Saudi Arabia invests in financial education and training

In recent years the government has sought to increase the number of nationals in the workforce through Saudiisation policies, which mandate that companies have a certain percentage of Saudi citizens in each position. However, the policy has presented significant challenges for many sectors that still rely heavily on expatriate labour.

Since 2011 the government has used the Nitaqat scheme to incentivise and penalise companies based on the number of Saudi employees. The system applies quotas for different economic sectors and effectively made some industries Saudi-only employers. Although progress has been mixed, the Kingdom’s banking sector stands out as a Saudiisation success story. When the government renewed its commitment to the Nitaqat programme in 2014 the sector already boasted a Saudiisation rate of 89.1%, according to the Saudi Arabian Monetary Authority (SAMA). Since then the country’s top-five banks have exceeded the industry average.

The Big Five

In 2019 National Commercial Bank (NCB), the Kingdom’s largest bank, reported a Saudiisation rate of 97.6%. It also posted a female employee rate of 13.5% – an area of the workforce that has been particularly dynamic in recent years as a result of Crown Prince Mohammed bin Salman bin Abdulaziz Al Saud’s liberalisation agenda. The proportion of female workers at NCB is set to continue to grow; women accounted for 20.5% of the bank’s new employees hired in 2019.

The country’s second-largest lender, Al Rajhi Bank, recorded a Saudiisation rate of 96% in 2019. Women accounted for 14.8% of the workforce that year, a 70% increase compared to 2015. Saudi citizens accounted for 93% of employees at the third-largest bank, Riyad Bank, in 2015, according to its most recent Saudiisation figures available. SABB reported a Saudiisation rate of 91% and a female employment rate of 20% in 2019, while nationals represented 94.5% of the workforce at the Kingdom’s fifth-largest lender, Samba Bank, as of 2018.

Training Up

However, the success of the Nitaqat scheme as applied to the Saudi banking sector should not be judged on quantitative terms alone. Increasing the number of nationals in high-ranking positions remains a major challenge for the industry.

Historically, banks have found it necessary to meet their training needs with their own resources, which explains the advanced in-house operations that most institutions operate today. Banque Saudi Fransi (BSF) was an early mover in this area and established the Kingdom’s first school of banking, BSF Academy. Its schemes include the Banker Associate Programme, which provides theoretical and on-the-job training for around 20 university graduates per year.

Its cohort must pass a thorough selection process involving panel interviews, cognitive reasoning tests, personality profiling and group assessments. Successful candidates, who must be Saudi nationals between the ages of 22 and 28, are organised into different segments including corporate banking, Treasury management and accounting, and work within the relevant business line from the outset.

In December 2019 BSF launched the International Banker Associate Programme in partnership with global financial education provider Fitch Learning. The 12-month initiative aims to nurture business knowledge, entrepreneurial insight and financial skills to create the future leaders of the company.

NCB has taken a similar approach to in-house training. Its Rowad Alahli Programme, aimed at “recruiting and training the Saudi leaders of tomorrow”, graduated 99 employees in 2019. Another 247 members of staff qualified from the Branches New Hire programme, which focuses on retail banking, while 36 graduated from the Alahli Technology Programme. NCB is increasingly offering online training, with 7290 employees participating in digital courses in 2019.

Al Rajhi Bank, meanwhile, placed training and upskilling at the centre of its five-year development strategy, which ends in 2020. In 2018 the lender established Al Rajhi Bank Academy, which provides a platform for in-house training in partnership with 20 educational institutes, including Harvard Business School and London Business School. The bank conducted 71,000 training days in 2019, covering a range of areas such as technology, security, management and leadership development for senior executives.

SABB, as an associate of the HSBC Group, has access to a range of courses and training opportunities around the world. Within Saudi Arabia, it operates the Tamheer programme in partnership with the Ministry of Labour and Social Development, which aims to provide work experience and training for young Saudi citizens, some of whom are later offered positions within the bank.

Samba Bank, for its part, completed the first phase of its new Human Resources Management System in 2018. That year the bank organised 13,421 training days, which were attended by a total of 4840 people.

Riyad Bank operates the Fursan Al Riyad programme for Saudi citizens who have recently earned bachelor’s or master’s degrees in business administration, finance, accounting or other related fields. Over a 12-month period successful candidates are given full-time training designed to prepare them for a career in the banking industry. The lender also works alongside other local entities such as the Saudi Industrial Development Fund to provide specialised training for members of staff. The first cohort of the Credit, Corporate and Treasury Programme organised by the two entities graduated in July 2019.

International Qualifications

Traditionally the Kingdom has sent a large number of students overseas, meaning that generations of Saudis have benefitted from skills training and education from other markets. Some programmes have proved particularly useful for the banking sector: for example, the Saudi Recruitment Programme, jointly funded by the Ministry of Finance and the World Bank, has enabled Saudi professionals from a number of sectors to gain experience in the financial sector. The initiative enables Saudis in junior and mid-level positions to undertake assignments lasting one or two years in the World Bank Group, which includes organisations such as the International Finance Corporation and the International Development Association.

As the distance-learning segment continues to expand, there are a growing number of opportunities for Saudis to undertake international qualifications without leaving the country. This became particularly important in early 2020 as travel restrictions were implemented amid the global Covid-19 pandemic.

Many international organisations also continue to maintain a physical presence in the Kingdom. For example, LEORON Institute, which emerged from Sweden’s manufacturing sector in the 1990s, has established training centres across the region, including in Jeddah and Khobar. The institute offers a range of courses, such as an advanced diploma programme for risk-based internal auditors and a certified management accountant course.

Other institutions with a physical presence in Saudi Arabia include UAE-based Delphi Star Training, which provides a number of accounting qualifications, and Informa Connect, a UK-headquartered company that offers courses in disciplines such as governance, risk management and compliance, big data analytics and data analysis from its site in Riyadh.

Government Efforts

The government has supported skills development in the financial sector since 1965, when SAMA first launched a banking training programme. However, the central bank has expanded its role in upskilling the nation’s workforce in recent years. In 2014 the Institute of Banking, a branch of SAMA, underwent a significant transformation, rebranding as the Institute of Finance and adopting a broader mandate. While the organisation had previously provided training programmes and courses to meet the sector’s needs as they arose, the Institute of Finance took a more holistic approach, enlisting the support of New Zealand firm Skills International to develop a comprehensive qualifications framework for the banking and insurance sectors. The result was a completely revised financial education system, with a new training structure and an assessment team based in Riyadh responsible for ensuring quality and integrity. In 2019 the institute’s objectives were aligned with Vision 2030 and it was renamed the Financial Academy. Its courses cover a broad range of areas including banking, insurance and capital markets, as well as a number of cross-sector disciplines. As a result of these recent developments, the Kingdom has the capacity to equip citizens with the skills required by institutions across the banking sector and is well positioned to continue to meet Saudiisation targets.