Saudi Vision 2030: The Role of Banks in Sustaining Saudi Arabia’s Ambitious Goals

Once a nation primarily reliant on oil, Saudi Arabia is undergoing a dramatic transformation. Vision 2030, a bold and ambitious plan, is redefining the Kingdom's future.

In 2016, Saudi Arabia embarked on an ambitious journey with Vision 2030 to diversify its economy and create a more sustainable future. Under the directive of King Salman and Crown Prince Mohammed bin Salman, this plan is reshaping the Kingdom's landscape, attracting global investment, and empowering its citizens. These grand ambitions are backed by targeted reforms and zealous projects, evaluating and upgrading every aspect of the Kingdom that influences the economy.

To achieve this, Vision 2030 aims to energize its strengths beyond oil. The Kingdom identifies three key strengths: being the heart of the Arab and Islamic worlds, an investment powerhouse, and the hub connecting three continents.

Vision 2030 is based on three themes: building “a vibrant society,” “a thriving economy,” and “an ambitious nation.” Vision 2030 acknowledges the need for a strong, equitable society to build sustainable human capital. It also highlights the economy's reliance on tourism, small and medium businesses, and fintech collaborations. Special attention is given to youth. With 63% of Saudi Arabia’s population under the age of 30, Vision 2030 focuses on education, employment readiness, and the overall advancement of youth.

Under each theme, Vision 2030 has defined targets and key performance indicators for each sector or industry that directly or indirectly impacts the theme.

The Vision is being realized in three key phases.

Phase 1: Foundations (2016–2020), Structural reforms to build a solid base for the Vision. 

Phase 2: Acceleration (2021–2025), Scaling up investments and fast-track transformation.

Phase 3: Sustainability and Growth (2026–2030), Sustain transformation impacts and leverage growth opportunities. 

Currently in its ninth year, the program is at the crux of starting its Phase 3. The 2023 annual report for Saudi Vision 2030 highlights the successful implementation of programs, areas of achieving and surpassing many of the Key Performance Indicators. 

Key Areas of Growth in KSA’s Vision 2030

In 2023, KSA significantly accelerated its goals, with 87% of Vision 2030’s 1,064 initiatives completed or on track. Of Vision 2030’s 243 key performance indicators, 197 were fully achieved, with 176 exceeding their targets.

Saudi Arabia’s non-oil revenues reached 50% of the Kingdom’s total GDP in 2023, now valued at SAR 1.7 trillion.

Saudi Arabia ranked second in growth rate among international tourists, hosting 106 million visitors in 2023.

To make a vibrant society a reality, Vision 2030 has made improvements at the grassroots level. With healthcare taking center stage, rural areas achieved 96.41% coverage, surpassing the 2023 target of 96%. In the housing sector, homeownership among citizens reached 63.74%. Over 66,000 families became homeowners, with more than 24,000 housing units launched by the end of August 2023.

On the path to a thriving economy, Saudi Arabia’s GDP in 2023 was valued at SAR 2,959 billion. With more than half of the Kingdom’s citizens under the age of 25, significant improvements have been recorded in areas such as the number of children enrolled in kindergarten and the number of scientific publications and patents filed.

Female participation in the workforce reached an all-time high of 35.5%. Women took on leadership roles in various sectors, including government, business, academia, and media.

Recognizing the importance of small and medium enterprises (SMEs) for the future of the economy, programs like the SME Bank and the “Tomoh” initiative were launched. SMEs have recorded over 200% growth since the plan’s launch. The “Tomoh” program, a community for fast-growing SMEs, contributed to the listing of 18 enterprises in the Saudi Stock Exchange parallel market “Nomu.”

Programs such as the National Transformation Program and the Public Investment Fund (PIF), established to guide economic and social development, grew its assets to SAR 2.81 trillion. Foreign direct investments (FDIs) showed notable growth, contributing 2.4% to the country’s GDP.

KSA has made great strides in building the world’s most sustainable integrated ecosystem for living and working. The Red Sea Project has promoted the development of floating coral nurseries to expand coral reefs and is on track to plant 50 million trees as part of the mangrove nursery project.

Moving into the sustainability and growth phase, the Kingdom will focus on diversifying economic resources further, advancing innovation, and establishing Saudi Arabia as a global leader in sectors like logistics, technology, and green energy.

Role of Financial Institutions in Achieving Vision 2030

Financial institutions, especially banks, in Saudi Arabia have played a pivotal role in advancing Vision 2030's goals by contributing to economic diversification, fostering innovation and growth across various sectors, and enabling greater financial inclusion.

1. Economic Diversification and Investment

Banks and financial entities have been central to the Kingdom's efforts to diversify beyond oil. Initiatives such as the Public Investment Fund (PIF), in partnership with banks, have driven investments in sectors like real estate, energy, and logistics. For instance, Saudi banks like Al-Ahli Bank are working with the Saudi Real Estate Refinance Company (SRC) to expand the mortgage market, increase homeownership, and contribute to urban development.

2. Development of the Banking Ecosystem

Banking sector assets have increased by 37% since 2019. Financial institutions have also actively embraced fintech, growing from 20 companies in 2017 to 147 in 2022, helping to establish a globally competitive financial hub.

