February 2025

Mohammed Wassim Khayata Chief Executive Officer, Al Maryah Community Bank (Mbank)

Community Spirit Community Spirit

The Progress of Progress

Welcome to the February edition of MEA Finance, the opening issue of 2025, which starts our progression through the coming question mark shaped year.

We undoubtedly exist in a time of uncertainty but, at least from our MEA Finance perspective, we can see that progress is taking place and remains assertively on the schedule for the region’s banking markets. The application of technology in combination with an enthusiastic yet thoughtful embracing of change in the financial markets across the nations of the Middle East and Africa, is showing the world that in the realm of banking, we are primed to become world leaders. In this issue, our focus on SMEs, Retail Banking and Open Banking all highlight this state of change and forward progress.

The theme of progress is additionally underscored by our cover story this month, featuring an interview with Mohammed Wassim Khayata, Chief Executive Officer of Al Mayrah Community Bank, aka Mbank, the UAE’s first fully integrated digital “community” bank. Mbank in many ways typifies the determination to modernise, adapt and improve banking that is afoot across the region.

Egypt is embarking on their own modernisation process for this huge nation’s banking sector. This important transformation project was discussed in depth by leaders from the country’s top financial institutions, all providing valuable insights at the MEA Finance, Leaders in Banking Technology and Payments Egypt Summit, held in partnership with Swift –read from page 54.

Progress in the way that SMEs in our region are catered for is very much on the list of priorities for banks and fintechs in the region, and you can read about all the latest efforts to support them from page 14. Following, from page 26, we begin our look at the changing shape of retail banking where greater customer expectations are leading banks, with the ever present support of technology, to work harder to provide more intuitive and personalised services.

Currently, in terms of progress, nothing in banking has higher profile than open banking. Progress here is measured not only by the application of technology and AI to the sector, but also and equally importantly by progress in banking culture, trust and cooperation. It is a massive game change for the business and you can read about it from page 42.

Oscar Wendel, our Editor at Large, progressed across Europe, from the UK House of Lords to Davos, leading discussions on the intersection of technology and the design of banking to enable financial inclusion. And also in discussion are Infosys Finacle and the Chief Executive Officer of Zand Bank, conversing about their transformative journey and future strategies.

Finally, and perfectly summing up the theme of progress in this issue, our Market Focus this month is on the United Arab Emirates where continuing commitments to growth, business diversity and international trade partnerships keep its prospects as a highly performing economy firmly in positive territory, despite the uncertainties and challenges that inhabit the background.

So, whether page-by-page, from back to front or jumping randomly from article to article, however you choose to progress through this edition of MEA Finance, I am sure you will have a satisfactorily broadening experience.

Mashreq Private Banking launches EAM coverage desk; joins the ranks of global giants

Standard Chartered Global Private Bank announced the expansion of its frontline private banking team by 20% in the UAE. This move underscores the Bank’s unwavering commitment to supporting the growing demand for bespoke private banking solutions in one of the world’s most prominent financial hubs

Providing expert guidance and personalised service to external asset managers across the region, the newly launched desk propels Mashreq into the league of global financial institutions already positioned in this market, enabling the bank to meet growing demand for services from family offices and ultra-high-net-worth individuals (UHNWIs).

In response to evolving trends and customer demands across the financial spectrum, Mashreq has consistently led the way in innovation. In 2020, building on its strong foundation in wealth management, Mashreq Private Banking became one of the fist local banks in the region to introduce a dedicated family office desk. Adding the EAM coverage desk into the bank’s Private Banking division further enhances Mashreq’s ability to provide specialised services to this segment, demonstrating the regional finance giant’s commitment to supporting clients with diverse and complex financial needs.

The new EAM desk adopts Mashreq Private Banking’s service excellence approach, where each EAM – and

subsequently their clients – benefits from a dedicated team of relationship managers, customer service managers and investment specialists. Serving clients across the globe, the desk caters to the growing independent wealth sector, offering bespoke investment solutions tailored to the distinct needs of each client.

“The launch of the EAM desk at Mashreq Private Banking significantly reinforces our commitment to providing innovative and bespoke wealth management solutions. This new platform will allow us to deepen our collaboration

with external asset managers, offering their clients enhanced flexibility and access to global markets,” said Vipul Kapur, Head of Mashreq Private Banking. “With Mashreq’s expertise, digital innovations and strong regional and global presence, clients will benefit from a seamless one-stop solution for banking and sophisticated wealth management. By offering customised strategies and a unique service model, Mashreq’s EAM desk is comprehensively equipped to assist clients in achieving their financial goals with confidence.”

Navin Chokhani is appointed to lead the desk, along with his current portfolio of managing the Mashreq Private Banking value proposition.

A wide range of services available via the EAM desk, including access to multi-currency accounts, dynamic financing solutions and Lombard lending, enables clients to manage and expand their wealth efficiently. Furthermore, Mashreq’s international market offerings include investment opportunities across funds, bonds, local and global equities, structured products and local IPOs, offering clients a comprehensive toolkit for wealth optimisation.

Vipul Kapur concluded: “The launch of the new EAM desk is expected to be a game-changer for the UNHWI client segment, underscoring Mashreq’s commitment to exceptional service and solidifying our position in the competitive private banking landscape. As the financial needs of UHNWIs evolve, Mashreq’s continuous innovation – and adaptation of our offerings to provide tailor-made solutions – cement our position as a leader within the market.”

Vipul Kapur, Head of Mashreq Private Banking

ON THE GLOBAL HORIZONS

As one of the leading business banking partners in the UAE, National Bank of Fujairah takes pride in being the best Trade Finance Bank in the region to provide tailored trade finance solutions, helping our clients to grow their business on the world map. With nearly four decades of expertise, we provide innovative banking solutions using our digital platforms that are designed to complement your business and offer banking services that meet your working

Full Steam Ahead

The UAE’s continuing commitments to growth, business diversity and international trade partnerships keep its prospects as a highly performing economy firmly in positive territory, and despite possible suppression of profitability as interest rates decline, banks remain positioned for continued success in 2025

The UAE is experiencing robust economic growth, supported by a series of structural reforms, substantial capital and investment inflows and surging domestic activity. The Gulf state seeks to double its gross domestic product (GDP) to over $800 billion by the end of the decade. This year, the International Monetary Fund (IMF) projects GDP to rise to 5.1% in 2025.

“Growth momentum is strong, thanks to the authorities’ ambitious reform agenda, supported by investments to improve infrastructure and transportation, advance investments in renewables and new technologies, improve governance and increase trade,” the IMF executive board said last December.

The Emirates is actively diversifying its economy and attracting foreign investment. Non-oil GDP now accounts for more than 70 per cent of its total GDP. The country is seeking bilateral trade deals and partnerships to achieve its goals, and the authorities have the policies in place to navigate any potential disruptions to global growth.

Over the years, the UAE has implemented a series of reforms to

bolster foreign direct investment and make itself more attractive for foreigners to live and work amid growing competition in the region.

The country is at the forefront of the GCC region’s AI revolution, with its rapid adoption of transformative technology projected to contribute up to 12.4% of its GDP, which is equivalent to $96 billion (AED353 billion).

The UAE’s allure as a safe haven continues to strengthen its prospects, attracting start-ups, hedge funds, entrepreneurs and family offices to the Gulf state. The influx comes as other regions face rising geopolitical tensions and economic stagnation.

A record-breaking 6,700 millionaires relocated to the UAE in 2024, according to Henley & Partners; that’s up 70% since 2022 and solidifies the Gulf state’s position as a leading global wealth hub for the third consecutive year.

Meanwhile, banks in the UAE had a strong performance in 2024 on the back of improved margins and favourable economic conditions. However, Fitch Ratings warned that interest rate cuts between Q4 2024 and 2026 will likely hurt

GCC banks’ earnings, with UAE banks potentially hit hardest due to a faster repricing of assets compared to liabilities.

The UAE’s open economy, while enjoying robust domestic growth, faces inherent risks stemming from global uncertainty, commodity price volatility and geopolitical tensions. However, the country’s substantial sovereign buffers provide a crucial cushion against these external vulnerabilities.

An engine of sustainable growth

The UAE, one of the world’s top oil exporters, has been increasingly focused on diversifying economic sectors and revenue sources away from hydrocarbons and is seen as the GCC region’s tourism and commercial hub – strategically located at the crossroads of key global trade routes.

The country’s business-first approach to international relations is bearing fruit via growing trade partnerships. Since 2021, it has forged numerous bilateral trade, investment and cooperation agreements with several fast-growing economies as it seeks to attract $150 billion in foreign investment and bolster its position as a global trade and logistics hub.

Dr Thani bin Ahmed Al Zeyoudi, the UAE’s Minister of State for Foreign Trade, reiterated the country’s commitment to a strategic expansion of its CEPA agreements in 2025. Al Zeyoudi said in a statement to Emirates News Agency that the proactive approach seeks to enhance economic gains for the UAE and its global trading partners.

“The implementation of CEPAs has yielded positive outcomes for the UAE’s foreign trade, particularly in non-oil trade, re-export services, logistics, clean and renewable energy, technology, financial

services, green industries, advanced materials, agriculture and sustainable food systems,” he added.

To date, it has signed pacts to grow trade with several countries, such as India, Israel, Indonesia, Türkiye, Cambodia and Georgia, in pursuit of the UAE’s Projects of the 50, a series of bold initiatives driving the nation’s next phase of sustainable development.

“The UAE is actively pursuing bilateral agreements by expanding its CEPA, with recent deals including Australia, Jordan and Vietnam. We consider trade a critical growth driver with the potential to enhance investment and private-sector collaboration,” ICAEW said in its Middle East Economic Update report.

The most recent CEPA, which was finalised in December, is with the Eurasian Economic Union (EAEU). It will encompass the five members of the EAEU bloc, which is made up of Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia. The trade pact is aimed at boosting non-oil trade between the parties by lowering tariffs and removing trade obstacles.

Similarly, the UAE’s recent accession to the BRICS group signifies a pivotal step in its commitment to multilateralism and fostering meaningful international cooperation. President Sheikh Mohamed bin Zayed Al Nahyan attended the BRICS summit last October, marking the Gulf state’s inaugural participation as a full member.

Back home, the UAE is advancing progress across sectors key to its Industrial Development Strategy, including renewables and advanced technology, with key entities, such as G42 and Mubadala, providing funding.

The UAE garnered international attention in 2017 by becoming the first country worldwide to appoint a Minister of State for Artificial Intelligence, a groundbreaking move that underscored the government’s commitment to integrating AI at the highest levels of governance.

Earlier in 2024, G42 and Mubadala established MGX, an investment firm

GROWTH

MOMENTUM

IS STRONG, THANKS TO THE AUTHORITIES’ AMBITIOUS

REFORM AGENDA,

SUPPORTED

BY INVESTMENTS TO IMPROVE INFRASTRUCTURE AND TRANSPORTATION, ADVANCE INVESTMENTS IN RENEWABLES AND NEW TECHNOLOGIES, IMPROVE GOVERNANCE AND INCREASE TRADE

– the International Monetary Fund

focused on AI and semiconductor ventures. MGX aims to amass over $100 billion in assets under management in the coming years.

G42’s partnerships include one with AI developer OpenAI, creator of ChatGPT, which is teaming up with the Gulf firm as part of an expansion within the GCC region and a $1.5 billion investment by Microsoft.

Meanwhile, the UAE real estate sector has witnessed robust growth in the recent past, fueled by robust demand, economic resilience and growing interest from foreign investors. “The UAE real estate market defied global headwinds in 2024, maintaining strong momentum and robust activity across all sectors,” according to JLL’s latest UAE Market Dynamics report.

Dubai has been at the centre of this expansion, attracting a substantial portion of new real estate projects and investments. High transaction volumes and an upward trajectory underscore the market’s resilience, fuelled by strong economic fundamentals.

Fiscally fit

The UAE’s public finances are sound. Fitch Ratings upgraded the Gulf state’s already high credit rating to AA- last June, citing its moderate consolidated public debt level, strong net external asset position and high GDP per capita.

“We forecast consolidated UAE government debt at 24% of GDP at end-

2024, well below the ‘AA’ category median of 49%. It will be broadly stable in 2025 and 2026,” the ratings agency said.

The UAE, a global financial powerhouse with over $1 trillion in sovereign-wealth funds, boasts a modest federal debt of $8.5 billion. The country’s debt law, as noted by Fitch, allows the use of funds from foreign currency issuances to support infrastructure development.

The Arab world’s most competitive economy approved a balanced budget for the 2025 fiscal year last October, with a total expenditure of $19.47 billion (AED 71.5 billion).

The federal budget, which is part of the 2022-2026 multi-year financial plan, is divided among key sectors such as social development and pensions, government affairs, infrastructure and economic affairs, financial investments, and other federal expenses. The UAE Cabinet approved a $52.3 billion budget for 2024-26 in October 2023.

“Fiscal and external surpluses are expected to remain high on the back of relatively high oil prices,” according to the IMF. However, while tax policy reforms will bolster the long-term fiscal surplus, the current account surplus is projected to decrease slightly due to increased imports.

A global financial hub

The UAE, home to the Abu Dhabi Global Market (ADGM) and Dubai International Financial Centre (DIFC), has solidified

its position as a rising global financial powerhouse. Its removal from the Financial Action Task Force (FATF) grey list in February paved the way for further streamlined foreign currency transactions, reduced inter-bank fees and a boost in trade and investment opportunities.

“The UAE has taken decisive action to combat financial crime through a series of key reforms, including strengthening its legal and regulatory framework in revising existing laws and enacting new legislation to comply with the FATF standards, ensuring effective implementation of targeted financial sanctions and empowering the Financial Intelligence Unit in stepping up investigations and legal prosecutions,” said Mohamed Daoud, Industry Practice Lead, Moody’s Analytics.

While traditionally, the ultra-wealthy have favoured offshore havens like the Cayman Islands, Switzerland and the British Virgin Islands to protect their assets, the UAE has rapidly emerged as a prominent wealth hub. Abu Dhabi and Dubai are increasingly challenging traditional financial centres such as London and Hong Kong, attracting a significant number of private banks, hedge funds and family offices.

The ADGM saw a 31% jump in company registrations in Q3 2024, attracting a wave of financial institutions, including Morgan Stanley, PGIM, AXA IM and General Atlantic, with 128 fund and asset managers now operating in the financial hub, managing 156 funds.

Similarly, the DIFC is attracting a growing number of global financial institutions seeking to cater to the Middle East region’s ultra-wealthy. Assets under management within the financial hub surged by 58% year-on-year to $700 billion in H1 2024.

The UAE’s five largest banks – First Abu Dhabi Bank, Emirates NBD, Abu Dhabi Commercial Bank, Dubai Islamic Bank and Abu Dhabi Islamic Bank, reported a combined net profit of $14.03 billion (AED 51.5 billion) in the first nine months of 2024.

THE

IMPLEMENTATION OF CEPAS HAS YIELDED POSITIVE OUTCOMES FOR THE UAE’S FOREIGN TRADE, PARTICULARLY IN NON-OIL TRADE, RE-EXPORT SERVICES, LOGISTICS, CLEAN AND RENEWABLE ENERGY, TECHNOLOGY, FINANCIAL SERVICES, GREEN INDUSTRIES, ADVANCED MATERIALS, AGRICULTURE AND SUSTAINABLE FOOD SYSTEMS

While UAE banks are poised for continued success in 2025, the potential impact of interest rate cuts is twofold: narrower margins and improved asset quality.

“We anticipate a slight deterioration in profitability in 2025, as the Fed could start cutting rates in December 2024, and most GCC central banks are likely to follow suit to preserve their currency pegs,” said S&P Global Ratings credit analyst Mohamed Damak.

The UAE central bank followed the US Federal Reserve’s decision to cut interest rates by a quarter of a percentage point to 4.40% earlier in December. S&P Global’s analysis of GCC banks’ December 2023 reports, including the banks in the UAE, indicates that a 100-basis point rate decrease typically translates to a 9% decline in their bottom lines.

S&P Global’s study suggests that the recent rate cut could impact UAE banks’ profitability by approximately 2.25%.

Boosting competitiveness

The UAE introduced a 15% domestic minimum top-up tax (DMTT) for large multinational companies operating in the Emirates, effective January 1, 2025, as part of the Gulf state’s strategy to increase non-oil revenue.

The DMTT ensures that large multinational companies pay a minimum effective tax rate of 15% on their profits

generated in the UAE. It aligns the UAE with the global minimum tax framework established by the OECD/G20.

The UAE is a hub for multinationals in the Middle East, and the tax amendments come a year after the government rolled out a 9% business tax, with exemptions for free zones that power the country’s economy.

Meanwhile, the UAE has introduced sweeping reforms over the years to drive greater social, legal and economic liberalisation and attract new foreign investment. Few nations have matched the Gulf state’s success in fostering a dynamic, low-tax environment that attracts global corporations and high-net-worth individuals.

The UAE’s recent move to grant citizenship and passports to select foreigners, including investors, professionals and exceptional talents, marks a significant shift in the GCC region. The initiative aims to foster greater economic participation among the sizeable expatriate population, thereby driving economic growth.

The UAE’s commitment to structural reform remains steadfast, driven by integrated government strategies, robust governance and a focus on fostering private sector growth and green initiatives. The IMF emphasised that sustained economic growth will hinge on concerted efforts to expand CEPAs, attract foreign investment and talent and fully implement strategies related to AI, the digital economy and green strategy.

– Dr Thani bin Ahmed Al Zeyoudi, UAE’s Minister of State for Foreign Trade

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Tuning the Growth Engines

Recognising the importance of SMEs to current and future growth and economic well-being, regional governments and banks are positioning to ensure that their potential is fully met

The GCC region stands on the cusp of a profound economic reform, building on international best practices and synergising national strategies to achieve tangible results.

Saudi Arabia’s Vision 2030, Oman’s Vision 2040, the Dubai Economic Agenda D33 and the UAE’s Vision 2031 illustrate the Gulf region’s eagerness to act boldly in pursuit of economic diversification, with SMEs recognised as indispensable for a robust and enduring economy.

“To maximise the private sector’s contribution, especially from SMEs, the GCC must implement a comprehensive support program. By prioritising SME competitiveness, the region can foster grassroots economic growth and a dynamic market,” according to a World Governments Summit and KPMG report.

The Middle East boasts a thriving SME ecosystem, including numerous startups. GCC scaleups, high-growth SMEs, contribute substantially to regional GDP, ranging from 15 to 30%. The sector’s success is attributable to a confluence of factors: dedicated support initiatives, regulatory reforms and a robust financial services sector.

However, despite their critical role in economic growth and diversification, SMEs in the GCC face a significant funding gap. Lending to the sector is a mere 3%, resulting in an estimated credit shortfall of $250 billion.

While government-backed development finance institutions and banks are increasingly focusing on lending to SMEs, the sector still faces both general economic challenges and issues specific to SMEs, exacerbated by uncertainties

such as the Trump administration’s trade policies and ongoing geopolitical tensions.

“With the right support, small and medium-sized enterprises could significantly boost economic growth. Governments can help capture this opportunity,” said McKinsey & Co.

GCC governments are committed to nurturing a thriving SME and startup ecosystem, providing comprehensive support that extends beyond initial establishment. The support ranges from technical assistance to access to finance to facilitating entry into both local and international markets.

A thriving ecosystem

Globally, SMEs are the backbone of the world’s economy, comprising 90% of all firms, employing 70% of the workforce and contributing 50% to global GDP. In the GCC, SMEs constitute 90% of all businesses and contribute significantly to the economy, generating 15-30% of GDP.

