DUBAI: While smart technologies unleash opportunities in investment and trade, concerted efforts must seek to bridge the “AI divide” in developing countries, a World Economic Forum panel heard on Thursday.

Deemah Al-Yahya, secretary-general of the Digital Cooperation Organization, said the need for energy, computing power and talent to activate AI would expand the digital gap in the developing world.

“An AI-generated image consumes more energy than charging your smartphone. That’s going to cause a great challenge for developed countries, so let alone developing countries that do not even have reliable energy.”

She added: “Another factor is who is going to get access to the computing power, considering the supply chain and cost? How can talents access the computer power to produce algorithms, local content and innovation?”

According to UN figures, 2.7 billion people do not have access to the Internet, with AI growth threatening to widen the digital gap.

However, using trading digital assets can increase access to new technologies, including AI, quantum computing and blockchain, in the global south, Al-Yahya said.

Highlighting the varying degrees of advancement of digital infrastructures among countries, Al-Yahya stressed harmonizing collaboration and bridge communication between the public and private sector, which served as the drivers of the digital economy.

One of the Digital Cooperation Organization’s mandates is to harmonize policies and regulations among 16 member states from Asia, Europe, Africa and the Middle East to expand technology use and grow their digital economy.

Addressing the benefits of AI in improving efficiency and reducing errors, Thani Ahmed Al-Zeyoudi, UAE minister of state for foreign trade, highlighted synergies and links to different tech systems, even within the same country.

“Many of those technologies are under deployment, but in various scattered ways. Each stakeholder is following their own way when it comes to customers, procedures and managements system,” said Al-Zeyoudi, highlighting the role of governments in implementing regulations that put AI to good use and ensure communication across stakeholders.

He addressed the UAE’s export of technologies to Africa, noting that the private sector took the lead in such initiatives.

“To avoid fragmentation as governments, we need to take the lead by putting (in place) a regulatory system that ensures that the private sector has the freedom to start doing their job, get the funding whenever required, and support them in talking to the right stakeholders,” he said.

RIYADH: Saudi Arabia’s local digital bank Derayah Financial Co. plans to go public on the Tadawul’s main market by offering 20 percent of its total share capital.

The Public Investment Fund-backed company aims to offer 49,947,039 ordinary stocks, following the Capital Market Authority’s approval on Dec. 25 for the registration and public offering of its shares through a partial sale by existing shareholders.

The move aligns with the Kingdom’s broader efforts to develop its fintech sector, which has seen substantial growth in recent years.

The Saudi Central Bank, also known as SAMA, has been working to boost the fintech ecosystem, introducing regulations and granting licenses to new fintech companies to diversify the financial landscape.

As part of the Financial Sector Development Program under Vision 2030, the Kingdom aims to increase the contribution of fintech firms to the economy, enhance financial inclusion, and encourage innovation in digital financial services.

Regulatory reforms, including sandbox environments and open banking frameworks, have made the country an attractive destination for fintech innovation and cross-border collaborations.

As of June 30, Derayah’s assets under management totaled SR15.1 billion ($4.03 billion). The company ranks among the leading independent brokers in brokerage revenues and holds the third-largest market share in the Saudi digital brokerage sector, capturing around 14 percent of the market.

The Kingdom has been witnessing an increasing number of initial public offerings on the Saudi stock exchange, driven by investor interest and the government’s push to diversify the economy.

The announcement said the proceeds from the offering will be distributed to current shareholders in proportion to their existing holdings, with the company receiving no portion of the funds.

This comes after the company appointed HSBC Saudi Arabia as the sole financial adviser, bookrunner, global coordinator, lead manager and underwriter.

Once the offering process is completed and formalities with the CMA and Tadawul are finalized, the shares will be listed and traded on the Saudi Exchange.

The offering will initially target institutional investors, with up to 10 percent of the offered shares potentially being reallocated to individual investors based on demand.

“This IPO goes beyond being a milestone for Derayah; it stands as a testament to our steadfast dedication to democratizing investment and providing all types of investors with innovative, accessible, and comprehensive wealth-building solutions,” said Taha Al-Kuwaiz, co-founder and chairman of Derayah.

Derayah reported a strong financial performance in 2023, with an operating income of SR624 million and a net profit of SR330 million, reflecting a net profit margin of around 53 percent.

The company sustained its growth momentum into the first half of 2024, with operating income surging by 63 percent year-on-year, while net profit jumped by 70 percent year-on-year to reach SR228 million.

Since 2016, Derayah has witnessed a 12-fold increase in its customer account base, reflecting its expanding market presence and growing investor confidence.

“In recent years, we have achieved exponential growth by capitalizing on favorable local, regional, and global capital markets,” Mohammed Al-Shammasi, the CEO of Derayah, said.

The company’s IPO will be available to both individual and institutional investors, including institutional investors outside the US.

The final offer price will be determined upon completion of the book-building process, which is expected to gauge investor interest and assess market demand for the shares.

Derayah played a pivotal role in enhancing the accessibility of financial services to a wide range of clients.

The company’s investment solutions and digital-first approach have positioned it as a key player in the Kingdom’s rapidly evolving financial landscape.

The listing is expected to enhance liquidity, improve corporate governance, and further diversify the Saudi capital market.