April 2025

Guidance Through Growth Guidance Through Growth

Vinay Gandhi Global Head of GSAC and Regional Head of AMEE, Standard Chartered Global Private Bank

ROADMAP TO EMBARK 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 capital and term financing requirements in a simplified manner.

High Definition

Though it appears to be, an image is not a singular item. It comprises numerous individual pixels to collectively provide a picture. This is much like the economies of our region, formed as they mostly are by hundreds of thousands of SMEs – the UAE alone houses near to 200,000 employing over 90% of the workforce. Clarity and vision are vital to understanding an economy, and understanding an economy is key to ensuring it thrives. Clarity provides a definitive picture, and vision is what you interpret from the image – it can also relate to the imagination and foresight that fosters progress. Just like the screen or page you are reading this from, for the best overall picture, every pixel needs to perform, and just like your screen, regional economies need SMEs to be performing with success.

This, the April 2025 issue of MEA Finance includes extensive coverage of our SME Business and Finance Summit, held in Dubai on the 26th of February. At the event, as you will read, discussions tackled how banks and government initiatives must and are providing enabling conditions and environments for SMEs to succeed, so as to bring about a definitive picture of economic health for the region.

The cover story this month features an exclusive interview with Vinay Gandhi Global Head of GSAC and Regional Head of AMEE, Standard Chartered Global Private Bank. Vinay shares insights on how the Middle East wealth landscape is changing, the challenges and opportunities that come with intergenerational wealth transfer and what it takes to be a trusted advisor for families looking to build enduring legacies.

Adding to, and further underscoring the growing role of the region as a wealth booking centre, from page 36 we hear from two further leading international private banks with contributions from Neils Zilkens, Head of Wealth Management, Middle East at UBS and Ranjit Khanna Head of Private Banking, Europe & Middle East and Chief Executive, DIFC Branch, Bank of Singapore.

We take a look at foreign exchange and remittances from page 14. The GCC is a leading source of remittance payments to large parts of the world, so how it adapts to the advancement of technology, disruptive players entering the market and shifting global circumstances can be vital to the value of businesses and financial institutions operating in this sector. Then, facing a serious issue for our times that needs attention, turn to page 28 where we look at Financial Crime, how it is being countered across our region and the necessity of bringing robust, adaptive and technologically advanced strategies to bear in the fight against it.

This month’s focus on technology in banking and finance starts at page 22 where the role of The Cloud in the sustainable growth of the region’s banks is examined, then continues with a discussion between Infosys and Bank Muscat about their partnership and the technology trends in Oman’s banking market.

Finally, our Market Focus for this issue rests upon the Kingdom of Saudi Arabia where, from page 10, we look at the progress toward fulfilling their Vision 2030 and how, despite possible minor growth setbacks, the nation is sticking to its development objectives.

So, as you read the accumulated dots and pixels comprising our April 2025 content, we hope to provide you with a highly defined clarity and vision of our increasingly vibrant and active banking and business markets.

Emirates NBD and BlackRock announce Platform for Private Markets Access

Newly created alternatives platform based on BlackRock products with Emirates NBD Asset Management as the manager

Emirates NBD has signed a Memorandum of Understanding (MoU) with BlackRock to create an investment platform that will provide the bank’s wealth clients access to alternatives, specifically within private markets.

Traditionally only available to institutional investors in the region, private markets represent the fastestgrowing segment of asset management, with alternative assets expected to reach USD 30 trillion by the end of the decade. 1

Emirates NBD Asset Management and BlackRock will launch an initial range of evergreen offerings targeting income and growth strategies on an exclusive basis for the UAE wealth market. Alongside these strategies, BlackRock will deploy its open architecture approach to support Emirates NBD Asset Management’s plans to expand its private markets offering by providing additional services such as marketing, education, training and technology.

Through the Emirates NBD Asset Management platform, the long-term

goal is to democratise the alternative assets space and offer Emirates NBD’s clients across the Middle East access to alternatives across all major asset classes.

Marwan Hadi, Group Head of Retail Banking and Wealth Management at Emirates NBD, commented: “Innovation is a cornerstone at Emirates NBD, and we are pleased to partner with BlackRock to offer access to best-in-class, products in alternative markets through a dedicated platform while supporting the growing needs of investors in the region. We are deeply committed to creating value through our offerings and advancing the investment landscape in the UAE and the wider region, which has been experiencing a strong appetite in the last few years.”

