IBRAHIM S. AL-SAYARI Director of the Saudi Arabian Monetary Agency (SAMA)

Being able to meet the increasingly sophisticated financial and banking needs of the rapidly-growing Saudi population has been a priority for all commercial banks in the country. With the support and supervision of SAMA, which has initiated a number of developments for improving banking technology, Saudi’s 11 commercial banks now operate on the universal model. They provide retail and corporate banking, investment advisory services, brokerage facilities, and derivative transactions as well as credit cards, cash machines and point-of- sale transactions.

In the mid 1980’s, Saudi Banks installed the first automated teller machines (ATMs), and in 1986 SAMA implemented automated clearing houses to support national cheque clearing. SAMA also instigated the introduction of advanced electronic infrastructure to facilitate transactions between bank branches and between different banks, using the SARIE and SPAN payment and settlement systems.

In October 2004, SAMA launched the ‘Sadad’ electronic bill presentment and payment (EBPP) service, allowing registered users to be paid via bank ATM and internet services. E-commerce is rapidly becoming one of the essential means for banks to sell their products and services; Saudi banks have kept up with technology and invested accordingly, meaning that today there is an extensive electronic payments network in place. Telephone and internet banking services have allowed Saudi banks to compete with international entities as well as providing more choice for customers.

More recently, some banks have begun to offer GSM cellular banking services. Given the high proportion of cell- phone users in the kingdom, this could become an important channel for banking activity in the near future.

SAMA also gives frequent security advisories to the country’s banks, which have security systems in operation as advanced as those of their U.S. or European counterparts. As the vital ingredient for customer confidence, security is the highest priority at Saudi financial institutions. The kingdom’s banks are constantly upgrading their information security systems and procedures.