GCC governments have significantly increased their recognition and support for startups and SMEs as crucial drivers of economic growth and diversification in the post-pandemic era. Saudi Arabia looks to bolster this sector’s contribution, with a target of 35% GDP share by 2030, while the UAE seeks to enhance SME influence, aiming for a 60% contribution to non-oil GDP.

“The six GCC nations are currently witnessing a golden age for startups and entrepreneurs. A confluence of geopolitical shifts, technological advancements, climate change concerns

and ambitious national agendas has created an unprecedentedly favourable environment for small businesses,” Tarek Sultan, the Vice Chairman of Agility, said in a blog post.

The SME sector serves as a cornerstone of GCC economies, driving job creation and economic expansion. Small businesses in the region maintain an optimistic outlook on their growth potential, fuelled by government support for entrepreneurs and investors. Both public and private entities across the GCC are actively implementing programs to stimulate the growth of SMEs, including startups.

“Governments and development organisations in the GCC region recognise the important role that SMEs play in promoting economic improvement, job creation and entrepreneurship and are working to support the development and growth of the SME sector,” global consulting firm Arthur D. Little said in a report.

GCC governments are increasingly adept at understanding the needs of startups and small businesses. While non-energy exports were once negligible, they are now a key focus in countries like Saudi Arabia and the UAE, with both nations actively promoting their growth.

Trade trends are working in favour of SMEs in the Gulf region. Last November, GCC states signed a free trade agreement with New Zealand worth over $1.79 billion (NZD3 billion) annually. The UK is also nearing completion of a new free trade agreement with the six-nation bloc valued at $73 billion per year.

Economists predict that the new free trade agreements, coupled with the rapid growth of Gulf e-commerce, will likely deepen economic integration among the GCC countries. “The e-commerce sector in the Middle East is poised for substantial growth. It is estimated to reach a market volume of $50 billion by 2025, driven by the widespread use of cutting-edge technologies and favourable government initiatives,” according to Deloitte.

The Abu Dhabi Department of Economic Development’s (ADDED) SME Export Matching Programme,

introduced in November 2023, has demonstrated a significant early impact, with 14 participating SMEs having already forecast a 44% surge in their exports for 2024 to reach an estimated export value of AED387 million.

Saudi Arabia’s SME sector has demonstrated remarkable resilience, overcoming obstacles in traditional industries and creating new avenues for growth. The Small and Medium Enterprises General Authority (Monsha‘at) is a significant player in the industrial SME ecosystem.

A credit lifeline

The growing economic influence of small businesses in the GCC region holds immense potential for future growth. To unlock SMEs’ full growth potential and accelerate the development of the sector, GCC states have implemented a range of scaleup programmes, but the funding gap in the region remains a major challenge.

The limited availability of formal data to assess SME creditworthiness has traditionally made banks reluctant to lend to these businesses, significantly

TO MAXIMISE THE PRIVATE SECTOR’S CONTRIBUTION, ESPECIALLY FROM SMES, THE GCC MUST IMPLEMENT A COMPREHENSIVE SUPPORT PROGRAM. BY PRIORITISING SME COMPETITIVENESS,

THE REGION CAN FOSTER

GRASSROOTS ECONOMIC GROWTH AND A DYNAMIC MARKET

– World Governments Summit & KPMG

Monsha’at’s latest report revealed a 3.1% surge in the number of SMEs operating in Saudi Arabia from 752,560 in Q1 2022 to more than 1.3 million by Q4 2023.

Unlocking an SME’s full growth potential frequently requires successful capital raising, with an IPO being a significant option. Saudi Arabia launched Nomu in 2017, a parallel market with relaxed listing requirements designed to make it easier for SMEs to access public funding, while Abu Dhabi unveiled an AED5 billion ($1.4 billion) IPO fund in 2021 to incentivise private companies, including SMEs, to list on the local exchange.

Furthermore, the Dubai Financial Markets introduced ARENA last May, a platform facilitating capital raising for private companies as an alternative to IPOs. To thrive, GCC SMEs require expanded market access, necessitating the development of a robust cross-border trading ecosystem.

hindering their access to financing.

Kearney estimates suggest that the total financing gap for SMEs across the GCC region is more than $250 billion, with SME financing by commercial banks in Saudi Arabia less than 7% of overall corporate lending.

However, the initiatives that GCC governments are implementing aim to provide SMEs with the necessary resources, support and guidance to expand their operations, enhance their competitiveness and contribute significantly to the regional economy. Similarly, development funds, banks, private equity and insurance institutions in the Gulf region are also extending support to SMEs.

Emirates Development Bank disbursed AED 980 million in loans to SMEs during the first half of 2024. Its credit guarantee scheme, implemented in collaboration with commercial banks, achieved

remarkable growth, with financing amounting to AED 343 million.

Through the credit guarantee scheme, the Emirati development lender offers partial guarantees of up to 50% to SMEs, facilitating increased access to crucial financing.

Saudi Arabia’s Small and Medium Enterprises Bank (SME Bank), a development bank under the National Development Fund, has disbursed more than $6.7 billion (SAR 25 billion) over the past four years and plans to raise the SME sector’s contribution to the GDP from 20% to 35% under to support Vision 2030.

Credit facilities for Saudi SMEs grew 22.6% year-on-year in Q3 2024, reaching SAR 329.23 billion, according to the Saudi Central Bank (SAMA). The latest data shows that 94.7% of these loans originated from Saudi banks, while finance companies provided 5.3%.

Furthermore, Qatar Development Bank (QDB) provided QAR 1.5 billion in direct financing to SMEs in 2024, a 33% increase compared to 2023, bringing the total outstanding direct financing facilities to QAR 6.4 billion.

The development bank’s volume of indirect financing facilities currently stands at approximately QR730mn, with over 1,400 SMEs benefiting from both direct and indirect financing. Its investment portfolio in Qatari startups exceeded QAR 300 million in 2024, benefitting more than 450 startups.

Meanwhile, private equity and venture capital funding in the GCC dropped by 29% in 2024 to reach $1.5 billion. However, despite the decrease, the region’s startup

ecosystem remained active. Saudi Arabia, the leading recipient of venture capital funding, saw a 44% drop, while the UAE, with $613 million raised, experienced an 8% decline.

With financing needs evolving beyond traditional financing, banks must reimagine the support they offer and the methods of delivery. The implementation of sophisticated segmentation strategies with updated value propositions is expected to enable banks to better profile and target key customer segments, while smart financing partnerships will position banks as catalysts for economic growth within their respective markets.

Building a digital ecosystem

The GCC has established itself as a premier destination for SMEs and startups, underpinned by a favourable investment environment, adaptable business regulations and a legislative framework that encourages innovation. Digitalisation and artificial intelligence (AI) are revolutionising the SME sector, driving growth through increased efficiency, expanded market reach, improved customer experience and fostering innovation.

“Digitalisation offers a range of opportunities for SMEs to improve performance, spur innovation, enhance productivity and compete on an even footing with larger firms,” according to the Organisation for Economic Co-operation and Development (OECD).

By automating repetitive tasks, streamlining operations and analysing

WITH THE RIGHT SUPPORT, SMALL AND MEDIUM-SIZED ENTERPRISES COULD SIGNIFICANTLY BOOST ECONOMIC GROWTH. GOVERNMENTS CAN HELP CAPTURE THIS OPPORTUNITY

– McKinsey & Co.

data to inform decisions, AI empowers SMEs to optimise their processes and boost productivity, which translates to cost savings, reduced waste and improved resource allocation.

Digital platforms and e-commerce enable SMEs to transcend geographical limitations, reach global markets and expand their customer base. Digital marketing tools such as social media and targeted advertising allow for cost-effective outreach to specific customer segments, while remote work and collaboration facilitate access to a broader talent pool.

With global e-commerce sales projected to reach $6.3 trillion in 2024, global logistics firm DHL said SMEs can leverage online channels to access a broader customer base and drive business expansion.

AI-powered chatbots and virtual assistants provide 24/7 customer support, personalise interactions, analyse customer data to understand preferences and predict needs, which leads to enhanced customer satisfaction, stronger relationships and increased loyalty.

“The adoption of AI in the SME sector means establishing a powerful core that links departments, integrates business processes, connects data and embeds intelligence to accelerate innovation and growth,” according to SAP.

However, challenges remain, including the digital divide, data security concerns and the need for employee upskilling. By addressing these challenges and embracing the opportunities stemming from digitalisation and AI, SMEs can thrive in the modern economy.

SMEs are crucial actors in economies and societies worldwide. Over the years, GCC states have demonstrated a growing understanding of the specific needs of startups and small businesses. The evolving support system has created an unprecedentedly favourable environment for entrepreneurship, startups and small businesses in the region.

At Mashreq Private Banking, we understand your needs, so we create unparalleled solutions tailored exclusively to suit your goals.

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Needs of the Heart

Highlighting the key role of SMEs in the economy, Prateek Vahie Chief Commercial Officer, Wio Bank describes how Wio Bank places their needs at the heart of their strategy, and discusses their role in the improving banking conditions for small businesses and start-ups

How does your bank define or categorise SMEs?

SMEs are the backbone of the UAE economy, accounting for more than 94% of businesses and playing a crucial role in employment generation and economic diversification. At Wio Bank, we take a business-needs-first approach rather than relying solely on conventional metrics like revenue or headcount.

We primarily serve micro, small and medium-sized enterprises that require agile, digital-first financial solutions to manage and scale their businesses. Our customers range from freelancers and solopreneurs to established SMEs looking for efficient banking, embedded financial tools and seamless access to capital. By focusing on their real-world operational needs, rather than applying a one-size-fits-all definition, we ensure that our products and services truly support their business growth.

Where does SME business rank in your bank’s overall business landscape?

Unlike traditional banks, where SME banking is often considered a secondary focus, SMEs are at the heart of Wio Bank’s strategy. We launched Wio Business specifically to address the financial challenges faced by SMEs, startups and entrepreneurs. This segment is not just a business vertical for us—it’s one of the primary reasons Wio was created.

Prateek Vahie, Chief Commercial Officer, Wio Bank

The UAE government has been proactively supporting SME growth, with initiatives such as the National SME Programme and the Abu Dhabi Economic Vision 2030 reinforcing the role of small businesses in driving the economy forward. At Wio, we align with this vision by eliminating barriers to banking for SMEs, embedding financial services into their daily operations and providing digital tools that help them scale efficiently. Our focus is on simplifying business banking, providing

smarter financial insights and ensuring that SMEs can access financial services as seamlessly as possible.

What initiatives do you have or are you implementing to attract SMEs to do their banking with you?

We approach SME banking differently, focusing on integrated financial solutions rather than standalone banking products. Our key initiatives include:

First, frictionless digital onboarding— we make it simple for businesses to open accounts without unnecessary paperwork. SMEs can set up their banking in minutes, rather than waiting weeks for approvals. This is a gamechanger for businesses that need to move fast.

Second, embedded finance and ecosystem partnerships. SMEs use multiple platforms—whether for accounting, invoicing, payroll or e-commerce. Instead of forcing them to use separate banking tools, Wio integrates financial services into these platforms. For example, businesses using accounting software can seamlessly sync their Wio Business accounts, eliminating manual reconciliation. Third, tailored lending solutions. Many SMEs struggle to access credit because traditional banks rely on rigid lending criteria that do not consider real-time business performance. Wio is pioneering data-driven lending models, assessing business cash flow dynamically rather than requiring extensive financial history. This enables SMEs to access working capital when they need it, without the friction of lengthy approval processes.

Beyond these initiatives, we continue to refine and expand our offerings based on direct feedback from SMEs, ensuring that Wio Business evolves in step with the needs of the UAE’s entrepreneurs and small businesses.

What currently are the most requested services that SMEs are asking of regional banks?

SMEs today expect banking to be seamless, integrated and technologydriven. The most in-demand services revolve around three key areas:

First, fast and flexible access to working capital. SMEs need financing solutions that match their cash flow cycles, rather than rigid loans with complex approval processes. They want instant access to funds, with approvals based on realtime revenue performance rather than outdated financial statements.

Second, streamlined payments and transaction capabilities. Businesses need efficient, low-cost cross-border payments, automated payroll solutions and digital invoicing tools. The demand for real-time payments is growing, and SMEs expect their banks to provide instant settlement options rather than waiting days for transactions to clear.

Third, real-time financial insights and automation. Entrepreneurs want banking solutions that do not just store their money, but actively help them manage it. This means automated expense tracking; cash flow projections and AI-powered insights that help them make better financial decisions. The ability to integrate these insights with accounting software is now a baseline expectation, not a premium feature.

Is

competition for SME business broadening risk appetites amongst regional banks?

There is no doubt that the SME banking landscape is becoming more competitive, but the real shift is in how banks assess and manage risk rather than simply increasing risk appetite. At Wio, we do not believe in applying the same credit evaluation methods used for large corporations to SMEs. Instead, we leverage real-time transactional data, cash flow analytics and industry insights to make more informed lending decisions.

Many SMEs struggle to secure financing because they do not have a

long credit history. Traditional banks often require extensive documentation, which can be a barrier for young businesses. Wio takes a different approach, focusing on business activity rather than legacy credit reports. The goal is not to loosen credit standards but to use technology and alternative data sources to improve credit decision-making. This allows us to expand access to financing while maintaining a responsible approach to risk management.

How is technology and AI assisting banks to offer increased help and opportunities for SMEs?

Technology is reshaping SME banking, making financial services faster, smarter

than day-to-day financial management. Third, AI-driven credit assessments. Traditional lending models often overlook SMEs, particularly newer businesses without extensive credit histories. AI enables banks to assess risk dynamically, using real-time revenue patterns rather than outdated financial statements. This makes it possible to offer financing to businesses that would otherwise be excluded from the traditional banking system.

Additionally, AI is strengthening fraud detection and cybersecurity, helping SMEs protect their financial assets from potential threats. AI-powered fraud prevention tools analyse transaction patterns in real time, flagging suspicious

THERE IS NO DOUBT THAT THE SME BANKING LANDSCAPE IS BECOMING MORE COMPETITIVE, BUT THE REAL SHIFT IS IN HOW BANKS ASSESS AND MANAGE RISK RATHER THAN SIMPLY INCREASING RISK APPETITE

and more accessible. AI plays a key role in this transformation, particularly in three areas:

First, AI-driven financial insights. SMEs often lack dedicated finance teams, which makes managing cash flow a challenge. AI helps by automating forecasting, tracking expenses and identifying potential financial risks before they become problems. Instead of manually checking balances, business owners can receive real-time alerts on upcoming expenses, late payments or cash shortages.

Second, automated banking operations. Many SME owners spend too much time handling administrative tasks like invoicing, reconciliation and payroll. AI-powered automation eliminates much of this manual workload, allowing businesses to focus on growth rather

activity instantly. As SMEs become more reliant on digital transactions, having built-in security measures is a critical part of the banking experience.

Conclusion

SMEs are the driving force behind the UAE’s economy, and Wio is committed to transforming the way they access and manage financial services. By combining technology, embedded finance and a customer-first approach, we are building a banking ecosystem that not only simplifies financial management but also empowers SMEs to scale and succeed. As the region’s SME sector continues to grow, the role of digitalfirst, insight-driven banking solutions will be more critical than ever. Wio is not just keeping pace with this shift—we are leading it.

Growth Enabler

Jarno van Hurne VP Product at Backbase provides an insightful look into the SME banking and finance sector from a technology perspective, outlining how digital tools and AI are key in freeing SMEs potential to prosper

Are technology businesses specifically gearing to provide banks with better products and services for the regional SME markets?

Yes, absolutely. SMEs and startups are economic powerhouses in the GCC, driving job creation and fostering significant growth, with Saudi Arabia aiming to increase the sector’s contribution to GDP by 35% by the end of the decade.

However, despite their vital role in employment, national income and innovation, these dynamic businesses continue to face substantial hurdles in accessing adequate funding and securing the necessary support for sustained growth.

Technology businesses are increasingly directing their efforts toward helping banks better serve SMEs - a market segment that has traditionally not had access to the

same level of personalisation and digital innovation enjoyed by larger enterprises. Technology enhances the banking experiences of SMEs in several significant ways. First, banks can digitise traditional banking processes like onboarding, loan origination, payments and transfers so they become more convenient for time-strained entrepreneurs. They also enable improved and faster access to credit, allowing SMEs to obtain funds promptly when needed. Options like automated credit scoring systems streamline the loan application process, making it quicker and easier for SMEs to access funding. Also, digital processes and automation reduce operational costs for banks, allowing them to offer more competitive rates and fees to SMEs.

Has the adoption of technology in banking enabled financial institutions to better serve SMEs?

Digital provides opportunities for banks to offer beyond banking services that help small business owners manage and grow their business. Innovative digital tools assist in effective cash flow management, offering insights and features that traditional banks often lack. Tasks like invoicing, payments and reconciliation can be automated, freeing up time and resources for SMEs to focus on their core business activities. Digital dashboards and reporting tools provide SMEs with up-to-date information on their financial performance, enabling better decision-making.

Which ways in particular does technology improve the banking experiences of SMEs?

By reducing the paperwork and in-person visits, technology allows small businesses to bank more efficiently, manage their finances anytime,

Jarno van Hurne, VP Product, Backbase

anywhere, saving them valuable time and resources. As a result, small business owners are increasingly unwilling to settle for banking solutions that weren’t made for them.

Overall, technology has revolutionised the way banks serve SMEs, providing them with faster, more convenient and personalised financial services. This has not only improved access to finance for SMEs but also helped them to improve their operational efficiency and competitiveness.

What initiatives do you have or are you implementing to attract banks to use your technology?

Backbase has a strong focus on delivering best-in-class customer and employee experiences, all on one AI-enabled banking platform. This comes with a wide range of solid capabilities across entitlements, payments, accounts & transactions - coupled with value added services like cash & liquidity management tools and advanced solutions like Forex, Direct Debits, Cash Flow Forecasting and Advanced Reporting.

We also have solutions for both (complex) Business account opening and Unsecured Lending and Trade Finance options. Our platform comes with leading fintech integrations across for e.g. accounting, invoicing and payroll solutions. Last but not least, Backbase is infusing all capabilities with Agentic AI, supercharging productivity for SMEs and delivering insights that were previously not possible.

What currently are the most requested services that SMEs are asking of regional banks?

Today’s small businesses are seeking a comprehensive set of services, including accounting, invoicing, payroll and cash flow management. Banks that provide these value-added services as part of their small business banking will be seen as true partners in fostering business growth.

By offering integrated solutions for managing finances, paying employees

and tracking revenue, banks can become essential partners for business owners. Additionally, partnering with third-party solutions to deliver these services creates new revenue streams and accelerates innovation. These collaborations also enable banks to expand their market reach and grow more rapidly, making them increasingly valuable to businesses at every stage.

Is competition for SME business broadening risk appetites amongst regional banks?

Definitely. Alternative providers have been successful in capturing market share with SMEs, pushing regional banks to adopt more data-driven risk models and updating their credit models to

experience that simplifies banking tasks.

c. Leverage data and AI to provide personalised products and proactive support.

d. Offer value beyond banking by integrating tools for managing cash flow, payroll and more, positioning themselves as comprehensive support for small businesses.

How is technology and AI assisting banks to offer increased help and opportunities for SMEs?

