Spokesperson: Fernando Castanheira, CIO at Riverbed Technology
The Middle East banking landscape has undergone profound transformation over the last decade – from the rise of FinTech and crypto assets to the emergence of programmable Web3 and, more recently, the surge of artificial intelligence (AI). With AI alone projected to contribute up to US$320 billion in economic value to the Middle East by the end of this decade, banks find themselves navigating both challenges and opportunities at unprecedented speed. In the region, where economies are diversifying rapidly, this technological evolution could prove pivotal in shaping the future of finance.
Across financial services, machine learning is already making waves. From replacing human judgment in underwriting to assessing risk in the payments industry and even providing customers with conversational interfaces in mobile banking apps, the application of AI is as broad as it is transformative. But for banks in the Middle East, how can they not only keep pace with these changes but also capitalise on the exciting advancements? Here are some key strategies.
Meet Your Peers
The rise of blockchain platforms like Ethereum, Polygon, and Solana has been revolutionary, with over 1.3 billion addresses—the blockchain equivalent of bank accounts—now in existence. This decentralisation has allowed FinTechs and neobanks to challenge traditional banking giants, with venture capital flowing into the FinTech sector at a staggering rate of $4 billion per month. In the Middle East, neobanks such as UAE’s YAP and Saudi Arabia’s STC Pay have already made significant inroads. As the financial landscape evolves, established banks must embrace the opportunity to adapt or risk falling behind.
Partner Up
Collaboration is key. The scale of transformation required to stay competitive cannot be tackled alone. Strategic partnerships with technology providers are essential for banks to keep up with the changing pace of innovation. In the region, we’ve seen partnerships like Saudi National Bank collaborating with FinTech startups and Dubai’s Mashreq Bank embracing tech giants to offer integrated digital solutions. These alliances are vital for developing new customer experiences and bolstering operational efficiency.
Explore New Platforms
Beyond partnerships, banks need the right platforms to enhance their visibility and understanding of customer interactions. In a hyper-connected region like the Middle East, where mobile banking adoption is among the highest globally, digital experience is everything. According to Riverbed’s Global Digital Employee Experience (DEX) survey, 98% of financial services leaders agree that digital experience is critical for staying competitive. Banks that succeed will be those that provide seamless, efficient, and innovative services through their digital platforms.
Keep Your Customers ‘Appy’
From the user’s perspective, the technological advancements are game-changing. They now have the ability to send money through social media messaging apps, save via payment apps, and manage their finances through all-encompassing apps. Digital banking is now the preferred banking channel and so this integration is critical. Banks must not only offer an easy-to-use app, but they must ensure that the performance of this is consistently up to the highest standards. The most impressive interface won’t undo the negative impact of poor end-user experience. Also consider personalised recommendations, perhaps facilitated by AI-driven robo-advisors. The alternative? Customers will turn to competitors who can.
Delve Into Your Data
At the heart of providing these seamless digital experiences is data. Middle East banks need to collect, analyse, and extract actionable insights from full-fidelity data across all platforms. Whether it’s understanding customer spending habits or identifying opportunities for cost savings, having great AI outcomes depends on having great data. With clear benchmarks in place, banks can ensure they consistently meet—and exceed—expectations.
Invest in Intelligent Monitoring
An AI observability platform is essential for monitoring data and establishing a baseline for what ‘normal’ looks like for both employees and customers. With real-time monitoring and data-driven insights, banks can make informed improvements, reduce downtime, and enhance overall customer experience, all while staying ahead of the competition. The region’s tech-savvy consumers demand instant gratification; the ability to respond to problems before they escalate is a major competitive advantage.
Automate, Automate, Automate
Automation is a game-changer. By implementing platforms that automatically optimise workflows—whether it’s through addressing service desk issues or fixing bugs—banks can increase productivity and improve app functionality. For Middle East banks, where operational efficiency is critical in the race to digitise, automation can significantly reduce costs while improving customer satisfaction.
Review Your Resources and Make Smart Choices
Resource optimisation is a must in an era of cost-conscious banking. By gaining insight into which resources are being utilised and where efficiencies can be made, banks in the Middle East can make smarter decisions. Do they need as many physical branches when digital banking is taking off? Could software licenses be better managed? These considerations help banks to operate more efficiently and sustainably, aligning with the region’s focus on balancing growth with environmental impact.
Monitor Trends and Patterns
AI’s predictive capabilities extend beyond understanding current trends to forecasting future ones. In a region where consumer spending patterns often fluctuate with seasonal or cultural events like Ramadan, banks can leverage AI to allocate resources effectively, ensuring smooth app performance and superior customer service during peak times.
Protect Your Budget and Our Planet
Investing in new technologies can be costly, but when applied intelligently, they offer the potential for significant savings. By utilising data-driven insights to improve operational efficiency, banks can increase ROI while also reducing their carbon footprint. This aligns with the Middle East’s growing emphasis on sustainability, particularly in economies like Saudi Arabia and the UAE, where green finance is becoming increasingly important.
Blueprint for Banking Success
As the Middle East continues to grow as a financial powerhouse, banks must embrace technological transformation to stay competitive. By focusing on partnerships, data-driven insights, and smart resource management, they can not only keep pace with global developments but also lead the way in innovation. The future of banking is digital, and those who invest wisely today will reap the rewards of tomorrow.
For information about Riverbed Technology, visit: https://www.riverbed.com/