Transforming Car Financing in Saudi Arabia: An Interview with Ali Tabbalat of EmFlex

In Episode #19 of the Embedded Finance Review podcast, host Lars Markull sits down with Ali Tabbalat, founder of EmFlex, to explore how embedded finance revolutionises car purchasing in Saudi Arabia. With a background in investment banking and previous FinTech ventures in early wage access and medical financing, Ali brings valuable insights into how traditional financial services are being transformed through technology. This conversation reveals how EmFlex is turning the cumbersome, week-long car financing process into a seamless two-minute experience integrated directly into the car shopping journey.

The Journey from Investment Banking to FinTech Innovation

• Ali's career began with 7-8 years in investment banking before recognizing FinTech as the future of finance around 2013

• His first venture, Solfeh, provided early wage access in Jordan, initially as a direct-to-consumer model before pivoting to B2B2C by integrating with employer payroll systems

• Quick Claim, his second venture, focused on supply chain financing in the healthcare sector

• These experiences provided valuable lessons about integration challenges and the importance of reducing risk through strategic partnerships

How EmFlex Works: Reimagining the Car Buying Experience

• Traditional car financing in Saudi Arabia takes approximately 7 business days, with buyers unaware of which financial institution will accept their application

• EmFlex integrates financing at the beginning of the car shopping journey through open banking connections

• The platform analyzes credit risk and routes customers to appropriate financial institutions

• Pre-approved financing offers are presented within 2 minutes

• Financing terms are embedded directly into the e-commerce platform, showing down payment, monthly instalments, and interest rates alongside car details

• This approach allows buyers to make more informed decisions about what they can afford before committing to a purchase

Collaborating with Banks, Not Competing

• Unlike many FinTechs that operate as balance sheet lenders, EmFlex positions itself as an enabler for traditional banks

• "We're a complementary solution to what you're doing versus trying to take business away from you" - Ali Tabbalat

• The platform is designed to preserve the bank's control over customer relationships and risk management

• Challenges include long sales cycles (6-9 months) and banks' concerns about disintermediation

• EmFlex addresses these concerns by:

  • Not storing or analyzing customer data

  • Not managing the loan book

  • Providing technology that reduces customer acquisition costs for banks

  • Designing APIs that keep banks in control of their workflows

Why Saudi Arabia is the Strategic Focus

• Saudi Arabia represents approximately 50% of all car sales in the MENA region

• The auto financing market in Saudi is worth approximately $10 billion USD and growing at 12% CAGR

• The Saudi Central Bank (SAMA) has been proactive with regulatory frameworks:

  • Established open banking framework

  • Operating a regulatory sandbox

  • Working on open finance and open economy frameworks

• Saudi's "Vision 2030" initiative has created significant investment inflows and economic diversification

• The country has produced the region's largest FinTech (Tabby, a BNPL solution recently valued at $3.3B)

The Future of Embedded Finance in the Region

• Ali sees embedded finance as "wave two of FinTech", where consumers expect financial services within non-financial platforms

• The short-term focus remains on refining the auto financing vertical:

  • Solving inventory management challenges

  • Improving real-time access to deals

  • Deepening integration with dealership systems

• Potential future expansion could follow:

  • Geographic expansion to other MENA countries

  • Horizontal expansion to other financing verticals (real estate, equipment leasing)

• The model of connecting existing financial providers with digital platforms could be adapted to various high-ticket financing opportunities

Key Takeaways: The Embedded Finance Transformation

• Embedded finance turns financing from an afterthought into "a natural extension of the customer journey"

• Open banking frameworks are creating new opportunities for FinTech-banking collaboration

• The most successful approach is enabling traditional institutions rather than trying to replace them

• Saudi Arabia is emerging as a FinTech powerhouse in the MENA region

• The pre-approval model empowers consumers with better information earlier in their purchase journey

This conversation highlights how embedded finance fundamentally changes consumer expectations around financing big-ticket purchases. By bringing the financing decision to the beginning of the shopping journey rather than the end, companies like EmFlex are creating more transparent, efficient markets that benefit consumers and financial institutions.