In the past, the diverse needs of small businesses meant that banks had to rely on relationship managers to personalise products and services. This approach often turned out to be costly and

DIGITAL PROVIDES OPPORTUNITIES FOR BANKS TO OFFER BEYOND BANKING SERVICES THAT

HELP SMALL BUSINESS OWNERS MANAGE AND GROW THEIR BUSINESS

accommodate a wider range of SME borrowers. New players in SME banking are customer-focused and seamlessly integrated into the daily workflows of small businesses, offering seamless digital experiences, personalised support and simplified solutions. Traditional banks, however, possess the advantages of trust, industry expertise, resources and extensive customer data. Nevertheless, their challenge lies in technology rather than capability.

To move forward, traditional banks should:

a. Modernise incrementally without complete overhauls, building momentum by adding solutions to existing systems.

b. Prioritise a user-friendly digital

complicated. However, with the rise of digital tools and AI, banks can now offer the same level of personalised service efficiently and at scale, transforming the unit economics of serving small business clients.

For traditional banks looking to reclaim their position in the market, it is crucial to build on their historical strengths such as their broad product portfolios, vast customer data and trust. Attracting small businesses requires a fresh perspective on what these clients really need from their banking partners. The focus should be on delivering genuine personalisation, convenience and scalability to meet the evolving expectations of small business owners.

Large in Mid-Sized

Detailing Citi’s global and regional approach to mid-sized businesses, Vineet Vetts Head of Citi Commercial Bank (CCB) for the United Arab Emirates provides their perspective on this increasingly important market

How does your bank define or categorise SMEs?

Citi’s Commercial Bank is a Banking business dedicated to supporting mid-sized corporates globally with their strategic ambitions, particularly with international expansion or cross border banking needs. We are

(CCB) for the United Arab Emirates

focused, as a franchise, on serving companies that have annual sales / revenues of between USD $10M and USD$3BN, globally; however, the targeted client segment varies from market to market, and we tend to focus largely on supporting mid-sized corporates and innovators or disruptors. In the UAE,

we work with Emirati based mid-sized corporates that need global banking services and solutions as well as global mid-sized corporates who are looking to set up banking infrastructure and need the local financial and banking support in the Emirates.

Where does SME business rank in your bank’s overall business landscape?

The Commercial Bank at Citi is a key component of the Banking strategy and a growth engine for the firm. We consider the size and scale of the midmarket globally to be a tremendous area of opportunity.

The Commercial Bank is an interesting cross-section of the firm; we work with other parts of Banking, such as the Investment Bank, to support mid-sized corporates with the capital raising or advisory needs. We also work very closely with our Treasury & Trade Solutions business in Services, which has a host of solutions that help with the financing needs of our clients as well as helping them with treasury efficiencies – for example, we are able to offer mid-sized corporates tailored trade and working capital solutions to support with strategic goals or set them up with a payments infrastructure that aligns with the multicurrency needs.

The Commercial Bank also works with Citi’s Markets business to provide solutions, such as FX or interest rate hedging. Finally, the Commercial Bank has a referral partnership with the Citi Wealth business as the majority of mid-sized corporates we work with are privately owned and as such owners

Vineet Vetts, Head of Citi Commercial Bank

and management teams could benefit from our Wealth services, the inverse also applicable.

What initiatives do you have or are you implementing to attract SMEs to do their banking with you?

For Citi’s Commercial Bank, our vision is to simplify global banking for midsized corporates. What we do is provide our clients with the same products and solutions that a large corporate would expect of a bank like Citi, while also doing this across our entire global network. We want to support mid-sized corporates, in the UAE and globally, with improving their finances – their trade and working capital, capital or fund raising, maximising returns on the cash and investments, innovating to solve for their financing needs to support their growth. By doing so we support this client segment with achieving efficiencies, resilience in their treasury or financial operations and processes.

In terms of initiatives, to mention a few, we are focused on ensuring a solutions-based approach to client advisory as well as an enhanced

Oftentimes we find mid-sized companies that have grown rapidly hold 20, 30 or even 40 banking relationships across many geographies, making treasury oversight challenging and the potential for trapped capital higher. Our aim is to support our clients by providing them a comprehensive and simpler overview of their treasury and finance activities across multiple jurisdictions. For example, we have developed a singleentry platform for commercial banking clients called CitiDirect Commercial Banking; this platform unifies all client touchpoints with Citi on one platform. So, as a treasurer of a company, you’d be able to see your FX, Cash, Loans and more, all in one place. This platform is still being rolled out globally in a phased approach.”

What currently are the most requested services that SMEs are asking of regional banks? I cannot speak for all regional banks, but I can speak for what Citi’s commercial bank is seeing in terms of trends globally and in the UAE.

DESPITE ALL THE MACRO (ECONOMIC AND GEOPOLITICAL) HEADWINDS WE HAVE SEEN OVER THE LAST FEW YEARS, WE DO CONTINUE TO SEE CLIENTS EXECUTE ON THEIR GROWTH PLANS THROUGH THE RATES CYCLE

digital client experience. The former is achieved through deep collaboration with our product businesses at Citi, as previously explained, and our Industry Coverage model. Our bankers are industry specialists and as such are able to provide a clear overview of industryspecific trends and advice on the best financing solutions for a client’s needs.

Despite all the macro (economic and geopolitical) headwinds we have seen over the last few years, we do continue to see clients execute on their growth plans through the rates cycle. However, activity, globally, has been muted over the last few years, with higher rates, as clients are more prudent in their willingness to invest in businesses.

WE ARE EMBRACING GEN AI AS AN ESSENTIAL PART OF BEING A WINNING BANK IN THE DIGITAL ERA.

It isn’t that they are not investing but it is that they are being particular. This hesitancy has reduced the activity we see at a client level, globally.

Globally, there’s been a bit of upside on liquidity, offsetting the lack of activity on the loan side and other types of investments. We find that mid-sized corporates with financing needs are seeking to reduce costs and potentially using existing liquidity rather than drawing on loans for operational needs. As rates come down the dynamics of this will change, but that will take time.

How is technology and AI assisting banks to offer increased help and opportunities for SMEs?

Increasingly, we are seeing that commercial banking clients, globally, are on the lookout for digital banking solutions and real ease in terms of banking, with a clear overview of their banking relationships. That’s why we developed Citi platforms that to give our clients consolidated views of their finances and solutions that connect their treasury needs globally.

Through Citi Ventures, Citi Institutional Strategic Investments and the Citi Impact Fund, we are investing in game-changing companies at the forefront of Gen AI.”

We are embracing Gen AI as an essential part of being a winning bank in the digital era. We have recently launched three new Gen AI tools for our colleagues, allowing us to free up more time to focus on delivering for clients.

Facing Challenges, Meeting Potential

Rehan Ali Head of Business Banking, National Bank of Fujairah describes the critical role of SMEs across the region and how NBF has set about partnering with them through the challenges they can face

Small and medium enterprises (SMEs) and startups are powerful engines of job creation and economic growth. With Saudi Arabia targeting a 35% GDP contribution from SMEs by 2030, the importance of these businesses is clearer than ever. Across the region, SMEs are not only fostering innovation but are also instrumental in driving economic diversification. However, their potential is often constrained by significant challenges, including access to funding, tailored banking services and the support needed to sustain growth.

National Bank of Fujairah (NBF), with its long-standing expertise in business banking, has been at the forefront of addressing these challenges, making significant strides to empower the SME sector. The recent launch of NBF’s Emerging Business Unit reaffirms this commitment, catering to newly-formed entities and established SMEs by providing them with tailored solutions and a seamless banking experience.

SMEs are the backbone of the GCC economies, accounting for most businesses and employment across the region. In the UAE alone, SMEs make up over 95% of registered companies and

Rehan Ali, Head of Business Banking, National Bank of Fujairah

employ approximately 86% of the private sector workforce. 1 These enterprises span various industries, from retail and manufacturing to technology and healthcare, making their contribution indispensable to national growth and diversification efforts.

In the UAE, SMEs are defined as businesses with a headcount of less than 250 and annual revenues of up to AED 250 million. This segment forms a cornerstone of the bank’s business strategy, contributing close to 50% of its profits.

Recognised as the “Best SME Bank” at the MEA Finance Awards 2023, and winner of “Best Real-Time Payments Implementation” and “Best Payment System Implementation” at the MEA Finance Awards 2024, NBF has consistently demonstrated its commitment to supporting SMEs through bespoke services and innovative solutions that enable businesses to grow, with realtime payments improving SME operations.

NBF is setting new standards, and the awards recognise the bank’s outstanding contribution to digital transformation and enabling competitiveness in SMEs. The awards further cement the bank’s reputation as a regional leader, committed to delivering innovative and reliable payment solutions.

NBF’s Emerging Business Unit provides personalised service and support, with dedicated relationship managers who understand the unique requirements of SMEs. The unit offers financial products such as working capital solutions, trade finance and cash management services. Customers also benefit from the convenience of opening accounts online, anytime and anywhere, without the need for branch visits.

In addition to traditional banking, NBF recognises the importance of fostering entrepreneurship and creating a thriving SME ecosystem. Through strategic initiatives, the bank provides mentorship programs, educational workshops and

networking opportunities, enabling SMEs to exchange ideas and learn from one another. These initiatives underscore NBF’s belief that empowering SMEs is about equipping them with the tools and knowledge necessary for long-term success.

Despite their critical role, SMEs face substantial hurdles in accessing the banking services necessary for growth. Traditional processes, such as account opening and loan approvals, are often time-consuming. Funding gaps remain a persistent issue, with many SMEs struggling to meet collateral requirements or secure financing on favourable terms.

NBF has proactively addressed these challenges through innovative initiatives such as NBF Connect and NBF EDGE. NBF Connect is a first-of-its-kind digital platform designed for SMEs, co-created with input from the SME community. The platform offers a suite of services beyond traditional banking, including HR support, legal advisory, e-commerce management and a collaborative space for sharing insights and best practices. It’s a one-stop shop for businesses looking to grow and thrive in a competitive market.

Embarking on the digital journey, NBF last year rolled its digital onboarding platform for commercial clients names the EDGE which enables entities to open account seamlessly from anywhere in the world without the requirement to physically visit the office. NBF EDGE, simplifies the complex process of opening business accounts, enabling SMEs and mid-tier commercial clients to complete this traditionally lengthy procedure digitally and paper-free. By removing barriers, the platform empowers businesses to focus on what truly matters: growth and innovation. This ease of access is critical in today’s fast-paced business environment, where agility and speed are key to staying competitive.

In an era of digital transformation, technology is reshaping the SME banking landscape. Artificial intelligence (AI), data analytics and digital platforms

THE SME SECTOR IS INCREASINGLY BECOMING A FOCAL POINT FOR BANKS ACROSS THE GCC, LEADING TO INTENSIFYING COMPETITION

are enabling banks to offer more personalised, efficient and secure services. For SMEs, these advancements mean access to tools that can streamline operations, reduce costs and uncover new opportunities.

NBF has embraced this technological shift, integrating advanced solutions into its offerings. AI-powered analytics, for example, help the bank understand SME behaviours and design products that align with their evolving needs. Digital payment solutions and e-commerce integrations allow SMEs to enhance customer experiences and compete in an increasingly online marketplace.

NBF remains committed to the important sector the economy and has also partnered with Emirates Development Bank (EDB) for their guarantee funds program to support SMEs in UAE

However, technology alone is not enough. NBF’s relationship managers play a pivotal role in providing personalised guidance to SMEs, ensuring they receive the tailored advice and solutions they need to navigate challenges effectively. This balance between innovation and human interaction is a cornerstone of NBF’s approach to SME banking.

The SME sector is increasingly becoming a focal point for banks across the GCC, leading to intensifying competition. While this competition drives innovation and broadens access to services, it also pushes banks to reassess their risk appetites. Striking the right balance between competitive offerings and prudent risk management is essential.

For SMEs navigating the complexities of today’s banking environment,

choosing the right partner is crucial. Banks that offer tailored solutions, embrace technology and maintain a customer-first approach can provide the support needed for sustained growth. NBF’s comprehensive range of services and commitment to innovation ensures SMEs have the resources they need to succeed.

With decades of experience, a deep understanding of the regional market and a commitment to innovation, NBF has established itself as a trusted ally for SMEs. Whether it’s through cuttingedge digital platforms or personalised advisory services, NBF empowers SMEs to overcome challenges and seize opportunities.

As the GCC continues to diversify its economy, SMEs will remain at the heart of this transformation. Their contributions to innovation, employment and GDP growth are indispensable. However, unlocking their full potential requires a collaborative effort between businesses, governments and financial institutions.

NBF is proud to play its part in this journey. Through its innovative solutions, strategic partnerships and unwavering commitment to customer success, the bank is proactively addressing the challenges SMEs face and paving the way for their continued growth and impact. For SMEs looking to thrive in a competitive and dynamic environment, NBF offers the expertise, tools and support needed to achieve their ambitions.

As the new engines of growth, SMEs are shaping the future of the GCC economy. With partners such as NBF by their side, their journey forward is one of promise and potential.

Sunny with a Chance of Showers

The GCC retail banking sector continues to remain robust, with executives expressing cautious optimism though acknowledging the coming year shows potential for both further opportunities and some challenges too

GCC retail banks have significantly benefited from the region’s recent economic boom, driven by ambitious national visions that are fostering diversification away from hydrocarbons and promoting sustainable development across various sectors. Profits have soared to record highs and asset quality is sound, with lenders enjoying robust capital and liquidity levels.

“GCC banks are more profitable than their peers in developed (and many emerging) markets and they are still growing rapidly,” McKinsey said in a report while noting that an evolving regulatory

environment marked by greater openness and measures to improve the ease of doing business will likely create additional opportunities.

S&P Global also projected that GCC banks will maintain a strong performance in 2025, albeit with a modest impact from lower interest rates. However, heightened geopolitical tensions and the ongoing rebalancing of global markets could potentially undermine banks’ creditworthiness, leading to a mixed performance for the region’s retail banking sector.

Retail banking is undergoing unprecedented change. Technological

advancements, heightened competition, evolving regulations, the rise of embedded finance, industry consolidation and shifting customer expectations are all disrupting traditional business models.

PwC said that the dynamic interplay of emerging trends is reshaping consumer trust and financial behaviours while forcing retail banks to re-evaluate their core identity and value proposition.

The GCC banking sector, known for its digital prowess driven by competition and substantial technology investments, is now embracing generative AI (GenAI).

The transformative technology is poised to revolutionise productivity within the financial services industry and GCC banks are well-positioned to capitalise on its potential.

McKinsey said that while most current AI use cases for retail banks focus on boosting developer productivity and streamlining operations, future applications are expected to diversify significantly, encompassing areas like product design and beyond.

The Gulf region is witnessing a surge in the adoption of neobanks and digital banking services offered by traditional

banks, driven by the population’s strong digital affinity and robust digital infrastructure. “Neobanks are still in the early stages of development in the GCC market. The digital-exclusive banks’ current product and service offerings are limited and mainly concentrate on raising deposits and issuing credit cards,” said S&P Global.

Meanwhile, the retail banking segment constitutes a fundamental pillar of Islamic financial institutions in the GCC and the broader Middle East region. S&P Global projected that retail customers will continue to contribute significantly to the growth of Islamic banking assets.

The GCC retail banking sector remains highly fragmented, making competition intense and banks in the region are demonstrating a robust appetite for international expansion.

Operating environment

GCC states are well-positioned for growth, driven by factors such as Saudi Arabia’s economic transformation initiatives, Qatar’s expanding gas production, ongoing reforms in Bahrain and Oman, and the robust performance of the non-oil sectors in Bahrain and the UAE. Brent oil prices also averaged $75 per barrel in the fourth quarter of 2024 and are projected to remain strong through 2027, supporting the growth of GCC economies.

Within this context, S&P Global projected that banks in the Gulf region will continue to grow their lending books without generating major macroeconomic imbalances. “Lending will range from a high 8%-9% in Saudi Arabia and the UAE to a modest 3%-6% in other GCC countries,” the rating agency said in a report.

GCC central banks – including Qatar and the UAE – followed the US Federal Reserve’s decision to cut interest rates by a quarter of a percentage point to 4.40% earlier in December to protect their currencies’ peg against the dollar.

The Federal Reserve cut interest rates by 25 basis points and GCC countries generally follow the US central bank’s lead

GCC BANKS ARE MORE PROFITABLE THAN THEIR PEERS IN DEVELOPED (AND MANY EMERGING) MARKETS AND THEY ARE STILL GROWING RAPIDLY

– McKinsey

in rate moves, as most regional currencies are pegged to the dollar. However, Fitch Ratings cautioned that interest rate cuts pose a significant threat to GCC banks’ profitability, as the rapid repricing of assets will outstrip that of liabilities.

“UAE banks face the greatest impact from rate cuts, while Saudi banks are more insulated due to fixed-rate financing. Kuwaiti banks’ net interest margin is sensitive to rate cuts, but central bank actions may mitigate the effect. Omani and Qatari banks benefit from negative repricing gaps, while Bahrain’s impact varies by bank,” according to Fitch.

S&P Global highlighted that the overall effect of the rate decline on profitability is negative, but it could reduce unrealised losses in securities portfolios and the cost of funding for banks that rely heavily on external funding.

The top five GCC banks – Saudi National Bank (SNB), Al Rajhi Bank, Qatar National Bank (QNB), First Abu Dhabi Bank (FAB) and Kuwait Financial House (KFH) – collectively earned $16.6 billion in the first nine months of 2024.

QNB, the Gulf’s largest lender by assets, reported a profit of QAR12.7 billion ($3.5 billion) in the nine months ended September 30; SNB registered a 3.9% year-on-year increase in profit to SAR 15.6 billion ($4.2 billion); FAB’s group net profit soared by 4% to AED 12.9 billion ($3.5 billion); KFH said its profit in the ninemonths to September 30 soared by 4.6% to KWD 482.9 million ($1.6 billion) and Al Rajhi’s Q3 net income reached SAR 14.2 billion ($3.8 billion), up 14.1%.

Over the years, GCC banks have used their strong post-pandemic profitability to set aside additional provisions, which

has created a cushion for any potential future shocks. “We expect asset quality indicators will remain broadly stable over the next 12-24 months,” said S&P Global.

The GCC banking sector exhibits notably high returns on equity and commands some of the highest market valuations globally. Over the past decade, the regional financial services industry has consistently delivered strong returns to investors, surpassing global benchmarks.

Rethinking retail banking

Retail banks continue to be key partners in financing, saving and investing, but the segment could benefit from a fresh, innovative approach to delivering financial services and products. The next frontier of retail banking lies in leveraging digital technologies to seamlessly integrate into customers’ daily lives, going beyond traditional banking services.

Tech advancements are reshaping the global banking landscape, with new technologies such as GenAI poised to revolutionise the banking sector across the Gulf region. Customers’ lifestyle habits are increasingly motivated and directed by the speed and simplicity of digital services that are at their disposal; the same is true of how they want to bank.

The relationship between banks and their customers has transformed significantly in the recent past. For banks that strive to be market leaders, integrating core personalisation elements across the range of touchpoints will be critical to delivering a superior experience and better outcomes.

“The reimagined engagement layer should provide the AI bank of the future with a deeper and more accurate understanding

of each customer’s context, behaviour, needs and preferences,” said McKinsey.

To enhance customer experience and engagement, banks should establish a dedicated engagement layer. Unlike traditional siloed channels, the layer prioritises the customer perspective and facilitates seamless orchestration across various touchpoints. It empowers retail banks to design and deliver personalised customer journeys with ten times greater efficiency.

“By leveraging a single omnichannel banking platform, you can adopt a customer-centric approach, orchestrate user journeys across all your touchpoints and innovate at the speed of digital,” according to banking solutions provider Backbase.

