Data Regulations in Saudi Arabia’s Financial Sector

Introduction

As reliance on digital transactions increases, the regulatory landscape governing financial institutions in Saudi Arabia becomes more complex. The Saudi Central Bank (SAMA), the central regulatory authority for financial institutions, oversees the implementation of financial regulations to ensure stability, protect consumer interests, and foster trust in the financial sector. Privacy, security, and governance are crucial as these regulators work to protect sensitive personal and financial data. Regulatory frameworks categorise financial institutions into several key sectors:

1. Financial institutions supervised by SAMA: These entities include banks, finance organisations, and other institutions licensed by SAMA to engage in financial services under relevant laws, such as the Banking Control Law and Finance Companies Control Law.
2. Insurance organisations: Entities licensed under the Insurance Companies Control Law to conduct insurance and reinsurance activities.
3. Payment Institutions: Providers licensed by SAMA to offer payment services under the Law of Payments and Payment Services.
4. Remittance Service Providers: Financial institutions licensed by SAMA to provide remittance services.
5. Credit Bureaus: Entities licensed to collect and maintain consumer credit information, ensuring compliance with the Credit Information Law (CIL).

Financial institutions are expected to safeguard sensitive personal and financial information while complying with comprehensive regulations such as the Personal Data Protection Law (PDPL), its Implementing regulations, Consumer Protection Principles by the Saudi Central Bank (SAMA), the National Data Management Office’s Data Management and Personal Data Protection Standards (NDMO standards) and the CIL. Failure to comply with these regulations can result in significant penalties, financial losses, and reputational damage.

This blog explores the key data privacy, security, and governance obligations for financial institutions operating in Saudi Arabia, offering practical insights into compliance strategies and the role of advanced solutions in mitigating risks.

Data Privacy Obligations for Financial Institutions

1. Credit Data Classification

Credit Data, as defined by Article 24 of the PDPL, refers to personal data related to an individual’s financing activities, including their ability to obtain and repay debts and their credit history. Given the sensitivity of this information, financial institutions must implement effective data classification practices to ensure Credit Data is accurately identified and properly handled. These specific obligations include:

1. Explicit Consent: Institutions must obtain clear and explicit consent from data subjects for the collection, use, disclosure, or publication of their Credit Data.
2. Disclosure Notifications: Data subjects must be notified whenever a request to access their Credit Data is received from any entity, safeguarding their privacy and protecting their rights.

2. Consent Management

As per Article 5 of the PDPL and Articles 11 and 24 of the Implementing Regulation, the following consent obligations must be observed:

• Explicit Consent: Obtain, document, and allow withdrawal of explicit consent before processing or collecting Credit Data.
• Additional Consent: Secure separate consent for non-core purposes like marketing.
• Disclosure Notifications: Notify data subjects when their Credit Data is requested for disclosure per Article 11 of the CIL.

Securiti’s Consent Management Module simplifies consent tracking and provides real-time visibility into customer consent preferences.

3. Data Subject Rights

Financial institutions in Saudi Arabia must ensure compliance with overlapping rights provided under the PDPL, SAMA Consumer Protection Framework, and the CIL. These rights empower individuals and protect their personal and credit-related information.

a. Right to Access and Correction

• PDPL grants individuals the right to access their personal data and request corrections to incomplete, inaccurate, or outdated information.
• CIL states consumers can access their credit records and request corrections to errors upon submission of supporting documents.

b. Right to Privacy and Confidentiality

• Across all regulations, personal data must remain confidential, with clear notification for any mandatory disclosures or processing. SAMA reinforces the obligation to protect personal information from unauthorised use.
• Under the CIL, financial institutions must keep consumer credit information confidential, allowing disclosure or use only as permitted by law. Credit Data may be used for statistical purposes if consumer identities remain protected.

c. Right to Transparency and Explanation

• Institutions must inform individuals about the purpose of data collection, methods used, and data-sharing practices.
• As per SAMA, contracts and disclosures must be transparent, outlining pricing, risks, and terms.
• CIL states consumers have the right to understand the reasons for declined credit transactions.

