Market Trends of KSA Cash Management Services Industry
Growing Demand For Automation and Optimization of Working Capital Among Various Retailers is Expected to Drive the Market
- The most used payment method in the world remains banknotes and coins, even though there is a growing trend for cashless payments. Moreover, the major number of cash transactions occur at points of sale, where the retailers are accepting, processing, and storing the cash payments as well as the required amount for change.
- Keeping and managing cash raises the demand for working capital, and cash-handling processes might need a higher degree of effort from human resources and employees. Such factors are augmenting the growth of retail cash management globally.
- In October 2022, Abdullah Al OthaimMarkets Co. announced the launch of its strategic plan for retail business in Saudi Arabia up to 2026. The plan aims to provide multiple options for the shopper with a distinctive experience through the company's sales points, supermarkets, developed corners, wholesale, and electronic platforms. The main features of the strategic plan include providing all the shopping needs of the largest segment of customers and serving them in the best and easiest way; providing the best value along with the most suitable quality and experience; expanding in serving quantities wholesale customers, for example, catering centers, hotels, restaurants, and large families through wholesale markets.
- Moreover, order automation for cash collection, exchange delivery, and distribution within the organization augments the market's growth. In addition, cash flow visualization from cashier systems and electronic cashiers and instant deposits leveraging automated deposit machines (ADM), among other similar solutions, are being adopted by several retail businesses and organizations in the country. These are some primary factors that surge the market toward growth during the forecast period.
- Overall, such a rise in retail activity in the country is increasing the demand for automation of working capital among retailers. Automation can help streamline financial processes, manage cash flow, and optimize inventory, making it easier for retailers to handle the financial aspects of importing goods. This trend reflects the broader movement towards automation in the retail industry to improve efficiency and adapt to changing market dynamics.
Understand The Key Trends Shaping This Market
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Cash Collection and Processing Segment is Expected to Hold Significant Market Share
- Cash collection mainly refers to the activities and processes of collecting cash payments from customers for goods and services a business provides. The collection of funds is a fundamental aspect of the overall cash flow management. The cash management process includes collecting and managing cash flows within an organization. This refers to identifying how much money is coming into the business, where that money is coming from, and where that money is going in the organization.
- Significant companies are investing, merging with other businesses, and investing in new projects to increase their consumer base and better meet their demands across various applications. For instance, in August 2023, SS&C Technologies Holdings, Inc. declared that Riyad Bank, one of the significant financial institutions in the Kingdom of Saudi Arabia and the Middle East, has successfully transitioned its automation program to SS&C Blue Prism.
- The bank sought to upgrade its automation solution to support three primary business objectives: customer experience, innovation, and performance culture. So far, the bank has implemented automation across eight areas of operations, including corporate payment operations, ATM and cash management, consumer finance operations, retail operations, governance, and operational excellence.
- Among improvements, Riyad Bank benefits from intelligent automation in the end-of-day transaction handling for bank tellers. Previously, bank tellers were preparing the customers' transfer of check and cash deposit forms manually. The manual process especially meant more time and resources had to be allocated to complete these transactions by the end of the day. The automation improved working conditions for team members and enabled them to concentrate on higher-value tasks.
- Also, according to SAMA's recent monthly report, Saudi Arabia's business sector witnessed a boom across most segments in May 2023, with banks extending overdrafts, and As of quarter three of 2023, the cost to fund of banks in Saudi Arabia stood at 2.6 percen, increases teh loans, and lines of credit to companies looking to invest in their projects, purchasing capital goods, and growing operations. Such instances are anticipated to fuel the overall demand for cash collection and processing services within the region.