Meanwhile, customer experience in retail banking is rapidly changing due to the demand for more personalised and accessible services. Today’s hyperconnected banking customers possess a wealth of information about competing offerings and services, fostering a dynamic and competitive environment where traditional customer loyalty is diminishing.

“Banks that provide smooth, personalised and accessible experiences across all channels are more likely to retain and add customers, directly affecting their financial performance and key metrics,” said IBM.

Retail banks that cater to the high expectations of young, tech-savvy consumers in the GCC can gain a significant competitive edge. Several banks in the UAE and Saudi Arabia are fully reimagining their retail journeys, such as onboarding, personal loans, credit cards and home financing, according to McKinsey.

Customer experience and engagement are pivotal in shaping how customers interact with financial institutions. Over the years, the GCC region’s competitive banking landscape has evolved rapidly, with agile new entrants disrupting the traditional banking model, shifting the focus from products to people.

Today, banking customers, not products or business lines, are the centre

UAE BANKS FACE THE GREATEST IMPACT FROM RATE CUTS, WHILE SAUDI BANKS ARE MORE INSULATED DUE TO FIXEDRATE FINANCING. KUWAITI BANKS’ NET INTEREST MARGIN IS SENSITIVE TO RATE CUTS, BUT CENTRAL BANK ACTIONS MAY MITIGATE THE EFFECT. OMANI

AND QATARI BANKS BENEFIT FROM NEGATIVE REPRICING GAPS, WHILE BAHRAIN’S IMPACT VARIES BY BANK

– Fitch Ratings

point of strategies and business models.

For retail banks, the ability to harness large volumes of data and innovative technologies to understand customer journeys and deliver personalised offers and experiences has become essential.

From resilience to regeneration

Islamic banks in the GCC, Jordan, Iraq and Turkey held a significant market share of sector assets in 2024, ranging from 9% to 85% and the sector is poised for continued growth this year, potentially outpacing conventional banks.

Fitch Ratings attributed the growth in Islamic retail banks’ assets to several factors ranging from increased Shariah sensitivity, enhanced confidence, supportive regulatory environment and established market presence.

Islamic banks’ return on assets is projected to remain above conventional peers. Moody’s forecasted that the GCC Islamic banks’ net profit margins will be protected from lower interest rates following regional central banks’ move to ease monetary policy in line with the Federal Reserve.

“Historically, the retail heavy portfolios of Islamic banks in the GCC region drive higher financing yields and therefore stronger margins than conventional banks, mainly because current and savings accounts deposits continue to make up a large portion of their deposit

bases and present little pressure on cost of funds,” according to Moody’s.

Though Islamic banks in the region boast higher profit margins compared to conventional banks, their operational efficiency has traditionally lagged behind, largely due to substantial investments in extensive branch networks to cater to their significant retail customer base. However, recent years have witnessed a notable improvement in Islamic banks’ efficiency levels. The positive shift can be attributed to strategic initiatives such as digital transformation and streamlining of branch networks.

Meanwhile, Shariah-compliant retail banks are expanding beyond their traditional markets in the MEASA region. The trend of conventional retail banks embracing Islamic banking is more pronounced in the Southeast Asian nations, as many are establishing new Islamic branches or converting to fullfledged Islamic banks.

Bank executives entered 2025 with cautious optimism, acknowledging the year’s potential for both challenges and opportunities. While inflation has moderated and interest rates are beginning to decline, the global economic landscape remains uncertain. Sluggish growth, ongoing geopolitical instability and an evolving regulatory environment are likely to create significant headwinds for bank CEOs.

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Self Improvement

Dinesh Sharma CEO for Wealth and Personal Banking, Europe, Middle East and Africa at HSBC offers compelling insights into the recent improvement and development of retail banking across our region, and suggests how customers themselves can ensure enhanced experiences

What do you judge as the most significant change in retail banking in our region since the start of 2022?

The global pandemic undoubtedly reshaped every industry, forcing businesses to rethink operations, accelerate digital transformation, and adapt to new customer behaviours. Despite these challenges, the retail banking sector has responded with agility and has been recovering strongly, partially helped by interest rates with revenues increasing from roughly $112 billion at the end of 2021, to $140.9 billion at the beginning of last year, and projected to exceed $150 billion over the next years. Before the pandemic we all recognised that processes, products and services would continue to go digital, that remote and online banking would become smarter, and that customers would gradually grow more comfortable with digital banking. However, few could have fully anticipated the scale, speed, and significance of the mental shift that the pandemic demanded—especially in retail banking worldwide, and even more so in this region. People quickly grew confident in adding

their payment details to a wide range of new cashless apps and service providers, first-time retail investors embraced a fully digital investment journey through mobile investment apps, and it is considered normal now, for most people, to take out a lending product without ever meeting a bank representative in person.

The biggest change retail banks are facing now in terms of keeping up with customer expectations is to understand that we are not competing with other banks based on simple functionality and relevance when we put our entire bank on their phone. We are competing with an enhanced level of expectation, immediacy and sophistication as customers rightly expect control and information on their own terms. It is increasingly important to stay ahead - not only of other banks - but of how other industries are leveraging technology to reshape customer expectations and experience.

Are you expecting noticeable developments or trends in regional retail banking during 2025?

Yes. Central Banks across the GCC region are spearheading transformative initiatives to further modernise the retail banking sector. The UAE Central Bank’s Financial Infrastructure Transformation Programme, set for full integration by 2026, aims to accelerate digital transformation in financial services even more. This comprehensive program includes nine key initiatives, including the launch of a Card Domestic Scheme, an Instant Payments Platform, and the issuance of Central Bank Digital Currency for cross-border and domestic uses to name just a few. These digital payment initiatives will enable greater financial inclusion, promote innovation, and accelerate progress towards a cashless society.

The rapid pace of the digitisation of banking services, coupled with high mobile and internet penetration rates, enable more consumers to securely and comfortably access a wider range of financial services.

Dinesh Sharma, CEO, Wealth and Personal Banking, Europe, Middle East and Africa, HSBC

Should regional banks focus on customer acquisition or building existing customer value generation?

I would expect most banks to acknowledge the need to do both. While winning new customers is an important indicator of the success of the business, it is also critical to achieving the economies of scale banks need to sustainably grow revenue and profitability while delivering an outstanding service to their customers to continue to retain them.

Ensuring consistent growth is important – not only for any bank’s obligation to its shareholders – but also to continue to meet obligations to existing customers and colleagues. Growing the bank enables us to continue to invest in new technology, to upgrade processes and, having listened to customer feedback, to offer products that continuously improve customer experience.

This is what it means to consider both on the question of new customer growth versus value generation from existing customer. We refer to it internally as a ‘customer obsession’ as we strive to drive long-term, sustainable relationships with our clients which are based on our international connectivity, trust and value-added services which will help them with their financial needs.

Given the great number and diversity of customers across the region, can banks effectively cater to cultural, ethical or environmental concerns at the retail banking level?

Yes, absolutely, and the UAE market is a strong case in point. The UAE is one of the most diverse markets we serve within the HSBC Group with 97% of our customer base consisting of nonEmirati expatriates, representing over 100 nationalities from around the world. At HSBC, we can cater to the diverse needs of the communities we serve is through the diversity of our people in the UAE and beyond. For example, in the UAE, our colleagues come from

over 80 countries and, with an inclusive corporate culture that empowers people to share their views, comments, and ideas – we can draw on their experience of banking in their home markets and relate to the different needs and expectations of our broad customer base. One of the ways we use our understanding of our customers’ cultural considerations is to help us decide what partnerships we enter and how to create the right offering. Last year, we signed approximately 70 different partnerships in the market and each of them brings a unique prospect that helps us to deliver exactly what our customers need and want. It is this insight that helps us structure an offer with Amazon or Samsung for online shopping,

investment banking rather than retail, I believe the importance and availability of green home or car loans in retail finance should not be overlooked when considering environmental concerns.

Banks work hard to improve retail customer experiences, but what can customers do to improve their own banking financial lives?

There are three simple ways customers can do this. Firstly, the most the simple answer on how to improve your experience with your bank is to share your feedback. Businesses in every industry highly value the input of customers who tell them directly what can be better about products, services, and delivery.

WE ARE COMPETING WITH AN ENHANCED LEVEL OF EXPECTATION, IMMEDIACY AND SOPHISTICATION AS CUSTOMERS RIGHTLY EXPECT CONTROL AND INFORMATION ON THEIR OWN TERMS

with Real Madrid World or Vox cinema for family entertainment or with Lulu and Carrefour for grocery shopping. Everything that comprises card offering is based on customer understanding and insight.

On products offered by retail banks, it is incredibly important to understand the huge role of global finance in relation to environmental impact. Take green mortgages as a simple example. In the UAE, customers can lower the rate of their mortgage by purchasing a qualified energy efficient building or investing in energy efficiency in their home. The correlation between environmental concern and taking direct energy efficient action could not be clearer and, although sustainable finance and green bonds play a greater role in commercial and

Second, as our world becomes increasingly digital, it is advisable for all customers to embrace digital banking as more and more capabilities are placed directly in your hands. Embracing digital channels not only enhances convenience, but also builds familiarity with online and mobile banking systems, making it easier to spot potential scams and take proactive steps to protect yourself and your assets.

Finally, work with your bank to conduct regular financial health checks on our accounts. This will help you stay on track with your financial goals, identify inefficiencies, and make more informed decisions about saving, investing and spending to strengthen your financial security for the future.

Mastering Morphing Markets

Liaquat Parkar, Executive Partner – Banking at IBM Consulting describes the recent key changes to retail banking, highlighting the role of technology, how banks are adapting to ongoing change, and the need for customers to also play a part in their own personal banking experiences

What do you judge as the most significant change in retail banking in our region over the past three years?

Retail banking in the region has undergone a significant shift towards digital channels, with many customers opting for online and mobile banking over traditional branch-based services.

The pandemic served as a catalyst for this change, and the trend has continued over the past three years. Approximately 80% of customers now open Current Account Savings Account (CASA) accounts digitally, and most banks report over 90% of transactions being conducted through digital channels. Banks have increasingly digitised customer journeys which has led to an increase in customer acquisition rates, customer deposits and personal lending products.

Liaquat Parkar, Executive Partner –Banking at IBM Consulting

Are you expecting noticeable developments or trends in regional retail banking during 2025?

In 2025, banks will continue to enhance the customer experience by leveraging new innovative technologies, like Artificial Intelligence (AI). The AI revolution is just beginning with generative AI opening up tremendous potential as financial institutions begin to leverage data, automation and AI for productivity to better serve customers, support their associates and deliver shareholder value. Banks are at the forefront of using these advancements to deliver faster and better experiences. From onboarding and customer service to wealth management, compliance, operational efficiency, as well IT modernisation and development, such solutions will remain a key focus for investment.

According to IBM’s 2024 Global Outlook for Banking and Financial Markets, 78% of financial institutions are tactically implementing generative AI for at least one use case, with client engagement and risk management among the top priorities. This trend is expected to grow further.

Another area where we will see a strong push for is hyper-personalised banking experiences as customers increasingly demand a more tailored and personal approach to their banking needs. Banks are doubling down on modernising their data infrastructures, implementing robust Application Programming Interface (API) platforms and building relationships with

an ecosystem of industry partners to meet these expectations.

Digital payments will continue their upward trajectory, with the total global transaction value predicted to reach $16.62 trillion by 2028. In the GCC, we will continue to see an increase in the adoption of digital wallets, Buy Now Pay Later (BNPL) schemes, Peer-to-Peer (P2P) transfers and payments to SMEs via QR codes.

Should regional banks focus on customer acquisition or building existing customer value generation?

Banks must strike a balance between customer acquisition and retention efforts, focusing on building existing customer value generation while also attracting new customers.

This balance is particularly crucial in countries such as Saudi Arabia, the UAE and Qatar, where the net influx of expatriate workers creates ongoing opportunities for customer acquisition.

However, existing customers often yield higher profitability than new customers, as the acquisition costs have already been incurred. Providing exceptional customer service and the right tailored financial products to this segment is essential to sustain loyalty and maximise lifetime value. According to IBM’s Institute for Business Value, 64% of surveyed Banking and Financial Markets CEOs agreed that maintaining customer trust will have a greater impact on success than any specific product or service.

Have the changes in retail banking over recent years reduced or boosted banks’ margins?

Over the recent years, we have seen an increase in banks’ margins due to an

BANKS MUST STRIKE A BALANCE BETWEEN CUSTOMER ACQUISITION AND RETENTION EFFORTS, FOCUSING ON BUILDING EXISTING CUSTOMER VALUE GENERATION WHILE ALSO ATTRACTING NEW CUSTOMERS

increase in lending volumes, higher fee income, stable margins and cost efficiency.

Compared to global peers, GCC banks enjoy higher margins and lower cost-to-income ratios, spurring regional growth. Key factors supporting this performance include high oil and gas prices, rapid economic growth, low unemployment rates, favorable demographics, ambitious public investment programs and moderate inflation. These conditions have collectively bolstered banks’ balance sheets and margins.

Given the diversity of customers across the region, can banks effectively cater to cultural, ethical or environmental concerns at the retail banking level?

The GCC’s cultural and ethnic diversity has led banks to offer a range of products tailored to meet the region’s unique demographics. From multilingual virtual assistants to remittance services and Islamic financial products, banks are continuously innovating to meet the needs of their diverse customer base.

Environmental concerns are also gaining attention. Banks now offer products and services that promote

COMPARED TO GLOBAL PEERS, GCC BANKS ENJOY HIGHER MARGINS AND LOWER COST-TO-INCOME RATIOS, SPURRING REGIONAL GROWTH

sustainable practices, such as green loans and eco-friendly credit cards. Banks are also encouraging customers to use digital banking channels, minimising paperbased transactions and reducing their carbon footprint. Many institutions publish regular environmental performance reports, demonstrating their commitment to sustainability.

Banks work hard to improve retail customer experiences, but what can customers do to improve their own banking financial lives?

Customers can improve their financial well-being by identifying their short-term and long-term financial goals, such as building an emergency fund, paying off debt, or planning for retirement. By doing this, they can budget accordingly for their goals, expenses and savings.

Tracking expenses and distinguishing between essential and discretionary spending helps individuals understand where their money is going and where reductions can be made.

Choosing the right banking products, such as high-yield savings accounts, low-fee checking accounts and free international transfers, can further support financial goals. Additionally, automating transfers to savings or investment accounts ensures consistent saving habits.

Staying informed about changes in banking services, interest rates and financial regulations also empowers customers to make informed decisions and proactively manage their financial lives to achieve their financial goals.

Making Change

With

his assessment of the

region’s retail banking environment Rajesh Kannan Managing Director, Head of Wealth and Retail Banking

UAE and Head of International Banking EMEA, Jersey and Global Indian at Standard Chartered, describes a dynamically evolving and much enhanced world of personal banking

What do you judge as the most significant change in retail banking in our region over the past three years?

Over the past few years, the most significant change in retail banking has undoubtedly been the rapid move towards digital transformation. Customers in the region are increasingly expecting seamless, convenient and personalised banking experiences that match their evolving needs. Advanced technologies, such as AI and data analytics, are reshaping how services are delivered, enabling institutions to improve customer interactions and anticipate future demands.

This evolution has also fuelled the growth of tailored financial solutions, particularly for affluent clients. A major shift in the area has been the rise of international wealth management, propelled by the increasing global mobility of high-net-worth individuals. These clients seek diversification, crossborder investment opportunities and seamless wealth management solutions beyond their domestic markets. Banks that can effectively support them

Rajesh Kannan, Managing Director, Head of Wealth and Retail Banking UAE and Head of International Banking EMEA, Jersey and Global Indian at Standard Chartered

across jurisdictions are well-positioned to build lasting relationships and drive sustainable growth.

By leveraging technology, people and their global footprint, banks can offer smarter, more efficient services that address the sophisticated financial needs of international clients empowering them to navigate global markets while securing their long-term financial goals.

Are you expecting noticeable developments or trends in regional retail banking during 2025?

In 2025, personalisation will continue to be a significant trend, driven by advancements in AI and data analytics. Although the integration of AI is still evolving, its potential to anticipate customer needs, enhance product offerings and deliver targeted services such as financial planning and advice is becoming increasingly clear.

We also see a strong shift towards “productising advice.” Our Signature CIO Funds are a prime example offering clients access to our asset allocation advice in a product format giving them the ability to build foundation investment portfolios in an easy-to-execute solution. There is also a growing trend towards “democratising access” bringing sophisticated and high end investment solutions and advice that were traditionally exclusive to UHNW client segment to a wider spectrum of affluent clients. This philosophy is core to what we offer under our Priority Private proposition.

Sustainability will also play a role in shaping the banking landscape. With the region’s growing focus on sustainable finance and the rising demand for sustainability-linked investments, banks are aligning their offerings to these priorities. This focus not only supports environmentally and socially

responsible initiatives but also meets the expectations of an increasingly conscious customer base.

Should regional banks focus on customer acquisition or building existing customer value generation?

While customer acquisition remains important, building long-term value with existing customers is increasingly becoming a priority. In a competitive environment, the focus has shifted towards deepening relationships, offering greater value and delivering tailored services that meet evolving client needs.

Affluent and high-net-worth clients, in particular, benefit from wealth

IN 2025,

proven to be high-margin growth drivers, enabling banks to balance the scale and sustainability of their profitability.

What role does technology play in delivering financial services to professional investors?

Technology is integral to any bank’s service delivery, especially for professional investors. For us, the focus is on delivering digital with a human touch, efficiently and effectively. We combine a digital first model with personalised advisory to ensure clients receive the best of both worlds.

We have already introduced innovative tools such as myRM in the UAE, which enhances client engagement with

PERSONALISATION WILL

CONTINUE TO BE A SIGNIFICANT TREND, DRIVEN BY ADVANCEMENTS IN AI AND DATA ANALYTICS

management and bespoke financial services designed to enhance their financial journeys. By prioritising these relationships, banks can unlock growth opportunities from within their existing client base while fostering loyalty and trust.

Have the changes in retail banking over recent years reduced or boosted banks’ margins?

The impact on margins has been a mix of opportunities and challenges. On the positive side, digital transformation and automation have streamlined processes and improved operational efficiency, which can positively influence margins.

However, the investment required to remain competitive in technology and innovation, combined with heightened competition, has added pressure. That said, areas like wealth management and bespoke advisory services have

relationship managers and myWealth Advisor, an advanced portfolio review tool currently available in Hong Kong and Singapore, with plans to launch in the UAE soon.

Additionally, we actively pursue strategic partnerships that enhance client experience, such as our recent collaboration with Wise Platform for cross-border payments and SC Ventures Appro, which streamlines financial processes for our clients. These initiatives reinforce our commitment to innovation while preserving the trust, expertise and personalised service that our clients value.

Our use of disruptive technologies along with data analytics empowers us to provide personalised insights and tailored recommendations, allowing clients to make well-informed financial decisions. This technological edge, complemented with our INSEAD

certified Relationship Managers, ensures that our clients have the expertise and digital tools they need to navigate complex financial landscapes and seize emerging opportunities.

Given the great number and diversity of customers across the region, can banks effectively cater to cultural, ethical or environmental concerns at the retail banking level?

Addressing the cultural, ethical and environmental concerns of customers is both a challenge and an opportunity for differentiation. The region is home to a diverse population with varied preferences, including Shariah-compliant banking, ethical investments and sustainable finance.

To meet these expectations, banks are introducing products that reflect these values, such as ESG-focused investment options and Islamic financial solutions. This approach not only caters to specific client needs but also aligns with broader regional priorities like sustainability and inclusivity.