d. Right to Grievance Redressal

• SAMA Framework highlights that customers should have access to complaint resolution mechanisms, including policies for compensation. Similarly, CIL also allows consumers to file complaints if credit record errors are not corrected or if their records are unlawfully accessed.

e. Right to Limit Processing 

• As per the PDPL, individuals can restrict processing when it is not accurate.

f. Data Portability

• As per the PDPL, data subjects can request their data in a portable format to transfer to another provider.

g. Right to Fair Treatment and Suitability

• SAMA states financial products and services must meet customers’ needs, ensuring fair and non-discriminatory treatment.

h. Additional Rights for Credit Data as per CIL and SAMA Regulations

• When first established, consumers are entitled to one free copy of their credit record.
• They can add personal comments to their credit records, reflecting their perspective on the information provided.

3.1 What your organisation can do:

• Data Rights Portals: Create platforms where data subjects can access, manage, and exercise their rights.
• Standard Operating Procedures (SOPs): Establish automated systems to handle data requests, ensuring prompt response and transparency. Document actions taken and response times for audits.
• Employee Training: Regularly educate staff on data subject rights to ensure compliance with regulatory requirements.

Securiti’s Data Subject Rights Management solution automates handling requests like access, deletion, and correction. It streamlines request tracking, identity verification, and secure data transfer, ensuring timely compliance and reducing administrative workload.

4. Storage and Retention Policy

Under Article 18 and Article 19 of the PDPL, financial institutions must implement a Storage and Retention Policy aligned with NDMO guidelines, ensuring:

• Storage Security: Protect data during disasters with secure backups and recovery measures.
• Retention Periods: Retain data only as long as necessary, based on classification, business value, and legal requirements.
• Data Disposal: Establish secure destruction methods (e.g., overwriting, secure deletion).
• Recovery actions for Accidental Loss: Define mitigation and recovery actions for accidental data loss.

Moreover, financial institutions must manage documents with clear processes, including transferring them to archival facilities as per retention policies and ensuring secure destruction using approved methods.

5. Records of Personal Data Processing Activities (ROPA)

Under Article 33 of the PDPL, SAMA Principles, and Article 4 of the CIL, financial institutions must maintain records of personal data processing activities. Key requirements include:

• Organisations cannot create a consumer credit record for the first time without the consumer's explicit consent.
• Organisations must securely maintain credit information records, ensuring they are up-to-date and accessible for the required duration.
• Organisations must create and maintain detailed records of all consumer credit information requests, ensuring transparency and traceability of data access.
• Records must be kept for the duration of processing plus five years starting from the date of completion of the personal data processing activity,  this includes documentation of communication channels with consumers.
• Provide access to records to the Competent Authority upon request.

In addition, records must include the controller’s contact details, data protection officer (DPO) information (if applicable), purposes of data processing, categories of data and data subjects, retention periods, recipients of data, international transfers (including legal basis), and security measures.

Securiti’s data mapping module helps automate, maintain, and ensure compliance with these requirements, streamlining the record-keeping process.

6. Vendors and Third Parties

To comply with the PDPL and NDMO standards, financial institutions in Saudi Arabia must implement strict controls for vendor relationships. This includes:

6.1 Contractual Requirements

• Data Security: Vendors must adhere to encryption, data residency, and real-time monitoring.
• Termination Clauses: Ensure secure data retrieval and deletion when contracts end.
• Breach Liability: Hold vendors accountable for breaches and ensure timely reporting.
• Business Continuity Plans (BCP): Require vendors to maintain and test BCPs.

6.2 Due Diligence and Security Requirements

• Contingency Plans: Have backup vendors or plans in case of primary vendor failure.
• Data Localization: Mandate data localization and field-level encryption.
• Audit Trails & Monitoring: Maintain audit logs and conduct vulnerability assessments to ensure security.
• Vendor Assessments: Regularly evaluate vendor compliance with PDPL and NDMO standards.
• Inspections: Allow regulatory inspections to verify adherence to security protocols.