3. Financial Inclusion and SME Growth

Financial institutions have contributed significantly to increased female participation in the labor market, raised homeownership rates, and reduced the unemployment rate from 12.8% in 2017 to 7.7%. Banks have increased lending to SMEs to foster entrepreneurship and job creation.

4. Support for Large-Scale Projects

Banks have funded mega-projects like NEOM, the Red Sea Project, and Qiddiya. Additionally, banks have expanded their wealth management services to cater to high-net-worth individuals and institutional clients, supporting the growing wealth in the Kingdom.

Banking for Sustainability and Growth: Vision 2030 Phase 3

As Saudi Arabia enters Phase 3 of Vision 2030, banks need to swiftly adapt to continue playing a key role in the country's transformative journey. Changes in consumer preferences, an ambitious fintech development program, and the rise of international participation all play crucial roles in sustaining and growing key sectors.

Banks, which are central to many of the Vision’s goals due to the nature of their business and the trust they’ve built, must now develop systems and frameworks that sustain and channel growth. Ecosystems are an effective way to achieve this, as they connect disparate resources into cohesive solutions that address the complex needs of various segments.

Many of Saudi Arabia’s citizens are experiencing significant life events for the first time. Educated and employed young adults, empowered women, first-time homeowners, thriving SMEs, and successful entrepreneurs will have unique and diverse needs. Banks can amplify their contributions to Vision 2030 goals by anticipating and curating personalized services and products for each segment, guiding them through their journey toward the next phase.

Some of the top banks in KSA are already laying the foundation for these ecosystems. Let’s explore a few key segments and the kind of support banks can provide.

Small and Medium Businesses in Saudi Arabia

Vision 2030’s goal is for small and medium enterprises (SMEs) to generate 35% of GDP by 2030. NTP’s Annual Report 2023 revealed that the number of SMEs in the Kingdom reached 1.3 million by the end of Q3 2023, with 6.7 million employees. Growing businesses need different kinds of support than those in their early stages. They must invest heavily in software, workspaces, manage rising employee numbers, and create processes—all requiring assistance and recommendations from trusted sources. Banks can take ownership of building ecosystems tailored to the needs of growing SMEs to improve efficiency and allow them to focus on growth. Saudi Arabia’s transformation depends on SME innovation and sustainable growth.

SAB has taken a step in the right direction with its corporate credit card. The card provides the bank’s business customers with discounts on services and products they may need on a daily basis.

Al Rajhi reported an 184% growth in SME accounts opened online in 2023. Providing every new account holder with a package of tools required for basic business setup would ensure they remain loyal to the bank as they grow and evolve.

High-Growth Entrepreneurs in Saudi Arabia

Saudi Arabia topped the MENA region in listing activity in terms of the number of deals in Q3 of 2024. With increasing foreign investments and ambitious growth targets, entrepreneurs will be required to make decisions faster to keep up with their growth. Banks need to anticipate the needs of these new CXOs, who face evolving lifestyle demands such as travel, dining, shopping, advisory services in finance, contracts, and advanced business tools like software, workspaces, and networking opportunities. Banks, with their experience in supporting business owners at all stages, are in the perfect position to offer entrepreneurs and their teams services and products beyond traditional banking, sustaining their growth.

HDFC Bank in India has launched a special card specifically for CXOs whose needs differ from those of regular corporate employees. The card provides exclusive access to networking events, hotel stays, quick check-ins at hotels and airports, and curated services in legal, taxation, and other areas.

In KSA, SAB has opened an exclusive airport line for select customers, allowing them to breeze through check-in, security, and immigration, saving them time and hassle.

First-Time Homeowners

Homeownership doesn’t end with buying a home—it’s just the beginning. Homeowners need to furnish, personalize, move, and plan to make their house a home. In a few years, they may want to renovate or upgrade. With improving standards of living, they might want to recalculate their loan repayment.

DBS Bank in Singapore did just that for their customers with their property marketplace.

Youth / New-to-Work Professionals

Today’s youth have a lot to keep up with when it comes to education, professional life, and starting to be independent. Ambitious goals, multiple interests, hobbies, and access to finances can make life overwhelming. Banks can launch programs to support the goals and dreams of young people through education, enablement, and loss aversion.

SNB has aimed to do this with its E-Gaming Prepaid Card. Gaming enthusiasts receive special discounts and promotions related to gaming, along with rewards on every purchase. They also have opportunities to win UEFA Champions League match tickets.

Alinma Bank’s Education Account is an ideal base to support the needs of university students. The bank can offer discounts and deals on courses, books, phones, and laptops as part of the Signature Credit Card tailored for Saudi pre-graduate university students, helping them transition smoothly into their professional lives.

Saudi Banks as Ecosystem Enablers: Fulfilling Vision 2030

With tangible results already evident, Vision 2030 is a transformative plan that leverages the Kingdom's strategic strengths to diversify its economy, empower citizens, and create a global hub for innovation and investment. Success in these ecosystems lays the foundation for long-term economic growth and diversification.

With each phase, the Vision builds on its success, laying the groundwork for a future where tradition, sustainability, and opportunity coexist harmoniously.

By creating hubs for sustainability and growth for key focus segments like SMEs, youth, women, health, and more, banks and financial institutions have the opportunity to become trusted partners in driving the Kingdom’s Vision 2030.

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