Souqalmal founder on financial literacy in Saudi Arabia
There is a lack of financial literacy amongst the general public in the region, especially in Saudi Arabia, Ambareen Musa, founder of Souqalmal.com, says.
The website compares products offered by different banks in the UAE and Saudi Arabia.
However, Souqalmal is concentrating its focus on educating the general public about retail banking and personal finance, through presenting useful and expert educational content on its website, in addition to relevant calculators through which users can better understand their liabilities.
“What we’re bringing to the market is not just a comparison website, it a financial educator for the region,” Musa told AMEinfo in an interview.
“We publish around 50 articles a month and the top read articles are those explaining the basics; like how to open a bank account in Saudi Arabia,” she added.
According to Musa, this is especially true for the younger customers newly coming on board, and the women who are increasingly getting into the workforce.
“There is a whole generation of people who need basic financial guidance. The majority don’t even understand interest rates or how to calculate their monthly repayments,” she explained.
Individual vs. corporate
While individuals might need to get educated on the basics of their personal finance, companies usually tend to lack the knowledge on the intricacies of insurance.
“Most founders don’t understand the kind of insurance they need, the only know the ones that are compulsory. Insurance is not something that brings cash into your business, while finance to run your business will eventually grow it.
“Insurance is a product for when things go wrong, it is too late to get insurance when things actually go wrong, and people don’t usually thing about that,” Musa said.
The Saudi dynamics
Saudi Arabia is considered to be the largest market across the GCC. Given its large population, the country is a lucrative spot for businesses across all industries.
“Saudi Arabia is the holy grail of the GCC, it is naturally the second place anyone would want to expand into if you have managed to be successful in the UAE,” Musa said.
However, Musa noted that the kingdom is “probably one of the hardest markets to get into in the GCC… lifetime value of a customer there is much higher than the UAE, so in Saudi Arabia when a customer joins a bank they are likely to stay with them for about 25 years, while in the UAE that average would be between five to six years.”
This also presents a gap in Saudi Arabia’s banking sector, which has, until very recently, unable to connect to its tech-savvy consumers.
“In Saudi Arabia, 90 per cent of users access [Souqalmal] website through their smartphones, while that number is at 60 per cent in the UAE,” Musa said
“They’re spending millions on offline marketing, but the Return on Investment is only third of what it used to be,” she explained, emphasising on how banks struggle to catch up with the customers’ increasingly progressive behaviours.
Therefore, when Souqalmal entered the Saudi market, “there was a sign of relief from the banks,” who now have the chance to better understand their audience and reach them through new, effective channels.
Souqalmal was founded in the UAE in 2012, and expanded into Saudi Arabia last September. The website, according to its founder, has a unique strategy when it come to growth.
“We believe in in localising the business, and financial education is something you need to understand from every country. So we grow one country at a time but with very in-depth knowledge, we’ve preparing to go into Saudi Arabia nine months before the launch,” Musa said.