing the financial technology product on a larger scale, after the Authority and the applicant confirm that the permit has achieved the desired test results, that there is a plan or strategy to provide the product on a larger scale, and that the applicant is able and willing to fully comply with the Capital Market Law and its implementing regulations.

The proposed product or service to enter the FinTech Lab is required to meet the following criteria:

  • – To be a securities activity.
  • – To promote innovation in financial technology.
  • – To be in an advanced stage of development for the experiment.
  • – That the product promotes significant growth or efficiency to compete in the market.

The applicant is also required to comply with the following:

  • – To have sufficient and appropriate resources to develop the financial technology product.
  • – To have the ability and appropriateness to test the financial technology product.
  • – He shall have integrity, sufficient skill, care, and diligence.
  • – To disclose to the Authority all important events and changes in the business model.
  • – To exercise due diligence in knowing the rules and regulatory requirements related to the provision of a financial technology product.
  • – To be able to comply with all additional regulatory requirements that may be imposed by the Authority.

Actions and start working!

When the applicant fulfills all the conditions and obligations required by the Authority, the application for a financial technology trial permit is submitted through the channels available on the laboratory page on the Authority’s website. After that, the authority reviews the application and then informs the applicant of his eligibility to obtain the permit.

In the event that the application is accepted and the permit is granted, the Authority will work to determine the additional regulatory requirements that the applicant must meet. After that, the applicant is evaluated and whether he is able to meet those requirements. If he is able, the permit is granted, and then he begins to try the financial technology product.

When the applicant obtains the permit, he must fulfill the requirements to start practicing business, such as:

– Establishing a commercial entity in the Kingdom, and submitting all final incorporation documents to the Authority.

– Provide approved policies and procedures for managing conflict of interest cases.

– Fulfillment of all its obligations under the Anti-Money Laundering Law, the Anti-Terrorism Crimes and Financing Law, and the relevant bylaws and regulations.

– Fulfilling information security requirements and technology tests in accordance with the mechanism determined by the Authority.

– Providing the Authority with the final essential agreements with any external parties.


The regulatory procedures for establishing and establishing financial technology projects require a high degree of diligence and legal awareness, in order to avoid project rejection or delay in its implementation. So, based on the experience gained by the team of ALF Law Firm in the field of FinTech and the related rules and regulations, ALF has helped a number of FinTech companies to obtain a FinTech experiment permit from the Capital Market Authority.