Banks work hard to improve retail customer experiences, but what can customers do to improve their own banking and financial lives?

Customers play a crucial role in shaping their financial well-being. Proactively engaging with the tools and resources provided by banks is a good starting point. Many banks now offer digital platforms that help clients track spending, plan budgets and access a range of financial planning tools.

Seeking professional financial advice is also invaluable. Whether it’s about creating a retirement plan, managing debt, or diversifying an investment portfolio, expert guidance can empower customers to make well-informed decisions. Lastly, improving financial literacy remains essential. A deeper understanding of personal finance enables customers to navigate choices confidently and build a more secure future.

Transformative Dialogues at the UK Parliament and Davos on Shaping Inclusive Financial Ecosystems

Oscar Wendel Editor-at-Large of MEA Finance, hosted three days of discussions in the House of Lords and the House of Commons in the UK Houses of Parliament on January 13 – 15, focused on exploring the intersection of technology and the design of banking infrastructure enabling financial inclusion. The following week, he led a roundtable alongside the annual meeting of the World Economic Forum in Davos

Shaping the Future of Financial Inclusion:

Connectivity and

AI

as Pillars of Personalised Financial Solutions

Samuel Burke of Fortune Magazine moderated the opening roundtable by noting the unprecedented opportunity to democratise finance through emerging technologies. Elisabeth MacDonald, CEO at Small Business Financial Exchange demonstrated AI’s transformative potential for small businesses by enabling nuanced risk assessments based on alternative data. She further provided compelling examples of AI’s potential to personalise credit for small businesses; by analysing alternative data—such as delivery patterns and supply chain activity—AI can create more nuanced risk assessments, enabling lenders to extend credit to businesses traditionally excluded from financial systems. Anu Jain, CEO of Nexus Cognitive, highlighted that “data preparation is the foundation of AI success,” underscoring the need for ethical and secure data sourcing and how inherent bias in AI models traditionally affects minority groups and can thus perpetuate their inability to move out of low-income brackets.

Tokenisation and Trust: A New Era for Global Finance

The roundtable on Financial Accessibility, Tokenisation and the Role of Trust in Advancing Inclusion expanded on these themes by exploring

Roundtable at the House of Lords

how tokenisation and decentralised finance (DeFi) can reshape the global financial landscape. The session featured Dr. Simran Chana of Cambridge Frontier Technologies Lab, who offered insights on bridging technological and ethical dimensions of financial innovation.

Dr. Simran framed tokenisation as a double-edged sword. While it offers opportunities to unlock liquidity— particularly in resource-constrained regions—he warned against its misuse. “If we tokenise assets like natural resources without proper regulation,” he cautioned, “we risk selling our future for short-term gains.” This perspective is especially pertinent to cases in Africa, where governments have tokenised national debt tied to resources like gold to attract foreign investment.

Bridging the Digital Divide with Trust and Regulation

Connectivity emerged as a critical enabler of financial inclusion. Samer Bishay, Founder & CEO of Karrier One, presented a practical solution with his company’s deployment of communityowned radio nodes. “Connectivity without borders,” Bishay explained, “empowers the unbanked to access financial services using blockchain technologies where Depin (decentralised physical infrastructure) is becoming key to distributing de-fi solutions.

Dr. Simran and Lia Müller Peña, Co-founder of Bitgpt.network and Intuitively.ai, stressed the importance of trust in advancing financial inclusion. Dr. Simran compared financial systems to healthcare, where rigorous testing ensures patient safety. “We need similar standards in financial systems,” he argued, calling for evidence-based policymaking and transparency in tokenisation efforts. He further pointed out that crypto is a single-point-of-failure topology like medicine. Müller Peña added it is the responsibility of the blockchain community to make the jargon-heavy discourse more accessible to end-users to support adoption.

One of the most compelling themes across both roundtables was the intersection of technology and accessibility. While AI and blockchain offer transformative potential, their success hinges on addressing foundational issues like internet connectivity and energy access.

Samer Bishay’s description of Karrier One’s decentralised connectivity model exemplified how telecommunications can bridge critical divides. By empowering communities to own and operate telecom nodes, his solution creates a shared economy that enhances financial inclusion and connectivity. However, the participants also acknowledged the barriers to adoption. Müller Peña noted that many people lack the technical literacy to use blockchain or AI systems. She advocated for user-friendly designs, comparing the current state of blockchain to the early days of personal computing. “We need a ChatGPT moment for blockchain,” she remarked, emphasising the need for intuitive, accessible tools.

Dubai and DMCC Take Center Stage at Davos

Oscar Wendel moderated the panel in Davos that explored Dubai’s strengths in attracting capital and tech startups to unlock growth. The participants included Dr. Lisa Cameron, a former MP in the UK Parliament, Pablos Holman, a VC and

inventor who built the first spaceships at Blue Origin for Jeff Bezos and the world’s smallest PC and 3D printers at Makerbot, Kristina Lucrezia Cornèr, Global Head of Strategy at Exponential Science and Alessia Baumgartner, VP of Ecosystems.

Key Takeaways from the House of Lords and House of Commons Roundtables Included the Following Recommendations:

1. Connectivity as a Priority Investments in telecommunications infrastructure are critical for implementing AI and blockchain solutions in underserved regions.

2. Data Sovereignty and Security

Protecting sensitive data while leveraging AI for actionable insights must be prioritised by enterprises and governments alike

3. Tokenisation with Caution Robust regulation is needed to ensure tokenisation benefits society rather than concentrating wealth.

4. Simplifying User Experiences

Financial technologies must prioritise usability, particularly for populations excluded from formal banking systems.

5. Ethical Frameworks for AI

Responsible AI deployment should address systemic biases and unintended consequences.

Duscussion Panel at Davos

Community Spirit

As the UAE’s first fully integrated digital “community” bank, Mohammed Wassim Khayata, Chief Executive Officer, Al Maryah Community Bank explains the philosophy behind Mbank, describing how their disruptive yet thoughtful approach to banking and finance brings value to their customer communities and their business

Tell us about Al Maryah Community Bank (Mbank) and the key landmarks in your progression since launching in 2021.

Al Maryah Community Bank (Mbank) is the UAE’s first fully integrated digital “community” bank that focuses on UAE community development through financial inclusion whereby it offers banking services to all segments of society whether they are UAE Nationals,

residents, or businesses (SMEs or corporates) through forward-thinking concepts driven by innovation and technology, in line with the futuristic vision of the Nation’s leadership.

This year, we reaffirm our commitment to serving the UAE and promise to launch products and services that fall in line with the President His Highness Sheikh Mohamed bin Zayed Al Nahyan’s declaration of the “Year Of Community”. This inspiring initiative reflects the

UAE’s dedication to inclusivity, cultural connection, tolerance and the well-being of all its people.

Since its inception in 2021, Mbank established strategic partnerships and embraced the latest technologies and banking related systems and trends, including the utilisation of data analytics and insights to personalise experiences, presenting to its customers value-added services. As a result, Mbank was the first bank in the world to receive the prestigious “International Digital Customer Experience” certification by the globally well-renowned accreditation body, the British Standards Institution (BSI), on the basis of delivering the highest levels of Customer Digital Service Excellence experiences through its self-service banking platforms that are of world-class standards – for 2 years in a row!

Mbank also received the “Digital Journey Disruptor” award by Mastercard MENA, which is a testament to the emerging innovative technologies such as artificial intelligence, big data, machine learning and the Internet of Things, among others, that are being implemented into Mbank’s systems to create flexible, scalable, robust and secure business models that are redefining customer experiences, transforming banking norms and revolutionising the banking industry.

At Al Maryah Community Bank, we use technology and artificial intelligence to

Mohammed Wassim Khayata, Chief Executive Officer, Al Maryah Community Bank

serve the community in a cost-efficient manner to provide all our services at the lowest cost possible, with no hidden fees. This is what makes us a community bank, and we have seen a big success in providing honest, transparent, straightforward and easy customer experiences.

In terms of safety, we adopt the most advanced security protocols and clipping technology to ensure that all customer personal and financial data is protected at all times.

We offer customers a seamless experience whereby they can open an account in less than 5 minutes using their UAE PASS. They can easily proceed with card payments using their mobile app, apply and get a cheque book with a click of a button, plan their instalments, buy now pay later and many more. We provide customers with the opportunity to empower their children’s financial literacy by opening a Eyalna Minor’s Account whereby they can access the account and teach them how to manage their money at a young age.

Mbank constantly works to reshape its local financial services landscape and expand its geographical network by forming strategic partnerships with exchange houses across the UAE whereby customers can deposit their cash and cheques. In addition, Mbank

AT AL MARYAH COMMUNITY BANK, WE USE TECHNOLOGY AND ARTIFICIAL INTELLIGENCE TO SERVE THE COMMUNITY IN A COST-EFFICIENT MANNER TO PROVIDE ALL OUR SERVICES AT THE LOWEST COST POSSIBLE, WITH NO HIDDEN FEES

integrated its services with the FABePay portal, offering both retail and corporate customers seamless access to deposit cash and cheques also at an extensive network of ATMs and Cash Deposit Machines (CDMs) across the UAE.

We promote the possibility of customers investing in Initial Public Offerings (IPOs) through the Mbank UAE mobile application and the generation of National Investment Numbers (NINs) for both ADX & DFM via the app too.

For any type of company, we offer a seamless account opening process in less than 48 hours and with no minimum balance with a range of services such as working capital finance, trade finance, corporate credit and much more. In addition, Mbank is forming strategic partnerships with several free zones to offer entrepreneurs seamless corporate

account opening processes to help boost business.

Mbank partnered with Emirates General Petroleum Corporation-Emarat to launch “Mbank Wallet” services across more than 120 Emarat service stations in Dubai and the Northern Emirates whereby customers enjoy the convenience of safe, seamless and contactless payment transactions at Emarat stations on fuel and convenience store “Freshplus” products.

Mbank is also proud to be the first digital bank in the UAE to have signed a commitment letter with The Science Based Targets initiative (SBTi), an organisation that helps companies set greenhouse gas emissions reduction targets, in order to bring meaningful climate action and contribute to global efforts to mitigate the impacts of climate change; improving its Environment, Social and Governance (ESG) practices. In line with its commitment to SBTi, Mbank has recently launched an in-house ESG department that will drive the bank’s overall ESG strategy.

Mbank partners with esteemed universities and colleges in the UAE to offer academic and professional programs to students, reinforcing Mbank’s commitment to empower the youth of our community; facilitating the transfer of business skills and professional knowledge, and preparing the future generation for their professional careers.

What distinguishes Mbank in the UAE’s highly banked, fast evolving and competitive market?

Apart from being a digital bank that offers a seamless experience when

opening accounts and full integration with UAE Pass while retrieving customer documentation to make customer experiences easy, Mbank is the first bank to adopt blockchain technology, and we have developed a wallet that will allow customers to have access to AE Coin, which is regulated by the CBUAE.

The AE Coin is a stablecoin pegged to the Dirham (1 AE Coin = 1 AED) and is going to be used for settlements and payments, as well as off-ramp, on-ramp and transactions with virtual assets.

For individuals and businesses, AE Coin introduces a new era of transparent, cost-effective financial services, from payments to decentralised finance (DeFi) applications. In a rapidly evolving digital world, AE Coin sets the standard for trust, security and innovation in digital currency.

With a focus on stability, scalability and efficiency, AE Coin enables fast, low-cost transactions, all while operating under the regulatory oversight of the Central Bank of the UAE. It’s the future of a seamless, secure and innovative digital economy.

This paves the way for the whole economy to benefit from blockchain technology and its advantages in terms of security, decentralised ledger, transparency and it will definitely contribute to the UAE’s Digital Economy Strategy for 2030.

Mbank offers also a suite of customised solutions to companies and SMEs through its partnerships with entities such as Etihad Credit Insurance, whereby we support exporters and re-exporters and empower them to expand their businesses and enter global markets. Our innovative financing solutions allow them to be more efficient through risk management platforms and eases the challenges that they may face in general.

Please tell us about your partnership with AE Coin and how this first-of-itskind stablecoin in the UAE will benefit both retail and corporate customers. Mbank is very proud to launch AEC Wallet, the very first wallet for AED denominated stablecoin in the region,

making AE Coin available as a digital currency to Mbank customers, both retail and corporate. AE Coin is the first stablecoin in the UAE, regulated by the CBUAE and is meant to be used by both individuals and businesses.

We are happy to be offering customers a new instant, secure, stable, innovative, low-cost and efficient payment experience that will reshape the future of the digital economy.

Through the AEC Wallet, customers will be able to send and receive AE Coin, pay quickly and conveniently by simply scanning QR codes, link their billers to the wallet for easy and convenient bill payments, top-up the AEC Wallet by transferring AED amounts to AE Coin balance, transfer their AE Coin balance to AED balance, and then cash it out. Customers can enjoy the benefit of paying for their purchases at stores or online without the hassle of handling cash or cards… only by using their digital AEC Wallet.

Where do SMEs rank in Mbank’s business and services development priorities?

Mbank’s mission is to empower businesses to thrive by providing them with the tools they need to manage their finances efficiently and securely in a very

fast-paced environment. We recognise the challenges that these businesses face, and accordingly we have designed our Corporate Banking services to offer them new ways in which they can modernise their processes and have them facilitated.

Mbank’s AI-powered internet banking platform is user-friendly and has advanced security measures such as multi-factor authentication and 24/7 fraud monitoring, providing businesses with peace of mind while they focus on growing their operations.

No matter the type of company, business owners can now easily open a Corporate Bank Account via Mbank’s Corporate internet banking in less than 48 hours, with no minimum balance, and enjoy the vast range of products that fall within the Corporate Banking Suite, such as online and mobile banking, savings and checking accounts, wages protection system (WPS), overdrafts, loans, trade finance and corporate cards, among others. In addition, the suite includes advanced features such as real-time account monitoring, customisable alerts and automated payment and invoicing tools, enabling businesses to streamline their financial operations and improve their cash flow.

In parallel, Mbank has strategically partnered with Khalifa Fund,

Abu Dhabi Chamber of Commerce, Ajman Chamber of Commerce, UAQ Chamber of Commerce, DMCC, RAKEZ, Meydan Management Services, Abu Dhabi Ports and Etihad Credit Insurance to offer Entrepreneurs with Fully Digital, efficient and smart Business Banking Facilities.

Please tell us about Jaywan Debit Card and why Mbank was the first, and currently still the only issuer of the card.

I would like to thank the Central Bank of the UAE for supporting us throughout this project, whereby we launched the Jaywan Debit Card, the UAE’s first National Debit Card, and connected it to our groundbreaking blockchain-based Mbank Wallet platform that will allow customers to check and review their transactions. I would also like to extend our gratitude to Al Etihad Payments for their exceptional support in making this initiative a success.

We are very proud to be the pioneers in rolling out the domestic card scheme IT infrastructure for the local Debit Cards, in line with the Central Bank of the United Arab Emirates’ timeline and plan of execution. We developed a plan to implement the new generation of the Jaywan system, and we are pleased to put our modest expertise in this field in the hands of banks operating in the country, with the aim of implementing the vision of Al Etihad Payments that aspires to provide the best payment and cash transfer mechanisms in the UAE.

Powered by advanced blockchain technology, this pioneering initiative, a first of its kind, empowers customers with the ability to pay seamlessly at all POS terminals across the UAE, transfer money internationally with ease and enjoy zero fees for cash withdrawals. By leveraging the security and efficiency of blockchain, Mbank set a new benchmark in financial convenience and inclusivity, reinforcing its commitment to innovation and serving the diverse needs of its customers.

The launch of Jaywan Cards reflects Mbank ’s commitment to fostering

financial inclusion, serving the local community and enhancing its position in the UAE ’s financial ecosystem. This initiative aligns with the Central Bank of the UAE and Al Etihad Payments ’strategic timeline, supporting the introduction of over 10 million new debit cards into the UAE market over the next two years.

The Jaywan Debit Card will be co-badged with international brands, in addition to automated seamless integration with other international currencies like the Indian Rupee, in partnership with the Central Bank of India. UAE President His Highness Sheikh Mohamed bin Zayed Al Nahyan and Indian Prime Minister His Excellency Narendra Modi signed an agreement last January that will allow India to settle trade in rupees instead of dollars, boosting India’s efforts to cut transaction costs by eliminating dollar conversions. The agreement aimed to facilitate easier cross-border money transfers between both countries.

Mbank not only serves its customers but also enables other banks in the UAE to adopt Jaywan Cards through its state-of-the-art Mbank Wallet platform. This Open Finance approach provides a comprehensive digital wallet infrastructure that banks can seamlessly integrate into their operations to meet the evolving needs of their customers.

The Mbank Wallet offers a full suite of payment solutions, giving users the ability to manage their finances on the app while using Jaywan Cards for in-person transactions. We have created financial planning tools for our customers, and this will offer them low-cost solutions, more transparency and will in return help the economy.

Given the rapid changes banking is undergoing, how do you foresee Mbank’s shape and role as a financial institution by the end of its first decade since launch? Mbank has disrupted banking operations not only in terms of products and services, but in terms of how our organisational

chart functions with our IT infrastructure and applications’ structure.

With adopting blockchain technology and taking into consideration how the world is changing, not only in terms of how banking is being reshaped, we are also witnessing the emergence of regulations towards crypto currencies and stablecoins. We are seeing a fast adoption by countries, which is an important indicator. Accordingly, we began to innovate and created a new suite of products and services related to investment banking.

We invested in a company under the name of “Emirates Coin Investments.”

It is SCA regulated and will offer virtual assets, which is the first of its kind in the Nation.

We will have a portfolio, long term savings for various segments, various risk appetites and more –allowing customers to set financial planning objectives.

This will scale up the capabilities of customers to find their financial potential in terms of achieving their financial goals, utilising AI-based solutions for long-term savings and achieving the financial goals of our market segments.

With this, we will be putting up a very solid platform of comprehensive specialised banking services:

1. Mbank as a specialised bank that serves the community.

2. Emirates Coin Investments, which we have invested in, developed and is SCA regulated.

3. Our partnership with Changer, which is an ADGM-regulated custodian that we are working with to develop a new kind of crypto-banking products and services portfolio.

4. In addition, we’ve identified very strategic partners who really help us achieve our objective of offering state-of-the-art products and services. Such partnerships will be announced soon to the public. Stay tuned!

It involves the use of Application Programming Interfaces (APIs) to share consumers’ financial data with third parties that provide financial products and services. The trend is popular with consumers and financial institutions alike.

Global consultancy firm BCG projected that over the next three to five years, governments and regulators will likely intensify efforts to advance open banking, a trend that presents a medium- to longterm risk for banks that are not prepared to leverage their infrastructure as data users rather than solely as data providers.

Open to Change

Open banking is driving significant, transformative changes across the GCC financial services sector, prompting government mandated initiatives and banks to adopt a consumer-centric approach fostering rapid innovation and increased competition

Meeting changing customer expectations across channels continues to be a priority for banking leaders in the Gulf region’s fast-moving financial services industry. To thrive in the competitive and overbanked GCC market, banks are reinventing themselves, focusing on businesses where they can achieve and extend market leadership in the new digital world.

Accenture says that innovative technologies such as the cloud and artificial intelligence (AI) have transitioned from emerging trends to transformative forces that are revolutionising banking in ways that were unimaginable a decade ago.

With customers demanding more from their banking experiences, financial institutions are upping their game and delivering robust customer experiences.

Open Banking holds promising potential to positively impact the GCC banking sector, as demonstrated by its successful implementations in other regions.

