Introducing Mobile Technology and M-Banking in Saudi Arabia

    Introducing Mobile Technology and M-Banking in Saudi Arabia

In an early article on the subject, Al-Ashban and Burney make the observation that the increase in mobile banking in countries such as a Saudi Arabia is made inevitable by the maturation of financial markets in the developing world and their increasing integration into the global economy (Al-Ashban and Burney 2001). They explain that both in Saudi Arabia and other parts of the world banks have become increasingly homogenised in order to compete in an increasingly global market. The level of competition increases at an incredibly fast rate, thus intensifying the need for banks to work to achieve ever increasing amounts of differentiation (Al-Ashban and Burney 2001: 191).

Saudi Arabia is a nation with the demographic profile to become an increasingly important consumer of mobile and internet banking solutions (Al-Ashban and Burney 2001). Naturally, in contrast to many other non-Western countries, Saudi Arabia benefits from plentiful financial resources which may be deployed for domestic investment in new technology and infrastructure (Al-Ashban and Burney 2001).

Further through its resource-rich economy, it supports a class of consumers made up of wealthy Saudis and international expats, who demand levels of financial service as sophisticated as is available in any country in the world and, of course, not all Saudis have benefited from the oil economy to such a degree, and many face financial obstacles to signing up for mobile banking (Al-Ashban and Burney 2001).
Saudi Arabia also has experienced a population boom since the growth of oil revenues from the 1970s onwards. A particular feature of the present Saudi demographic make-up as a result of this surge is that the country has an extremely young population (Cordesman 2003).

As the Governor of the Saudi Communications and Information Technology Commission reported in 2007, over 50% of the population was under the age of twenty in 2007 (Al-Suwaiyel 2007). A youthful population is likely to be a vehicle for rapidly changing national culture and cultural expectations, while an aging population is likely to hold faster to values enshrined in the past (Cf. Cordesman 2003).

A great part of the Saudi population has not only grown up in the age of globalisation, the internet and the large-scale import of Western technology, but also have opened or will open their first bank accounts in a period where remote banking is increasingly the norm (Cordesman 2003). Thus, the association of undue risk with mobile banking, and a resistance to change from branch banking may be expected to decline since younger generations will not maintain these cultural baselines (Cordesman 2003).