Rachel Lord, Head of International at BlackRock, said: “We are delighted to partner with Emirates NBD as they build out their private markets platform. Spurred by investor sentiment and facilitated by product innovation, technology and regulatory advancements, wealth allocations to private markets are predicted to increase materially over the next five years. The combination of Emirates NBD’s distribution capabilities and reach across the region, combined with BlackRock’s expertise and global leadership in private markets, will be a compelling proposition for Middle Eastern investors.”

The private markets offerings will be based on BlackRock’s Alternative Investments platform, which now exceeds USD 450 billion AUM and supported by over 1,000 personnel in more than 50 countries.

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Mastercard Academy Hub to open in Doha

The move aims to enhance skill sets across the regional and global financial industry and create a learning and innovation ecosystem in line with the Qatar National Vision 2030

Mastercard has revealed its intent to set up a physical presence for its global Mastercard Academy in Doha with the aim of enhancing skill sets across the financial industry for regional and global players. The first of its kind Hub will create a learning and innovation ecosystem powered by Mastercard and business schools from across the globe in line with the objectives of the Qatar National Vision 2030.

In the coming months, the global technology leader will announce collaborations with leading institutions from the public and private sector in the buildup to the official Hub launch later this year.

Mastercard Academy offers expert led in-person and virtual courses, including gold-standard certifications, from over 200 experts across Mastercard’s global network. The comprehensive offering provides payment professionals with limitless learning at their fingertips,

with content being continuously updated to reflect the latest trends. To date, Mastercard Academy has hosted live training sessions for over 42,000 attendees, delivered more than 7,000 trainings and achieved 98% customer satisfaction.

Through the Academy Hub, Mastercard will host financial industry players from across the globe in Qatar to equip them with highly sought-after knowledge and skills that will enable them to take their careers to the next level.

“Over three decades ago, we set out on a mission to empower our customers and partners with the knowledge, skills and insights needed to thrive in the world of payments. This led to the inception of Mastercard Academy. In line with our commitment to investing in Qatar, a country that is home to a dynamic financial ecosystem, we are proud to bring the Mastercard Academy Hub to Doha. The upcoming opening of the Hub will enable us to boost innovation capabilities in the region and strengthen our relationships with the government, educational institutions and businesses,” said J.K. Khalil, division president, East Arabia, Mastercard.

Mastercard’s geographical presence and market position in Qatar have witnessed a sustained growth. The country is well on its way to becoming one of the company’s global hubs. With its strong understanding of local trends and the ability to develop innovative, seamless and secure digital offerings, Mastercard is at the forefront of the nation’s digital transformation.

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From Vision to Reality

With a focus on expanding the private sector and diversifying its economy away from oil, Saudi Arabia is investing billions to achieve the ambitious objectives of Vision 2030 and despite possible minor growth setbacks, is sticking to its development objectives

Saudi Arabia opened up foreign investment in listed companies that own real estate within Islam’s two holiest cities of Mecca and Medina in January as part of the kingdom’s efforts to boost its appeal as an investment destination under the Vision 2030 diversification agenda.

The Arab world’s biggest economy is investing heavily to accelerate its economic transformation, build a foundation for long-term prosperity and achieve its national ambitions for a bright future beyond Vision 2030.

Moody’s projected that nonhydrocarbon economic activity would remain robust in Saudi Arabia, benefitting from structural reform tailwinds and large-scale investment projects, including government-sponsored economic diversification initiatives.

While economists anticipate a strong economic rebound in 2025,

the International Monetary Fund (IMF) downgraded Saudi Arabia’s growth forecast for the year to 3.3% from 4.6%, citing the continued oil production cuts.

Though lower oil prices and production cuts impact revenues, authorities in Riyadh are maintaining the country’s spending plans to stimulate non-oil sector growth and achieve its economic transformation goals.

Meanwhile, the Saudi banking sector is expected to continue outperforming the rest of the GCC, driven by robust credit demand fuelled by a vibrant non-oil sector and economic diversification initiatives.

“Banks are poised for stable profitability in 2025 as the volume effect compensates for lower margins. We forecast that the cost of risk will normalise because of the supportive economic environment and declining interest rates,” S&P Global Ratings credit analysts said.

Since 2016, the kingdom has undergone a breakneck speed transformation, launching ambitious programs to diversify its economy while investing hundreds of billions of dollars in sectors ranging from electric vehicles and semiconductors to tourism resorts.