“Open banking provides the perfect backdrop for reimagining the customer experience, offering opportunities for banks to integrate new digital services and create smooth user journeys,” according to Accenture.

Originating from Europe’s Payment Services Directive 2 (PSD2), which in 2019 mandated banks to share customer data with third-party providers securely, open banking has evolved beyond a mere compliance requirement.

The transformative technology now presents a strategic opportunity for incumbents to reinvent customer relationships by offering hyperpersonalised services and products.

Meanwhile, open banking has emerged as a key driver of financial services digitalisation in the GCC. By adopting open banking frameworks and APIs, regional banks are fostering interconnected ecosystems, elevating customer experiences and catalysing industry-wide innovation.

The extent of open Banking implementation and regulation in the GCC region differs across jurisdictions, but the current momentum suggests significant potential to support governments’ economic visions by reshaping the region’s financial landscape.

The state of affairs

The global open banking market is poised to reach a staggering $135 billion by 2030, fueled by a surge in regulatory activity. The policies can be broadly categorised into two types: mandatory open banking frameworks enforced by regulators and those that encourage but do not explicitly require open banking.

Though the transformative technology might initially appear as a threat to incumbents, the successful implementation of PSD2 in Europe has shown that the most progressive banks view it as a significant opportunity.

“Open banking allows banks to expand their revenue boundaries by targeting previously underserved segments and by offering new products, such as premium APIs,” according to PwC.

Saudi Arabia, Bahrain and the UAE have been at the forefront of open

banking implementation in the Middle East. While the GCC region is recognised for its progressive stance on open banking, most countries have primarily relied on regulatory mandates to drive implementation, with the exception of the UAE.

PwC projected that open banking has the potential to reshape the financial services landscape, and several financial centres in emerging markets, including the GCC region, are making considerable moves in this space.

Bahrain was the first to mandate open banking and the UAE and Saudi Arabia are now making moves to follow their neighbour’s example. The kingdom issued its open-banking rules in 2018, followed by a framework with guidelines on data sharing and governance in late 2020. The government is implementing a Europeanstyle regulation-driven approach.

Following the issuance of its open banking policy in January 2021, the Saudi Central Bank (SAMA) published its open banking framework in November 2022, with an initial focus on account information services to be followed in the second phase by a focus on payment initiation services.

SAMA introduced an ‘Open Banking Lab’ in December 2022 to speed up the development of open banking in Saudi Arabia. The ‘Lab’ constitutes a ‘technical testing environment’ to enable established banks and fintech companies the opportunity to ‘develop, test and certify’ open banking services to ensure compatibility with the framework.

“To succeed in open banking, banks in Saudi Arabia and the UAE should start thinking like platform companies, flexing their business models to connect people and processes with assets and backing that up with technology infrastructure that can manage interactions from internal and external users,” said Accenture.

The Central Bank of the UAE is spearheading a comprehensive Financial Infrastructure Transformation (FIT) Programme, an ambitious initiative that encompasses nine key projects, including

the establishment of open finance platforms, with a target completion date of 2026.

Al Etihad Payments, a unit of the UAE central bank, teamed up with Core42 last April to commence the implementation of open finance in the country.

Open banking platforms, powered by APIs, empower both retail and enterprise clients to access real-time consumer financial data to facilitate the secure sharing of account information and transaction history with external entities, including vendors, suppliers, business partners and other banks.

Over the years, the emergence of fintechs and neobanks, often dubbed ‘digital attacker banks’, has underscored the shortcomings of incumbent banks in delivering hyper-personalised customer experiences. Today’s banking customers demand personalised engagement from all businesses they interact with and banks are no exception.

Open banking, with its core principle of allowing customers to share their financial data with third-party providers, is revolutionising the banking landscape. Beyond simply accessing accounts, the transformative force is unlocking

OPEN BANKING ALLOWS BANKS TO EXPAND THEIR REVENUE BOUNDARIES BY TARGETING PREVIOUSLY UNDERSERVED SEGMENTS

AND BY OFFERING NEW PRODUCTS, SUCH AS PREMIUM APIS

The GCC region serves as a compelling microcosm of the global open banking landscape and PwC anticipates that the transformative technology will significantly revolutionise the financial services sector.

Hyper-personalisation

The way we bank is on the verge of a seismic shift fuelled by advancements in financial technologies. By the end of the decade, the banking landscape will be unrecognisable, driven by innovative solutions and personalised experiences.

“One of the key benefits of open banking is the ability to deliver more personalised and seamless banking experiences. With greater access to customer data, banks can create tailored services such as automated savings tools and personalised investment advice – that meet the unique needs of each client,” said Accenture.

a wave of hyper-personalisation that’s transforming the customer experience.

Traditionally, banks relied on limited data points and generic profiles to understand customer needs, which often resulted in one-size-fits-all solutions and a lack of truly tailored experiences. However, open banking provides a wealth of granular data, such as spending habits, investment preferences and risk appetite.

“Open banking breaks down the silos within the financial sector to promote a more interconnected and dynamic marketplace. It aims to enhance the ecosystem through increased transparency and customer empowerment,” according to Brankas.

The data-rich environment empowers banks to offer bespoke financial advice, develop hyper-personalised products, deliver proactive customer support and augment customer engagement.

– PwC

Customers are now clamouring for the same level of sophistication, immediacy and personalisation in their interactions with banks as they do in other industries. Industry experts say banking customers are willing to share their data if assured of receiving personalised services.

However, the success of hyperpersonalisation in open banking hinges on trust. Banking customers must feel confident that their data is being used responsibly and ethically. Transparency and control over data sharing are paramount. Banks must prioritise customer privacy and security while demonstrating the value that personalised services can deliver.

Frictionless payments

GCC states are modernising their banking infrastructure to facilitate faster and more secure financial transactions, transitioning away from traditional methods such as cheques and cash. The shift towards realtime or instant payments in the region is aimed at unlocking the full potential of the digital economy for both individuals and businesses.

Al Etihad Payments unveiled Aani, an innovative instant payments platform designed to revolutionise digital transactions within the country, in October 2023. The real-time platform empowers secure and immediate financial exchanges 24/7, facilitating seamless interactions between consumers, businesses, government entities and other stakeholders.

Open banking is undeniably revolutionising the Gulf region’s payments landscape. Its implementation brings forth a wealth of advantages for consumers and businesses alike.

Mastercard highlighted that though open banking increases conversion rates for businesses and merchants, it offers consumers all the choices, conveniences and transparency they deserve - benefiting all parties in the payments ecosystem.

The emergence of real-time payment rails fosters significant innovation within

OPEN BANKING ENABLES FRICTIONLESS PAYMENTS BY LEVERAGING APIS THAT FACILITATE SECURE

AND REAL-TIME DATA EXCHANGE

BETWEEN BANKS AND THIRD-PARTY PROVIDERS

– Mastercard

the payments ecosystem, enabling payment service providers to enhance customer experiences through accountto-account (A2A) transactions – a trend further amplified and accelerated by open banking initiatives.

While account-to-account payments have primarily been used for bill payments and e-commerce transactions, McKinsey expects a gradual shift towards A2A payments at the point of sale.

“Open banking and the account-toaccount payments it enables could benefit not only fintechs but also merchants, banks and consumers. Possible advantages of this new approach to banking and payments include lower costs, faster settlement and more secure transactions,” McKinsey.

Open banking has revolutionised bank payments by introducing a novel payment initiation mechanism, effectively ushering in the era of “open payments”. Though the innovative technology does not introduce new payment rails, it leverages APIs to facilitate seamless and flexible payment initiation.

The API-driven approach extends beyond simple one-off payments. It empowers users and businesses to establish mandates for variable recurring payments (VRPs), enabling recurring transactions with enhanced flexibility and control.

“Open banking enables frictionless payments by leveraging APIs that facilitate secure and real-time data exchange between banks and third-party providers,” according to Mastercard.

The transformative technology advances the customer journey by offering convenient, transparent and

cost-effective alternatives, which enhances convenience and drives higher conversion rates for businesses while simultaneously mitigating fraud risks.

Banking consumers’ increasing desire for frictionless, more seamless and intuitive value-added customer experiences is driving governments, banks and regulators to develop open and collaborative financial ecosystems. While real-time payment infrastructure has essentially changed the payment landscape, the actual value of instant payments is only realised when surrounded by value-added services.

Industry experts say open banking will enable the creation of financial dashboards that bring together consumer data such as investments, savings and cash flow in one location. Similarly, variable recurring payments APIs are paving the way for the future of open banking payments in the GCC region.

The integration of open banking APIs into payment systems within the GCC has not only accelerated transaction speeds but also significantly improved the security and transparency of financial operations compared to traditional bank transfers. The implementation of open banking has established instant payments as a cornerstone of the modern banking experience in the region.

Open banking empowers banks to transcend the traditional role of financial intermediaries and embrace a technology-centric approach. By breaking down barriers between industries, it enables incumbents to explore innovative business models, attract new customers and unlock new revenue streams.

An Open Vista

Highlighting the numerous improvements and enhancements, and some of the resistance points too, Saurabh Bagrodia Head - Financial Services, MEA at Infosys provides a clear and broad overview of the progress of Open Banking across our region

Currently how embedded is Open Banking into the regional banking and finance sectors?

Open banking has seen a mix of regulatory and market-driven approaches. Adoption varies across the region.

Saudi Arabia has issued guidelines to prepare for open banking, emphasising the importance of platforms and APIs. Saudi Central Bank’s (SAMA) Open Banking Framework, launched in 2022, has accelerated the adoption of APIs among banks and fintechs. Major banks like Al Rajhi and Riyad Bank have begun collaborating with fintechs to create innovative financial products and services. The fintech ecosystem in Saudi Arabia is expanding and I am excited to meet a few of them at LEAP 2025

In UAE - AI Etihad Payments (AEP), is driving open finance initiatives as part of the Central Bank’s ambition to modernise and enhance the financial infrastructure through the Financial Infrastructure Transformation Programme. It is enhancing the digital payment infrastructure in the UAE, facilitating secure and efficient payment solutions. We have seen the launch of Aani - an instant payments platform allowing individuals and businesses to transact via their mobile

instantaneously, improving cash flow and enabling financial inclusion. The Central Bank has also launched the financial services Sandbox, allowing banks and fintech firms to test innovations in a controlled environment.

Bahrain, has implemented the Bahrain Open Banking Framework (OBF), which sets out guidelines for banks and fintechs to collaborate and innovate. This has enabled banks such as Bank ABC and Al Baraka Islamic Bank to launch open banking platforms that

enable customers to aggregate their financial data, providing a holistic view of their finances.

Qatar, Kuwait and Oman have also started working on their open banking efforts.

Elsewhere - consortiums such as the Banking Industry Architecture Network (BIAN) play a crucial role in standardising banking APIs and promoting interoperability among banks.

What do judge as the most profound effect that Open Banking has had on the region’s banking market?

The most profound effect of open banking on the region’s banking market is its ability to foster competition and enhance consumer choice. This has led to an acceleration of digital transformation among banks and is growing the financial ecosystem, benefitting customers with enhanced experiences.

By allowing third-party providers access to consented customer data, banks are compelled to innovate and improve their offerings — budgeting tools, investment advice and real-time insights into spending patterns that are more personalised to individual customer needs.

Emirates NBD have launched the Liv. app to target younger, tech-savvy customers. Another example is Abu Dhabi Commercial Bank (ADCB). The bank has integrated personal finance management tools into its offerings, allowing customers to track spending, set budgets and manage financial goals more efficiently.

First Abu Dhabi Bank (FAB) has also been taking several steps – including in the commercial banking space

In Saudi Arabia, platforms like Tamara (a buy-now-pay-later service) and Lean Technologies (a data connectivity platform) have thrived by integrating with traditional banks.

BenefitPay, a Bahraini app, facilitates near-real-time peer-to-peer payments between individuals or from individuals to businesses. Transactions volume have

Saurabh Bagrodia, Head - Financial Services, MEA, Infosys

surged 73% every year over the past three years, which in turn has enhanced financial inclusion.

This shift benefits consumers and supports the broader economic goals of diversification and innovation. It has opened up new revenue streams for banks and intensified the overall drive for modernisation and improved efficiency.

Has AI made any noticeable changes or improvements to the development or functionality of APIs?

Artificial Intelligence (AI) has significantly enhanced the development and functionality of APIs within the context of open banking. One of the most significant improvements is API specification and documentation automation. AI-powered tools can now generate API specifications from simple natural language descriptions, reducing development

AI-driven analytics allow banks to better understand customer behaviour and preferences, leading to more effective API designs that cater specifically to user needs. For example, AI can analyse transaction data to identify patterns that inform how APIs should be structured for optimal performance.

What inroads has Open Banking made into corporate and commercial banking in our region?

Open banking is making inroads into corporate and commercial banking in the Middle East, albeit at a slower pace than retail banking. By integrating thirdparty applications into their systems via APIs, banks can offer businesses tailored financial solutions in payments, cash management, lending and trade finance.

Real-time payments and enhanced treasury services are becoming more prevalent and are driven by open

ARTIFICIAL INTELLIGENCE (AI) HAS SIGNIFICANTLY ENHANCED THE DEVELOPMENT AND FUNCTIONALITY OF APIS WITHIN THE CONTEXT OF OPEN BANKING

time and ensuring consistency. This has lowered the barrier to entry for nontechnical stakeholders, allowing them to participate in the API design process.

Generative AI powered API solutions help automate API development, design, document and code generation, improving developer productivity.

AI has also enhanced API security and testing. By leveraging machine learning algorithms, developers can identify potential vulnerabilities and optimise API performance more effectively. Additionally, AI-driven analytics provide insights into API usage patterns, helping organisations refine their services and improve user experiences.

banking initiatives. APIs enable seamless integration of corporate accounts with various financial services, improving cash flow management and operational efficiency. Saudi Arabia’s Riyad Bank offers API-based solutions for corporate clients to streamline their cash management processes. FAB’s Global Transaction Banking has taken several steps in Open Finance, APIs and payments tokenisation, including Virtual Account Management APIs. HSBC UAE is another example. The bank has integrated APIs that allow corporate clients to automate payments and reconcile accounts in real-time.

Furthermore, open banking facilitates better credit assessment

and lending processes. By accessing comprehensive financial data, banks can offer tailored financing solutions to businesses, particularly small and medium-sized enterprises (SMEs), which have traditionally faced challenges in securing credit. This not only supports business growth but also strengthens the overall economic landscape. Again, Abu Dhabi Commercial Bank is a good example. The bank uses open banking to provide customised lending solutions to SMEs. By leveraging open banking data, banks can assess the creditworthiness of SMEs more accurately.

Open banking facilitates better data sharing between banks, corporates and trade platforms, reducing friction in trade finance processes. Mashreq Bank’s APIdriven instant payment solution offers real-time low-value payments for corporates.

Which parts of the overall banking and financial world are proving more resistant or challenging to the use of Open Banking and APIs?

Despite its promising outlook, several areas within the banking sector remain resistant or face challenges regarding the adoption of open banking and APIs. One significant barrier is data security concerns; customers are often apprehensive about sharing sensitive financial information with third-party providers due to fears of breaches or misuse.

Traditional banks, particularly those with legacy systems may struggle with the technological infrastructure required. Additionally, cultural resistance plays a role; many traditional banks are cautious about relinquishing control over customer data.

Regulatory harmonisation also presents challenges as different countries within the region adopt varying standards for data sharing and security protocols. Coordinated efforts among regulatory bodies are essential to build consumer trust and ensure a secure environment for data exchange.

Open Revolution

Describing how Open Banking is paving the way for new business models, Nabil Ibenbrahim Managing Director at HPS provides a clear appraisal of the role, the benefits and progress of Open Banking across our region

Currently how embedded is Open Banking in the regional banking and finance sectors?

Open Banking is becoming a cornerstone of the Middle East’s financial ecosystem, with Bahrain, Saudi Arabia and the UAE leading the charge through distinct approaches. Bahrain set the pace as a pioneer with its comprehensive regulatory framework, while Saudi Arabia has embedded Open Banking into its ambitious Vision 2030 strategy to drive financial modernisation. The UAE, by contrast, has embraced a market-driven approach, encouraging flexibility and innovation.

This evolution reflects growing demand for simple, seamless and secure financial experiences. Open Banking enables services that are now integral to modern life. However, delivering these experiences requires banks to modernise back-end systems to manage peak loads and implement scalable, API-driven solutions. Investments in composable and cloud-based architectures, coupled with open solutions and data-driven strategies, have become essential for competitiveness. Payments stand out as a key growth area, with 50% of new bank revenue expected to come from services beyond their core offerings.

Success in Open Banking also hinges on fostering vibrant fintech ecosystems underpinned by sound governance.

Ibenbrahim, HPS Managing Director

Initiatives such as Bahrain’s FinTech Bay, Saudi Arabia’s Fintech Saudi and the UAE’s FinTech Hive support startups with funding, regulatory sandboxes and accelerators, while ensuring trust, interoperability and affordability remain priorities.

Embedded financial services are here to stay, challenging traditional business models. For example, merchant-funded payment infrastructures have struggled

to meet the demand for cost-efficient, real-time payments. New real-time payments platforms have shown new business models can work. Open Banking is surely paving the way for new business models, where putting data to work will unlock fresh opportunities for both banks and Fintechs.

What do you judge as the most profound effect Open banking has had on the region’s banking market?

The most profound impact of Open Banking in the Middle East has been the accelerated shift from a productcentric approach to customer-centric experiences. Open Banking has enabled banks and Fintechs to elevate their offerings, delivering hyper-personalised, real-time services. Payments and credit are leading this transformation, with embedded solutions seamlessly integrated into commerce and lifestyle platforms. The deployment of instant payment systems across the regiongrounded in Open Banking- has driven significant innovation, encouraging Fintechs to create complementary services that simplify transactions and enhance customer engagement. These advancements have introduced new use cases and additional traffic, positioning the region among the global leaders in instant payment adoption.

This growing emphasis on seamless experiences has naturally intensified competition, pushing banks to modernise quickly. Many are now adopting composable, cloud-based architectures and data-driven strategies to stay competitive and match the agility of Fintechs. Beyond technological upgrades, embedding financial services into business verticals has forced banks to rethink their business models and structures, ensuring that core functions

Nabil

-such as moving money and providing credit-become scalable, reliable and integral to new business models.

From our experience with clients, success in Open Banking requires the right combination of technology -cloudnative and composable -and expertise to ensure a smooth transition. Partnering with those equipped to scale ecosystems and unlock the potential of data can make all the difference in enabling banks to thrive in this rapidly evolving landscape.

Has AI introduced noticeable changes or improvements to the development or functionality of APIs?

AI has significantly transformed how APIs are developed and utilised, particularly within Open Banking frameworks. By automating development and enhancing functionality, AI reduces costs, speeds up deployment and strengthens security. Tools powered by AI are especially impactful in fraud detection and risk management, allowing real-time identification and mitigation of threatscritical for maintaining trust and security, core elements of financial services. AI also enables banks and Fintechs to offer personalised solutions by analysing customer behaviour and tailoring services. For instance, APIs enhanced with AI can adjust credit offers or payment options dynamically based on real-time data, elevating the customer experience.

However, AI presents challenges alongside its benefits. It is a doubleedged sword, as sophisticated AI-driven fraud attacks are becoming increasingly prevalent. Fraud prevention systems lacking AI capabilities risk becoming obsolete. Open Banking, in this context, offers a unique opportunity. By fostering industry-wide collaboration and leveraging AI, financial institutions can pool resources, share intelligence and build unified defences against evolving threats. This combination of collaboration and technology positions Open Banking not just as a regulatory or operational shift, but as

a strategic advantage in addressing the complexities of the modern financial ecosystem.