Securiti’s Vendor Risk Management solution automates vendor risk assessments, enabling organisations to assess third-party privacy risks, track subcontractor engagements, and provide automated alerts, supplier assessments, and security audits for ongoing third-party risk monitoring.

7. Assessment & Audits

Financial institutions in Saudi Arabia must conduct regular Data Protection Impact Assessments (DPIAs) and audits to maintain strong data protection practices and comply with Article 36 of the PDPL.

7.1 Data Protection Impact Assessments (DPIA)

Institutions must perform a DPIA in the following cases:

• Processing sensitive data or linking data from different sources.
• Processing data on a large-scale or continuous monitoring.
• Use of new technologies or automated decision-making.
• Processing that may cause significant harm to data subjects' privacy.

The DPIA must document:

• Purpose and legal basis for processing.
• Scope and necessity of the processing.
• Impact assessments to evaluate potential risks to data subjects.
• Risk mitigation measures to minimize identified risks.

If the DPIA identifies potential harm, corrective actions must be taken, and the assessment re-conducted if necessary.

7.2 Auditing

Regular audits must be conducted to verify compliance and identify gaps in data protection. The points include:

• Audits should assess all aspects of data processing, from collection to sharing.
• Auditors must follow professional standards and report findings to regulatory authorities as required.

Securiti’s Assessment Automation simplifies DPIA and audit processes, automating risk assessments and ensuring compliance with PDPL regulations.

8. Privacy Notice

To comply with Saudi Arabia's PDPL and NDMO standards, financial institutions must implement robust Privacy Notice and Consent Management practices, ensuring:

1. Privacy Notice at Collection:
   • Provide clear, accessible notices detailing the controller’s identity, contact information, the purpose of collection, legal basis for processing, retention periods, and data subjects' rights, including withdrawal of consent.
2. Online Availability:
   • Publish a hyperlink to the privacy notice for online entities, ensuring it is accessible and available for NDMO review upon request.
3. Legal and Processing Requirements:
   • Notify data subjects within 30 days if data is collected indirectly.
   • Inform data subjects of any changes in data processing purposes before proceeding.
4. Privacy for Vulnerable Groups:
   • Implement special measures for individuals with limited legal capacity, ensuring clear communication and additional safeguards for automated processing.

Securiti’s Privacy Policy and Notice Management enables organisations to rapidly build and deploy privacy notices, automate updates, and easily manage hundreds of privacy and cookie policies and notices via a unified privacy dashboard.

9. DPO Responsibilities in Saudi Arabia

Appointing a DPO is critical for financial institutions to ensure compliance with PDPL. The DPO's key operational responsibilities include:

• Policy and Training Support: Assist in developing and implementing data protection policies and employee training.
• Compliance Monitoring: Assess and report on data processing activities for legal alignment.
• Breach Response: Guide and oversee personal data breach management.
• Regulatory Updates: Ensure adherence to new SDAIA regulations and updates.

A DPO must operate independently, with adequate resources, and without conflicts of interest, ensuring seamless integration of compliance measures with organisational processes.

Data Security Obligations for Financial Institutions

1. Identity and Access Management (IAM)

To protect sensitive data and comply with NDMO standards, financial institutions must enable:

• Role-Based Access Control (RBAC): Assign access based on roles and responsibilities.
• Centralized Monitoring: Oversee access activities across systems in real-time.
• Authentication: Use SSO and MFA for secure user access.
• Periodic Reviews: Regularly audit and update access permissions.
• De-provisioning: Automate removal of access for departing or transitioning users.

2. Multi-factor Authentication (MFA) and Privileged Access Management (PAM)

To secure critical systems and comply with NDMO guidelines and PDPL, institutions must:

• Mandatory MFA: Enforce MFA for all users and train employees on its use.
• PAM: Restrict sensitive account access and monitor activities through SOC.
• Access Workflows: Implement formal workflows for elevated access with compliance oversight.
• API Security: Use authentication, rate limiting, and monitoring for API protection.

