Market Insights Financial Wealth Management

Digital Investment - Saudi Arabia

Saudi Arabia

The Digital Investment market in Saudi Arabia is projected to achieve a total transaction value of SAR US$4,697.00m by the year 2024.
This represents an impressive annual growth rate of 7.52% (CAGR 2024-2027), resulting in a projected total amount of SAR US$5,839.00m by the year 2027.
Within this market segment, Robo-Advisors are expected to dominate with a projected total transaction value of SAR US$3,737.00m by 2024.
It is worth noting that United States leads in terms of the highest cumulated transaction value, which is expected to reach SAR US$1,782,000.00m by 2024.
Saudi Arabia has seen a surge in digital investment, driven by the government's Vision 2030 initiative and the growing interest from local investors.

Key regions: United Arab Emirates, Switzerland, Singapore, United Kingdom, Europe

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Analyst Opinion

The Digital Investment market in Saudi Arabia is experiencing significant growth and development due to various factors.

Customer preferences: Customers in Saudi Arabia are increasingly turning to digital investment platforms for their investment needs. This shift in preference can be attributed to several factors. Firstly, digital investment platforms offer convenience and accessibility, allowing customers to manage their investments anytime and anywhere. This is particularly appealing to the tech-savvy younger generation who are comfortable with using digital tools. Secondly, digital investment platforms often provide a wider range of investment options, allowing customers to diversify their portfolios and potentially achieve higher returns. Lastly, the transparency and real-time updates provided by digital investment platforms give customers greater control and visibility over their investments.

Trends in the market: One of the key trends in the digital investment market in Saudi Arabia is the rise of robo-advisors. These automated investment platforms use algorithms and artificial intelligence to provide personalized investment advice and manage portfolios on behalf of customers. Robo-advisors are gaining popularity due to their low fees, ease of use, and ability to provide unbiased investment recommendations. This trend is driven by the increasing demand for financial advice and the desire for cost-effective investment solutions. Another trend in the market is the integration of Islamic finance principles into digital investment platforms. Islamic finance is an important aspect of the financial industry in Saudi Arabia, and digital investment platforms are adapting to cater to the needs of Muslim investors. These platforms offer Sharia-compliant investment options, ensuring that investments adhere to Islamic principles such as avoiding interest and investing in ethical industries. This trend reflects the unique cultural and religious preferences of the Saudi Arabian market.

Local special circumstances: Saudi Arabia has a young and tech-savvy population, with a high smartphone penetration rate. This makes the country an ideal market for digital investment platforms. Additionally, the government has been actively promoting the growth of the fintech industry, including digital investment platforms, through initiatives such as the Saudi Vision 2030 and the establishment of regulatory sandboxes. These initiatives have created a favorable environment for the development and adoption of digital investment platforms in the country.

Underlying macroeconomic factors: The Saudi Arabian economy is undergoing a transformation as the government seeks to diversify away from oil dependence. This economic diversification is driving investment opportunities in sectors such as technology, healthcare, and renewable energy. Digital investment platforms are well-positioned to capitalize on these opportunities by providing easy access to these sectors for investors. Furthermore, the low interest rate environment in Saudi Arabia is pushing investors to seek alternative investment options, and digital investment platforms offer a viable solution. In conclusion, the Digital Investment market in Saudi Arabia is growing rapidly due to customer preferences for convenience, accessibility, and transparency. The rise of robo-advisors and the integration of Islamic finance principles are key trends in the market. The young and tech-savvy population, government support for the fintech industry, and the economic diversification efforts are the local special circumstances that are driving the growth of the digital investment market.

Methodology

Data coverage:

The data encompasses B2C enterprises. Figures are based on transaction values / revenues / assets under management and user data of relevant services and products offered within the FinTech market.

Modeling approach / Market size:

Market sizes are determined through a combined top-down and bottom-up approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use annual financial reports of key players, industry reports, third-party reports, publicly available databases, and survey results from primary research (e.g., the Statista Global Consumer Survey). In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, consumer spending, population, internet penetration, smartphone penetration, credit card penetration, and online banking penetration. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the S-curve function and exponential trend smoothing are well suited for forecasting digital products and services due to the non-linear growth of technology adoption.

Additional notes:

The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic and the Russia-Ukraine war is considered at a country-specific level.