What inroads has Open banking made into corporate and commercial banking in our region?

Open Banking is beginning to extend its influence into corporate and commercial banking in the Middle East, though retail banking still leads the way, accounting for over 80% of global use cases.

SMEs are likely to become the next focus area, given their significant presence in the region’s economy and

OPEN BANKING ENABLES SERVICES THAT ARE NOW INTEGRAL TO MODERN LIFE

the comparatively lower complexity of integration. Open Banking’s success hinges on delivering seamless, embedded experiences, and SMEs stand to benefit greatly from this model. Solutions such as real-time cash flow management, automated reconciliation and tailored financing are increasingly in demand. Embedded banking, particularly when integrated with ERP systems, is already proving its value by simplifying operations and driving efficiency.

One of the main challenges, however, is accelerating the digitisation of SMEs. Many still operate without advanced digital banking tools, leaving them underserved and less competitive. Open Banking offers a path to bridge this gap, but it requires banks to invest in modern infrastructure and digital layers to enroll more SMEs and embedding partners.

We believe the opportunity is significant. By addressing the dual needs of SME owners-both personal and business-through unified customer views, banks can bridge the user experience gap and unlock new growth opportunities.

Which areas of the banking and financial world are proving more resistant or challenging to the use of Open banking and APIs?

Open Banking has seen rapid adoption in areas like payments and financing, transforming the banking landscape in the Middle East as digital adoption accelerates. Payments, in particular, are leading the way, with account-based payments and credit scoring gaining significant traction. For example, Open Banking adoption in the GCC has fuelled a rise in account-to-account and wallet payments, with real-time transactions growing steadily in recent years, and credit solutions becoming more accessible to previously underserved segments. This momentum is expected to accelerate further with the integration of AI. AI-powered systems in payments not only enhance user experiences by automating processes and predicting customer needs but also bolster security through advanced fraud detection. AI can analyse transactional behaviours in real time, identifying anomalies and safeguarding trust-an essential pillar of Open Banking. By combining simplicity, seamlessness and robust security, these systems redefine new use experiences and use cases.

Sectors like commercial, wealth management and private banking remain more cautious, often citing privacy and control concerns. However, these reservations are likely to diminish as the benefits of Open Banking become clearer. Open Banking represents a fundamental shift in how financial services are consumed, paving the way for Open Finance to extend its reach across all financial services. It is a revolution that is here to stay, reshaping the industry for the long term.

Paradigm Shift

As Karim El Mourabet Head of Solution Consulting MEA, Universal Banking at Finastra describes, Open Banking has fundamentally changed banking, and our region has made significant progress it its adoption

Currently, how embedded is Open Banking into the regional banking and finance sectors?

The GCC region has made significant strides in embedding Open Banking into its financial ecosystem, driven largely by regulatory mandates and market demand for greater financial transparency and accessibility. Countries such as Saudi Arabia and the UAE are leading the charge with robust regulatory frameworks and strategic national initiatives that prioritise digital transformation, such as Saudi Vision 2030 and the UAE’s Smart Government strategy.

Banks across the region have embraced Open Banking to varying degrees. Some have adopted API-driven ecosystems to offer seamless financial services, while others are still in the early stages of building their digital capabilities. Fintech collaborations have become a central part of this evolution, helping traditional banks deliver customer-centric solutions that enhance financial inclusion and personalisation. This increase in activity has led to a surge in regional and global fintech companies setting up in the GCC. However, full-scale adoption is still a work in progress, with financial institutions working to align their technological infrastructure with

Karim El Mourabet, Head of Solution Consulting MEA, Universal Banking at Finastra

regulatory expectations while ensuring a frictionless customer experience.

What do you judge as the most profound effect that Open Banking has had on the region’s banking market?

The most profound effect of Open Banking in the GCC has been its role in shifting the banking paradigm from a product-centric to a customercentric model. By enabling secure data sharing, banks can reimagine banking and offer more personalised financial

services tailored to individual needs and behaviours.

This has led to collaboration between banks and fintechs, significantly enhancing customer engagement, allowing financial institutions to provide value-added services such as budgeting tools, financial wellness advice and instant loan approvals.

Additionally, Open Banking has driven financial inclusion by granting underserved populations access to digital banking services through mobilefirst experiences and alternative credit assessment methods. In countries like Saudi Arabia, the UAE and Bahrain, we have seen an increase in innovative solutions targeting SMEs and individual consumers, promoting a more inclusive financial landscape.

Open Banking regulations and technology has also enabled Banking as a Service (BaaS). This further lowers the barriers to entry into the financial services industry for fintechs, allowing them to focus on their target market and main business. We are witnessing this trend more and more in the region, most recently through our partnership with BKN301, which has enabled their customer in Egypt to offer an intuitive bill payment app—simplifying bill payments using their BaaS offering.

The Open Banking framework has also introduced new revenue streams for banks, moving beyond traditional fee-based models to more innovative, usage-based monetisation strategies through APIs.

Ultimately, the framework has paved the way for Open Finance, enabling the industry to create new financial ecosystems, drive sustainable decision-making and support positive societal change.

Has AI made any noticeable changes or improvements to the development or functionality of APIs?

Absolutely. AI has revolutionised API functionality by enhancing efficiency, security and the overall user experience. Today, AI-powered APIs can process vast amounts of financial data in real time, offering predictive analytics that help banks anticipate customer needs and offer hyper-personalised products.

One of the most significant improvements is in fraud detection and risk management. AI-driven APIs leverage machine learning algorithms to identify suspicious patterns and anomalies, providing an additional layer of security.

solutions efficiently. As AI continues to evolve, we can expect APIs to become even smarter, more intuitive, and crucial to delivering next-generation banking services.

What inroads has Open Banking made into corporate and commercial banking in our region?

While Open Banking initially focused on retail banking, it is now making notable inroads into corporate and commercial banking across the GCC. Businesses are increasingly recognising the value of Open Banking APIs in optimising cash management, streamlining payment processing and enhancing treasury functions.

THE MOST PROFOUND EFFECT OF OPEN BANKING IN THE GCC HAS BEEN ITS ROLE IN SHIFTING

THE BANKING PARADIGM

FROM A PRODUCT-CENTRIC TO A CUSTOMERCENTRIC

MODEL

Additionally, AI enables more intelligent decision-making processes, such as automated credit scoring, underwriting, and real-time compliance checks.

Another major development is the integration of generative AI (Gen AI) in customer service APIs. Virtual assistants and chatbots powered by Gen AI are now capable of providing instant responses to customer queries, offering financial advice, and even helping banks with internal operational efficiencies. Use cases such as next best offers and reducing customer churn through AI have been at the forefront of bank’s investments. These AI-enhanced APIs allow institutions to deliver seamless, round-the-clock services while reducing operational costs.

AI has also streamlined API lifecycle management, making it easier for banks to test, deploy and scale their digital

Corporate clients demand real-time access to financial data and insights that allow them to make informed strategic decisions. Open Banking enables businesses to integrate their financial data across multiple banks and platforms, providing a consolidated view of their accounts, cash flows and financial obligations. This level of transparency and control is critical for effective financial planning and risk management.

Additionally, Open Banking is fostering innovation in trade finance and supply chain management. Through API connectivity, corporates can now automate processes such as invoice financing, procurement, and payment reconciliation, leading to improved operational efficiency and cost savings.

In the SME segment, Open Banking is proving to be a game-changer by

facilitating access to credit through alternative data sources. By analysing transactional data via APIs, financial institutions can offer tailored lending solutions to businesses that may have traditionally struggled with access to credit due to a lack of collateral or formal credit history.

Which parts of the overall banking and financial world are proving more resistant or challenging to the use of Open Banking and APIs?

Despite the clear benefits of Open Banking, certain segments of the financial industry remain hesitant to fully embrace it. One of the biggest challenges is within traditional banking sectors that rely on legacy systems and established workflows. Transitioning from these systems to an Open Banking model requires significant investment in technology, talent and a cultural shift towards more open collaboration with fintechs and third-party providers.

Another key challenge lies in regulatory compliance. Banks operating in jurisdictions with stringent data protection laws may face hurdles in implementing Open Banking solutions that align with both regulatory and customer expectations. This has led to some banks taking a more conservative approach, implementing Open Banking in phased rollouts rather than full-scale adoption.

Furthermore, cultural and operational resistance within banks, particularly in segments that prioritise relationshipbased banking models, can slow down Open Banking adoption. Relationship managers and advisors who have traditionally managed high-value clients may perceive automation and data-sharing as a threat to their roles, highlighting the need for proper change management and education within organisations.

Ultimately, overcoming these challenges requires a concerted effort between regulators, financial institutions and fintech partners to build trust and promote the long-term benefits of Open Banking.

Unique Partnership

Discussing their transformative journey, future strategies and unique approach to fostering growth in the UAE and beyond with MEA Finance, Sriranga Sampathkumar VP and General Manager – Middle East and Africa, Infosys Ltd., in this exclusive interview with Michael Chan Chief Executive Officer, Zand Bank, asks him about their innovative approach and fintech-driven vision, and how Zand is redefining banking with cutting-edge technologies like AI, blockchain and cloud

Michael Chan, Chief Executive Officer, Zand Bank

Sriranga: Could you briefly introduce Zand Bank and your journey towards becoming the CEO of the bank?

Michael: Zand Bank is a unique player in the digital banking space. We are the UAE’s first fully licensed digital bank empowering corporate, institutional and wealth clients to unlock new opportunities, foster sustainable growth and drive positive impacts in the digital economy.

Sriranga Sampathkumar, VP and General Manager – Middle East and Africa, Infosys Ltd

We are fortunate to have a strong and diverse group of shareholders, including Al Hail Holding and international companies like Franklin Templeton and global entrepreneurs like Mohamed Alabbar.

Our proposition goes beyond traditional banking models. We leverage advanced technologies such as AI and blockchain to transform the financial landscape. This innovation is crucial,

especially in the UAE, where the financial market is highly competitive with 60+ banks. We aim to carve out a niche by bridging traditional finance (TradFi) with decentralised finance (DeFi).

As for my journey, I’ve had the privilege of living and working in multiple countries. I’ve held roles in global markets, tech, corporate development and digital initiatives, which have equipped me with the tools to bring a business- and techdriven mindset to Zand Bank, setting the stage for our success in the UAE.

Sriranga: Zand has been carving a unique niche in the market. Can you talk about evolving into an AI-led digital bank? Michael: We see ourselves as a fintech – but with a banking license, and this is what sets us apart. Our focus is not just on capturing the market but addressing the real shortcomings in the ecosystem. The UAE has been incredibly successful in attracting investments, wealth and fintech companies, providing them with a robust environment to grow locally, regionally and globally. However, the necessary support is often missing in the traditional banking landscape. That’s where we come in – building a supportive ecosystem for startups and corporations in the digital space.

We have been on this transformative journey with AI for over a year now. For instance, we have been launching various AI initiatives within Zand, later expanding to our clients. Our approach has been to leverage a mix of technologies, including blockchain and AI to really push the boundary on what banking can be.

I’d also like to highlight the role of Infosys Finacle in this transformation. The team has demonstrated a strong vision in leveraging AI to address pain points not just in banking but also in fintech.

Their open architecture approach plays a crucial role in enabling and supporting the broader ecosystem.

Sriranga: How is Zand approaching the cloud evolution, and what impact does it have on its operations?

Michael: At Zand, we’ve embraced the cloud from day one. We believe this cloudfirst approach is essential not only for our growth but for the broader evolution of the banking sector.

One of the biggest advantages of being on the cloud is the ease with which data can be utilised for AI modeling. When data resides in the cloud, it becomes much simpler to apply advanced AI engines and large language models to drive faster innovation and growth. Conversely, hosting data elsewhere often requires extensive integrations, which can slow down processes and increase complexity.

Sriranga: How did you select your cloud partner, and what criteria were important in your decision-making?

Michael: The decision to choose a cloud partner involves addressing fundamental concerns such as data security, privacy, scalability and control.

At Zand, we conducted an extensive study to evaluate these factors and chose to go 100% cloud from day one, ensuring that we were prepared to overcome these challenges effectively. With traditional infrastructure, scaling up often requires significant reinvestment, which can be time-consuming and expensive. The cloud eliminates this limitation, offering seamless scalability and flexibility. A critical factor for us was finding a partner who could meet our pace of innovation and share our vision for rapid growth.

Security was another key criterion. We were impressed by the work Finacle has done to ensure a secure and cloudagnostic platform. Additionally, the cloud enables faster time-to-market, which is vital in today’s competitive banking environment.

Sriranga: Talking about wallets, Zand is pioneering in this area. This is a space where we also hear about custody management solutions. How does Zand see its role in this space?

Michael: The digital wallet space is evolving rapidly, with telcos and traditional banks increasingly entering the arena. At Zand, we see ourselves uniquely

such as achieving full migrations within just 100 days — a testament to the seamless collaboration and technological alignment.

Finacle’s modular architecture and deep understanding of Zand’s needs have been pivotal to our growth. Their API-first approach aligns perfectly with Zand’s 100% cloud-based operations.

WE AIM TO CARVE OUT A NICHE BY BRIDGING TRADITIONAL FINANCE (TRADFI) WITH DECENTRALISED FINANCE (DEFI)

positioned as a bridge between TradFi and DeFi, offering both fiat wallets and digital asset wallets. Our vision extends to becoming a leader in this space within the MENAT region.

In today’s world, there’s a growing need for secure custody of tokenised and digital assets. This shift is already gaining traction in regions like Europe and the Americas, and Zand aims to lead the charge in MENAT.

In this regard, we are creating an ecosystem of digital assets, Zand obtained an approval from the Virtual Asset Regulatory Authority (VARA) to become the first UAE bank to provide institutional-grade digital asset custody services under its own banking license for our corporate and institutional clients.

Going hand-in-hand with this development is Zand’s soon to be launched AED-backed stablecoin.

Sriranga: Please share your experience on the collaboration between Zand Bank and Finacle, and how has it benefited Zand in the market?

Michael : The collaboration between Zand Bank and Finacle thrives on shared vision and agility. This synergy has enabled remarkable milestones,

The partnership has enhanced our scalability, flexibility and speed to market, giving us a competitive edge.

Sriranga: Let’s wrap with some rapidfire questions. What’s the top two apprehensions that you had with cloud? Michael: Data security and data privacy.

Sriranga: What is the most significant advantage that Zand got in the market with Finacle Next Gen platform? Michael: I believe it’s scalability, flexibility and time to market.

Sriranga: What do you think are the biggest myths about modern technologies?

Micheal: Bankers believe they are complicated, costly, but in fact, they’re not.

Sriranga: What has been a key success factor for Zand – AI or blockchain?

Micheal: I think our key success factor is that we understand the client problems. We are trying to use innovations and technologies to solve these problems.

Sriranga: I have seen this first-hand, so I agree. Thanks a lot Michael for taking time out for such an insightful and engaging discussion.

MEA Finance & Swift, Leaders in Banking Technology and Payments Egypt Summit

The Egyptian payments sector has experienced substantial growth in recent times and the country’s banks and payment providers are shifting focus by investing in advanced technologies, reimagining business models and fostering new partnerships. The MEA Finance and Swift, Leaders in Banking Technology and Payments in Egypt Summit, and exclusively supported by Mindgate Technologies, debated these and other developments in this major regional nation

The Egyptian banking sector is undergoing a significant transformation, fuelled by technological advancements, regulatory changes and evolving customer demands. Fitch Ratings said that the sector’s deficit plummeted from a peak of $17.6 billion in January 2024 to a mere $130 million in September, driven by a surge in capital inflows.

“The capital inflows were bolstered by the Ras Al Hekma transaction, robust remittance flows and a significant return of non-resident investors to the treasurybills market, which strengthened the external balance sheets of Egyptian banks,” said Fitch.

The Egyptian financial services sector, including banking and payments,

is inevitably moving towards a digitally transformed future. From cloud computing to generative AI (GenAI), innovative technologies such as those delivered through chatbots are revolutionising the country’s banking sector.

Meanwhile, historically a cornerstone of banking, payments remain a critical function that fuels the rise of digital economies and spearheads innovation within the financial services industry. Payment interactions represent the most common point of contact between banks and their customers, contributing to an average of 40% of bank revenues.

“Consumers’ buying journeys are increasingly starting with digital payments, for example, with buy now, pay later (BNPL) platforms and offer marketplaces, in addition to using more forms of digital payments more often,” according to McKinsey.

Digital payments are playing a growing role in influencing shopper decisions, highlighting the need for payment service providers to engage consumers earlier in their shopping journeys.

For banks, the dynamic shift in payments is both a threat and an opportunity. Egyptian banks are setting themselves apart by investing in compelling new value propositions that focus on innovative payment methods to meet customers’ evolving needs and expectations.

MEA Finance , in partnership with SWIFT, hosted the Leaders in Banking

Technology and Payments in Egypt

Summit on the 26th of November at the Renaissance Cairo Mirage City Hotel in Cairo. The event brought together senior leaders from the banking, finance and technology industries to discuss the evolving trends within Egypt’s payments and financial services sector.

Egypt is on the cusp of a banking revolution. Though digital transformation in the country’s banking sector has been slower compared to countries such as Saudi Arabia and the UAE, it has made substantial progress by licensing new digital banks and establishing a national payment system.

The global drive towards faster, more secure and transparent cross-border transactions is fuelling continuous innovation within the payments industry to enhance the customer experience. The G20, in its 2020 Roadmap for Enhancing Cross-Border Payments, established a 2027 deadline for reducing costs and improving the speed, accessibility and transparency of international transactions.

Egyptian banks are expanding their service offerings and actively exploring how innovative technologies can improve their business models while collaborating with other financial institutions to enhance cross-border payment experiences and reduce costs for their customers.

Marianne Demarchi, Chief Executive for Europe, Middle East & Africa at Swift, highlighted in her welcome remarks that Swift, as a cooperative comprising 11,500 financial institutions and corporations across 200 countries, is essential in facilitating smooth and efficient global financial transactions.

“We handle the equivalent of the world’s GDP every three days, underscoring the vital need for robust, secure systems that support rapid, seamless transactions,” said Demarchi.

LEADERS IN BANKING TECHNOLOGY

Yet, we understand that ongoing innovation is crucial. Collaboration with regulators, fintechs and other industry stakeholders is key to addressing current challenges and fully realising the potential of global finance.”

Demarchi underscored that collaboration in the financial service sector is paramount; “nothing can be achieved independently, neither by Swift nor by individual banks.”

“We’ve made significant strides. At Swift, we’ve transitioned from point-topoint messaging to a true end-to-end transaction management approach. We’ve rolled out services that enable fast, secure, predictable and transparent transactions,” she said, adding that while there is still much to do, the progress is worth noting.

Demarchi noted that banks implementing ISO 20022 are experiencing increased operational efficiency and enhanced fraud detection capabilities, driven by richer, more structured data. Traditional payment infrastructures in the Middle East and North Africa are modernising, with ISO 20022 being adopted as the standard, even for instant payment systems.

“With just one year left until the full transition to ISO 20022, I urge all participants to prioritise readiness. The new standard will deliver significant advantages, such as improved operational efficiency, enhanced data quality and new avenues for fraud detection.”

The cross-border payments puzzle

The volume of cross-border payments is experiencing sustained growth, supported by increased global trade, consumer remittances, e-commerce and tourism. By supporting economic growth, international trade, global development and financial inclusion, faster, cheaper and more transparent cross-border payment services have the potential to improve lives worldwide significantly.