3 .Data Encryption and Protection

Financial institutions in Saudi Arabia must implement strong encryption measures to comply with the PDPL and SAMA guidelines. Key steps include:

• Encrypt Data at Rest and in Transit: Use Advanced Encryption Standard (AES) or RSA encryption to secure personal and financial data during storage and transmission.
• Key Management: Retain exclusive control of encryption keys.
• Data Localization: Store data on on-premises servers or Saudi-based cloud storage as per regulatory requirements.
• Comprehensive Security Measures: Implement full-disk encryption, file-level encryption, and endpoint protection to prevent unauthorized access.
• Layered Security: Use a multi-layered encryption approach, combining hardware and software measures for maximum data protection.
• Regular Testing: Conduct periodic reviews and testing of encryption protocols to address evolving threats.

4. Incident Response and Breach Notifications

Financial institutions in Saudi Arabia must establish effective incident response plans to address personal data breaches, ensuring compliance with the PDPL and the Breach Notification Guidelines. These plans should operationalize the following three stages of breach management:

1. Notification to SDAIA:

• • Notify SDAIA via the National Data Governance Platform within 72 hours of a breach.
  • Include details such as:
    • Description of the breach (time, occurrence).
    • Affected data subjects and types of data involved.
    • Impact assessment and remedial actions.
    • Plans for notifying affected individuals.
    • Contact details of the controller or DPO.

2. Containment Measures:

• Secure compromised data and credentials (e.g., passwords, payment data).
• Assess and mitigate risks to data subjects.

3. Notification to Affected Individuals:

• Notify data subjects promptly if the breach affects their data, rights, or interests. Provide:
  • Breach explanation and risks.
  • Mitigation steps and prevention guidance.
  • Contact details for further assistance.

Use direct communication methods such as SMS or email, and for large breaches, consider using websites or social media. It's also important to record breach details, notifications, and remedial actions while updating procedures and enhancing security to prevent future incidents.

Securiti’s Breach Management solution automates breach notifications and compliance actions, providing incident response workflows that help organisations respond to privacy incidents promptly and effectively.

5. Security Operations and Risk Management

Based on NDMO standards financial institutions need to implement the following measures:

• Monitoring and Compliance: Continuously monitor and assess information assets using tools to detect vulnerabilities, ensure compliance, and prevent unauthorized access.
• Risk Management: Identify, evaluate, and mitigate security risks tied to personal data processing, with procedures to manage the impact of potential incidents.
• Business Continuity Plans (BCPs): Develop a framework to maintain data confidentiality, integrity, and availability during security incidents or disasters, ensuring rapid restoration of critical systems.
• Asset Inventory: Keep an updated inventory of information assets to track and protect sensitive data throughout its lifecycle.

Data Governance Obligations for Financial Institutions

Effective data governance is essential for Saudi Arabia’s financial institutions to align with the NDMO Standards and comply with SAMA’s regulatory requirements. This section outlines the key components of data governance and highlights actionable steps for implementation.

1. Governance Frameworks

As per SAMA guidelines, financial institutions must enable:

• Equitable Treatment: Ensure fair, transparent, and honest dealings, especially for vulnerable groups.
• Transparency: Provide clear, accessible information on product terms, risks, benefits, fees, and termination conditions.
• Education: Offer programs to educate customers about financial products, risks, and their rights.
• Fraud Protection: Implement systems to prevent, detect, and address fraud and misuse of customer data.
• Data Privacy: Secure personal data in compliance with the PDPL, ensuring data is used only for specified purposes.
• Complaint Handling: Resolve customer complaints promptly with clear escalation channels.
• Training and Awareness: Institutions must promote a data-centric culture through regular training on data governance, compliance, and security policies to educate employees on their role in safeguarding data.

2. Data Management and Protection Policies

Financial institutions are required to create and maintain detailed policies that address data management and personal data protection as per the NDMO standards. This involves:

1. Gap Analysis:

• Compare existing internal policies with NDMO standards.
• Identify sector-specific regulatory requirements and align them with organisational practices.