Moderated by Onur Ozan, Managing Director / Regional Head - MENAT, Caucasus & Central Asia at Swift, the first panel of the event, titled G20 Targets and Industry Tactics: Building a Complete Picture for Cross-Border Payments,

highlighted how improved cross-border payment systems will bolster Egypt’s economic potential and deliver clear and tangible benefits to the country.

The discussion included the participation of Marianne Dimarchi, Chief Executive of Europe, Middle East, and Africa at Swift; Ossama El Naggar, Group Head – Global Transaction Banking at Banque Du Caire; Soha Ali, Executive Director and Senior Country Representative, Head of Financial Institutions Group Egypt and North Africa at JP Morgan Chase Bank and Sherif Zaki , Director, Country Head of Global Payments Solutions at HSBC.

Ozan initiated the panel discussion by noting that the G20, under Saudi Arabia’s presidency in 2020, included “enhancing the efficiency of cross-border payments” as a key agenda item.

“The Financial Stability Board (FSB) and the Committee on Payments and Market Infrastructures (CPMI) have been tasked with leading this initiative. However, achieving these goals requires strong collaboration between the private and public sectors,” Ozan added.

Ali echoed Ozan’s sentiments, emphasising the critical role of collaboration and acknowledging that G20 targets and goals cannot be achieved in isolation. “The banking sector, as a whole, bears significant responsibility for driving progress toward the G20 objectives by focusing on four key trends.”

She underscored that the banking industry must prioritise four key trends to fulfil the G20 goals, including optimising data, prioritising resilience and security, embracing artificial intelligence (AI) and machine learning and modernising payments infrastructure.

While the global value of cross-border payments is projected to hit $250 trillion by 2027, according to the Bank of England, the majority of consumers and small-tomedium-sized enterprises still encounter slow, expensive and uncertain crossborder payment processes.

– Marianne Demarchi

The evolving landscape is driven by shifting consumer behaviours and

heightened expectations, with consumers now demanding a seamless, transparent and 24/7 real-time experience for both domestic and cross-border transactions.

When asked about the latest payment progress and G20 target achievement, Zaki said the Egyptian payment industry is on the right track.

“The Egyptian payment landscape has undergone a remarkable transformation in recent years, driven by regulatory efforts and a focus on enhancing the customer experience,” Zaki added.

“The domestic payments landscape in Egypt has seen remarkable progress in terms of speed, accessibility, interoperability, cost efficiency, security and transparency. The advancements collectively enhance the overall payment experience, creating a more inclusive and efficient financial ecosystem.”

Cross-border payments are an integral feature of today’s world. They play a vital role in keeping the economy healthy and stable. The payments typically require three to five days of end-to-end processing before reaching the intended recipient and the shortcomings are compounded by high costs, lengthy settlement times and opaque processes.

THE BANKING

“Cross-border payments have always required significant changes, but the COVID-19 pandemic and its associated uncertainties served as a stark wake-up call,” said Ali.

However, G20 members’ Roadmap for Enhancing Cross-Border Payments seeks to modernise the payments infrastructure by addressing misaligned payment messaging standards and the divergent regulations between jurisdictions.

On the role of Swift in the realisation of G20 goals, Dimarchi emphasised that the G20 objectives, with their clear and detailed quantitative targets, provide a crucial framework for Swift to contribute

SECTOR, AS A WHOLE, BEARS SIGNIFICANT RESPONSIBILITY FOR DRIVING PROGRESS TOWARD THE G20 OBJECTIVES BY FOCUSING ON FOUR KEY TRENDS

– Onur Ozan

to the development of a more efficient and inclusive global payments landscape.

Dimarchi highlighted that there has been a significant focus on G20 objectives.

“Sibos 2024 in Beijing witnessed a marked increase in discussions around the G20’s international payments objectives, a significant departure from previous years where the focus was primarily on central banks and Swift,” she said while noting that several banks are actively engaging with Swift to align their operations with G20 targets.

“Our network boasts high efficiency, with 90% of transactions processed within an hour, surpassing the 75% benchmark. The rapid processing is consistent across all geographies,” said Dimarchi.

However, challenges often arise within beneficiary banks, such as internal processing delays, batch processing, market infrastructure limitations, currency controls and additional compliance checks.

To enhance speed, traceability and transparency, Dimarchi said Swift has

LEADERS IN BANKING TECHNOLOGY AND

implemented several solutions, including Swift GPI for Wholesale Payments, Swift GPI for Low-Value Payments (Swift Go) and Data Pre-Validation.

Progress towards the Roadmap includes the ongoing migration to ISO 20022. The transition introduces a common, interoperable standard for payment message exchange, paving the way for greater efficiencies and enhanced client services. The introduction of ISO 20022 has already displaced many legacy payment messaging schemes and this process is accelerating.

Banque Du Caire’s El Naggar said that regional cross-border payment initiatives, such as Buna and AFAQ, along with global models, such as PayNow-UPI collaboration, provide valuable lessons for overcoming payment fragmentation and building a more efficient and interconnected global payment ecosystem.

“Cross-border payment systems are crucial because different jurisdictions have varying policies and rules. The initiatives play a significant role in advancing the ecosystem by bringing countries together to provide more straightforward methods of transacting,” said El Naggar.

The G20 economies reaffirmed the United Nations Sustainable Development Goal and set a target of no more than 3% as the global average cost for sending a $200 remittance by 2030, with no corridors exceeding 5%.

For Egyptian banks, enhancing crossborder payment services presents an opportunity to expand market share in a dynamic and competitive environment. It strengthens relationships with existing clients, supports economic growth and promotes financial inclusion.

Reimagining customer experience

The contemporary banking landscape is characterised by a dynamic and competitive environment driven by hyperconnected customers with access to extensive information about competing offerings, resulting in a decline in traditional customer loyalty.

THE DOMESTIC PAYMENTS

LANDSCAPE

IN EGYPT HAS SEEN REMARKABLE PROGRESS IN TERMS OF SPEED, ACCESSIBILITY, INTEROPERABILITY, COST EFFICIENCY, SECURITY AND TRANSPARENCY. THE ADVANCEMENTS COLLECTIVELY ENHANCE THE OVERALL

MORE

PAYMENT EXPERIENCE, CREATING A

INCLUSIVE AND EFFICIENT FINANCIAL ECOSYSTEM

– Sherif Zaki

Mennat Barakat, Consulting Director, PwC Middle East, moderated the following discussion - Breaking Barriers: Elevating Customer Experience in Banking and Payments. The panel had the participation of Tushar Gaur, Vice President, MEA Sales and Business at Mindgate; Heba Hisham , Global Sales Solutions – Egypt and Jordan at Citi; Nisreen Matarweh , Country Director, Swift and Ghadeer Ewaida , Head of Treasury Services, Misr Digital Innovation.

From her experience in corporate banking, Citi’s Hisham observed that client expectations are highly dynamic and not uniform across the board. Over the past 15 years, she has witnessed a significant evolution in client needs, driven mainly by individual progress in digital transformation.

“Early in their digital transformation journey, clients typically seek straightforward channels for executing payments. However, their needs evolve rapidly. Currently, a significant portion of corporate clients in Egypt are prioritising system integration, such as the aggregation of accounts across multiple banks into a single platform,” said Hisham.

“As clients progress, demand for APIs increases. While live, API adoption is not yet universal among corporate clients. Going forward, there will be a heightened need for greater account

visibility and the ability to execute crossbank payments from a single platform,” she explained.

Hisham projected that the subsequent phase will likely involve the integration of more advanced technologies, such as AI and the cloud, further enhancing corporate customers’ digital capabilities and providing deeper insights.

Banking customers demand faster, smoother and more personalised experiences, necessitating a shift towards digital-first banking practices. Customer experience in the financial services sector has emerged as a strategic differentiator for banks and payment solution providers, with organisations prioritising customer-centricity demonstrating superior market performance.

Swift’s Matarweh said customer expectations within the financial services sector are rapidly evolving and driven by a dynamic ecosystem, emerging industry norms and the rapid pace of technological innovation. “The rise of digital banking and the increasing prevalence of digital transactions are significantly shaping these trends.”

Matarweh underscored that expeditious processing is a universal customer expectation and banking customers across all segments demand swift transaction completion. She also highlighted that transparency

is paramount – customers seek realtime visibility into the status of their payments and the ability to track their progress seamlessly.

While these are common expectations, specific concerns vary across segments. Cost-effectiveness is a major concern for SMEs and retail consumers, whereas security remains a top priority for large corporate customers.

“Customers now expect their funds to be transferred with the same ease, speed and traceability as tracking a parcel or shipment. The expectation for heightened transparency and operational efficiency has fundamentally reshaped how crossborder transactions are processed and monitored,” said Matarweh.

To maintain a competitive edge in the market, Egyptian banks must prioritise

CROSS-BORDER PAYMENT SYSTEMS

ARE CRUCIAL BECAUSE DIFFERENT JURISDICTIONS HAVE VARYING POLICIES AND RULES. THE INITIATIVES PLAY A SIGNIFICANT ROLE IN ADVANCING THE ECOSYSTEM

BY BRINGING COUNTRIES TOGETHER TO PROVIDE MORE STRAIGHTFORWARD METHODS OF TRANSACTING

– Ossama El Naggar

personalised experiences across all customer touchpoints to enhance customer relationships and drive better outcomes.

“Personalisation is no longer a luxury in banking; it’s a necessity. By harnessing the power of data analytics, banks can gain deep insights into customer behaviour and preferences. The initiative empowers financial institutions to offer highly tailored financial solutions – from personalised product recommendations to proactive financial guidance,” said Ewaida.

Ewaida emphasised that the customercentric approach fosters stronger relationships, enhances customer satisfaction and ultimately drives a significant competitive advantage in today’s evolving market.

Modern banking customers seamlessly navigate a blended world of in-person, digital and virtual interactions. Their lifestyle habits are increasingly motivated and directed by the speed and simplicity of digital services that are at their disposal; the same is true of how they want to bank.

Gaur highlighted the need for a dynamic and collaborative approach to navigating the evolving financial landscape. “The financial landscape demands constant evolution and adaptation across the entire ecosystem, including regulators, banks and fintechs. Striking a balance between adopting new technologies and adapting existing systems is crucial for progress,” he said.

Giving Swift’s journey as an example, Gaur said that Swift has spent nearly five decades evolving into a trusted global financial infrastructure.

LEADERS IN BANKING TECHNOLOGY

“Swift’s success is attributed not only to technological advancements but to its collaborative approach. Instead of operating independently, Swift actively engages with regulators across various economies, fostering trust and ensuring the seamless flow of financial information worldwide.”

Consumers’ demand for hyperpersonalised experiences is growing, mirroring the pace of technological advancement in the financial services sector. The surge has coincided with an explosion of both data availability and fintechs specialising in empowering incumbents to deliver tailored engagements, finely tuned audience targeting and dynamically optimised marketing content and creatives.

To fully leverage personalisation, McKinsey advises banks and payment providers to identify and prioritise use cases with the highest value potential, rapidly activate and optimise personalisation initiatives at scale, develop an agile operating model for personalisation and continuously build and enhance personalisation capabilities.

Swift’s Cem Soydemir , Head of Payments, Go-To-Market, MEA, hosted the In-Conversation With session featuring Shaheen Budhrani, Strategic Partnerships Director at Thunes.

Soydemir opened the session by giving insight into the Pay to Wallets initiative

CUSTOMERS NOW EXPECT THEIR FUNDS TO BE TRANSFERRED WITH THE SAME EASE, SPEED AND TRACEABILITY AS TRACKING A PARCEL OR SHIPMENT. THE EXPECTATION FOR HEIGHTENED TRANSPARENCY AND OPERATIONAL EFFICIENCY HAS FUNDAMENTALLY RESHAPED HOW CROSSBORDER TRANSACTIONS

ARE PROCESSED AND MONITORED

– Nisreen Matarweh

that allows individuals to use wallets to seamlessly receive cross-border payments by leveraging the existing connections of financial institutions through Swift.

“To bring this initiative to fruition, we have partnered with key aggregators TerraPay and Thunes to execute and operationalise it. I am pleased to announce that this solution is now live with both partners,” he added.

Soydemir highlighted that Swift is actively working in collaboration with its valued partners to translate key themes such as interoperability, financial inclusion, the crucial role of fintech collaboration and the importance of strong partnerships into tangible realities.

Quizzed about the role of Thunes as an aggregator in cross-border payments, Budhrani said that Thunes acts as a ‘smart superhighway’ for cross-border payments, offering financial institutions the flexibility to send funds to 130 markets and disburse them in 80 currencies across various channels, including bank accounts, mobile wallets, cash pick-up locations and cards.

“Our network operates on a foundation of direct connections, spanning all 130 markets we serve, ensuring realtime disbursements with complete transparency, encompassing both the transaction process and pricing,” he said, adding that Thunes guarantee the precise amount reaches the intended beneficiary.

For individuals, SMEs and corporates alike, Budhrani stressed that an aggregator streamlines the digital crossborder payments journey.

“By encompassing a wide range of payout methods and use cases, aggregators facilitate a seamless end-to-end experience, from payment initiation to settlement. This simplification significantly reduces the complexity and resource demands that financial institutions would otherwise face,” he added.

Explaining Thunes’ implementation of wallet solutions, Budhrani highlighted how mobile wallets have revolutionised financial services in emerging markets,

offering innovative experiences that have effectively bypassed traditional banking systems.

“Mobile wallets have revolutionised financial inclusion for the underbanked and unbanked, offering comprehensive digital experiences that enable comprehensive financial management within a mobile or digital ecosystem,” he said.

“The mobile wallet service stands in stark contrast to traditional banking systems that often fail to adequately serve these populations. By providing access to global financial markets, mobile wallets empower individuals previously excluded from the formal financial system.”

Egypt’s payments revolution Egypt’s payments landscape has undergone a profound and groundbreaking transformation over the past decade, evolving along multiple fronts. Notably, advancements such as digital wallets, QR codes and mobile

money solutions have significantly enhanced payment accessibility, particularly driving financial inclusion in developing economies.

Nisreen Matarweh, Country Director, Swift, moderated the panel named New Payments Horizons in Egypt : Empowering Payments Ecosystems with Technology . The discussion included Mohamed Fouad , Head of Centralised Operations at Emirates NBD; Amr Soliman , Founder and Executive Chairman, Board Member, & Chair of the Economic and Environment Committees for the National Council on Women at eVision 360; Mohamed Shawky , Deputy General Manager, Commercial at Egyptian Banks Company (EBC) and Rania Khera, Head of Incoming Transfers at QNB – Egypt.

In response to a question about the appetite for innovative technology in Egypt’s payments industry, QNB – Egypt’s Khera said the Egyptian payments landscape is undergoing a significant transformation, driven by advancing

technology, evolving customer needs

“We’re witnessing a surge in mobile wallets and digital payments, with their popularity steadily increasing. Real-time instant payments have revolutionised domestic money transfers, making transactions significantly faster and more seamless,” added Khera.

She further underscored that the adoption of open banking through API technology has ignited significant enthusiasm for innovation, paving the way for more advanced and personalised services and solutions tailored to the needs of Egypt’s population.

“Introducing new digital tools and solutions in Egypt will not only benefit the large underserved and underbanked population, but also integrate them into the formal financial system, fostering greater financial inclusion across the country,” said Khera.

The country’s payments space is poised for significant growth in 2025, driven by a combination of government initiatives, increased adoption of digital payment solutions and advancements in financial technology. The Central Bank of Egypt (CBE) has played a pivotal role in fostering a cashless economy through policies promoting mobile wallets, QR code payments, and digital banking services.

The performance of Egypt’s payments industry shows ongoing change with opportunities for growth and margin improvement across services and products. The country’s payments space has evolved over the years, driven by the

LEADERS IN BANKING TECHNOLOGY AND

digitalisation in the financial services sector, which is expected to continue fuelling disruptive business models in the industry.

Shawky concurred with Khera that Egypt has made significant strides in technology adoption over the past decade while noting that it is crucial to remember that technological advancement is an ongoing process.

He emphasised that there will always be newer and more advanced technological solutions in the Egyptian financial service sector.

“The accurate measure of success isn’t simply the presence of technology, but its effective integration into people’s lives. We must evaluate how technology has been adopted, what new possibilities it has unlocked and how it has enhanced the overall ecosystem,” said Shawky.

“Reflecting on my journey with EBC since 2011, I’ve witnessed a remarkable transformation. As the National Switch, we’ve introduced numerous innovative solutions to the market. However, in the early stages, while banks readily adopted these technologies, consumer uptake was slower.”

While improving cross-border payments remains a priority, there is continued focus on enhancing domestic payment ecosystems. The shift towards digitisation of a traditionally paper-reliant payments market has already made significant strides.

Meanwhile, the pursuit of convenience in the payments sector has been a catalyst for innovation. The payments landscape is ripe for artificial intelligence (AI) transformation, with automation, advanced customer service, and increased service value as key use cases.

From a banking perspective, Soliman highlighted that incumbent banks are large institutions with significant considerations when adopting new technologies, especially regarding compliance, fraud prevention and existing systems. “While the cautious approach is justified, it often results in slower adoption

PERSONALISATION IS NO LONGER A LUXURY IN BANKING; IT’S A NECESSITY. BY HARNESSING THE POWER OF

DATA ANALYTICS,

BANKS CAN GAIN DEEP INSIGHTS INTO CUSTOMER BEHAVIOUR AND PREFERENCES

– Ghadeer Ewaida

compared to fintechs, which move much faster,” he said.

Soliman argued that incumbents are better positioned to embrace new technologies – they have the financial resources, established customer bases, and business capacity. “However, their reluctance to step out of their comfort zones has allowed fintechs to capture market share that banks could have dominated.”

“Banks must overcome their reluctance to innovate and collaborate more effectively with fintechs to meet market demands. By embracing new technologies and updating regulations, they can bridge the gap and stay competitive in a rapidly evolving financial landscape,” added Soliman.

AI holds the potential to significantly revolutionise the payment experience by offering personalised solutions, enhanced security and streamlined digital transactions. Businesses and consumers alike are reaping the rewards of advanced payment technologies, experiencing more efficient and secure payment processes.

Emirates NBD’s Fouad, while acknowledging some validity in Soliman’s points, emphasised the critical challenges hindering the banking sector’s progress in adopting innovative technologies.

“One major challenge is investment cost. Banks face numerous mandates from regulators (e.g., central banks), global payment schemes (e.g., Swift, Mastercard, Visa), and, in the case of regional banks such as Emirates NBD, additional

requirements from headquarters and local regulators,” said Fouad.

“Balancing these mandates while prioritising initiatives requires careful planning. Banks must create a roadmap, considering variables such as due dates, business opportunities and market demands, and then allocate budgets accordingly.”

Soliman said while Egyptian banks have the potential to innovate, they face significant hurdles, including high investment costs, capacity constraints and staff resistance to change. He explained that addressing these challenges requires strategic planning, effective communication and a focus on upskilling and redeploying talent to align with the evolving needs of the industry.

Payments are evolving towards instant, frictionless and seamless integration within customer journeys, effectively becoming “invisible.” While payment technologies will continue to revolutionise the industry, incumbent payment service providers in Egypt hold a pivotal role in shaping the future.

Egypt’s payments industry has experienced substantial growth in recent decades, rapidly embracing new technologies to expand its service offerings. Industry experts participating in the MEA Finance-SWIFT summit projected that the transformative trend would persist, driven by evolving customer expectations and a supportive regulatory landscape, exemplified by the central bank’s initiatives such as regulatory sandboxes.