2. Policy Development:

• Draft policies tailored to the institution's operational and compliance needs.
• Ensure alignment with the National Data Management and Personal Data Protection Framework.

3. Implementation Roadmap:

• Create a 3-year implementation plan prioritizing initiatives by impact and feasibility, highlighting quick wins within the first six months​.

Securiti’s Data Governance provides a unified approach to managing data assets, ensuring compliance, security, and data quality across the organisation. It automates policies, access controls, and data lifecycle management, enabling transparent, accountable, and consistent data practices aligned with regulatory standards.

3. Organisational Structure and Roles

To operationalize governance, institutions must establish dedicated roles and structures, including:

• Data Management Office: A centralized entity responsible for implementing and overseeing governance frameworks.
• Data Governance Committee: Senior executives and subject-matter experts responsible for approving strategies and ensuring compliance.
• Key Roles: Assign responsibilities for data governance, including appointing DPOs and Data Stewards​.

Securiti’s Data Privacy Solution automates compliance with evolving global privacy regulations and principles.

4. Data Quality Plan

The NDMO standards comprehensively detail data quality standards that organisations must maintain. Data quality ensures data is accurate, complete, consistent, and reliable for its intended purpose. This includes:

• Prioritization: Rank data by importance, with master data as the highest priority. Master data is the critical, standardized information (e.g., customer, product, or supplier data) that supports consistent operations across an organisation.
• Plan and Assessment: Develop a plan with clear milestones and conduct an Initial Data Quality Assessment to identify issues, perform root cause analysis, and create remediation plans.
• Data Quality Rules: Define rules for completeness, accuracy, timeliness, and consistency, and monitor data quality regularly.
• Issue Resolution: Establish processes to address issues, including root cause analysis and corrective actions, guided by Service Level Agreements (SLAs).
• Automation: Use tools for data profiling, rule execution, and issue resolution to streamline quality management.
• Checkpoints and Metadata: Integrate quality reviews in the SDLC and publish rules and monitoring results in a Data Catalog for compliance and transparency.

Moreover, financial institutions must evaluate data quality through compliance audits, performance metrics, and lifecycle reviews. Regular audits identify and address gaps, while KPIs track data quality, resolution, and SLA compliance. Periodic policy reviews also ensure alignment with regulatory updates and emerging threats.

Securiti’s Data Quality solution enhances data accuracy by automating profiling, validation, and monitoring to ensure consistent, reliable, and compliant data across systems.

5. Data Classification Management

To comply with NDMO standards, financial institutions in Saudi Arabia must implement a Data Classification Management framework to classify, handle, and protect data based on sensitivity and regulatory requirements. This includes:

1. Data Classification Plan:

• Prioritization: Rank data by importance, with master data as the top priority.
• Plan: Develop a plan outlining activities, milestones, and resources for effective data classification.

2. Classification Controls:

• Assign security and handling controls to datasets, ensuring compliance with NCA regulations.

3. Classification Process:

• Data Identification: Create an inventory for datasets and artefacts using Data Catalog tools.
• Regular Reviews: Reassess and adjust classifications, particularly for low-impact data that may qualify as Public.

4. Performance Management:

• Track progress using KPIs, such as the percentage of datasets classified, reviewed, and approved.

5. Data Classification Artifacts:

• Maintain a Data Register documenting datasets, classification levels, assignment dates, and review logs.

Securiti’s Data Catalog organizes and classifies data across systems, enabling easy discovery, access control, and compliance. It provides automated data mapping and insights to ensure consistent governance and regulatory alignment.

Conclusion

To navigate Saudi Arabia's regulatory landscape, financial institutions must prioritize privacy, security, and governance. Leveraging advanced technologies like Securiti’s comprehensive compliance solutions can help institutions meet PDPL, Credit Information Law, NDMO Standards and SAMA requirements and foster customer trust.

Request a demo to learn more.