Saudi Arabia’s Public Investment Fund (PIF), a key driver of the country’s economic growth and diversification plan, plans to double its assets under management to $1.07 trillion by 2025. Speaking at the Future Investment Initiative summit last October, PIF Governor Yasir Al-Rumayyan said that the fund would prioritise domestic investments and seek to reduce international holdings from 30% to between 18% and 20% of its total assets.

Building stable foundations

Saudi Arabia’s social and economic transformation offers a model of how significant challenges can be turned into remarkable opportunities. Today, non-oil activities – a priority for the government as it looks to open up to foreign investment and transform the country – comprise more than half of its real GDP, the highest in its history.

S&P Global said that Saudi Arabia’s economic makeover under Vision 2030 seeks to boost the non-oil economy through investment in planned economic diversification projects, Saudisation, increased female participation in the workforce and advancement of the business environment.

The Gulf state’s statistics authority said the non-oil economy expanded by 4.6% in the three months through December – the quickest pace since 2022.

“With a 4.6% growth in total GDP and a 4.8% growth in non-oil activities forecast for 2025, the country is on course to be one of the fastest-growing major economies, proving the power of diversification,” according to the World Bank.

PIF has been deploying capital to help stimulate private-sector investment. Nearly eight years since its reformulation, Saudi Arabia’s sovereign fund has become a powerhouse both at home and overseas, with the objective to invest $40 billion a year in the local economy.

Over the years, the $925 billion fund has set up more than 100 portfolio companies in various sectors, including a hotel management company, Adeera, space and satellite firm Neo Space Group and new advanced industries firm Alat.

PIF owns stakes in electric carmakers – Lucid and Ceer, Saudi Arabia’s startup airline Riyadh Air and several multi-billion giga-projects such as the $500 billion NEOM City, Qiddiya and the Red Sea Development Company.

Saudi Arabia is developing its leisure travel sector, a key part of its economic diversification strategy led by Prime Minister and Crown Prince Mohammed bin Salman. To reach its goal of exceeding 150 million tourist visits annually by 2030, Saudis are investing heavily in its tourism sector, including hotels, luxury developments and entertainment, after welcoming a record 30 million foreign tourists in 2024.

The World Travel & Tourism Council forecasted that tourism will grow its annual GDP contribution to a staggering $222.9 billion (SAR 836.1 billion) by 2034, almost 16% of the Saudi Arabian economy, and will employ more than 3.6 million people across the country, with one in five people working in the sector.

With Riyadh gearing up to host major global events, including the Asian Cup 2027, the Asian Winter Games 2029, Expo 2030 and the FIFA World Cup 2034, the Saudi government plans to spend almost

BANKS ARE POISED FOR STABLE PROFITABILITY IN 2025 AS THE VOLUME EFFECT COMPENSATES FOR LOWER MARGINS. WE FORECAST THAT THE COST OF RISK WILL NORMALISE BECAUSE OF THE SUPPORTIVE ECONOMIC ENVIRONMENT AND DECLINING INTEREST

RATES

– S&P Global Ratings

$1 trillion on the tourism industry alone in the next decade in its push to become one of the world’s most visited places.

“The tourism industry will remain a significant contributor to growth and diversification efforts, with planned investment of $800bn over the next 10 years. The soon-to-be-launched GCCwide visa will positively impact inbound tourism, as it will offer an expanded visa offering, including the ‘Visiting Investor’ visa,” said ICAEW.

Meanwhile, Saudi Arabia recently announced a raft of deals, investment plans and discoveries in its quest to build a metals and mining hub. The Arab world’s biggest economy touted $100 billion of local investment opportunities at the Future Minerals Forum in Riyadh in January and estimates it has $2.5 trillion in mineral resources to be dug up.

Global credit ratings agency Moody’s upgraded Saudi Arabia’s rating to ‘Aa3’ from ‘A1’ last November, citing the authorities’ efforts to diversify beyond its oil economy, while S&P Global revised the kingdom’s outlook to positive from stable in September 2024 on the back of strong non-oil growth outlook and economic resilience.

“Continued progress will, over time, further reduce Saudi Arabia’s exposure to oil market developments and long-term carbon transition,” said Moody’s.

Saudi recalibration

Saudi Aramco’s March indication of a potential dividend reduction, the world’s

largest, has raised concerns among economists about decreased funding for the country’s ambitious giga-projects and a potentially widening budget deficit.

Aramco expects the total payout to be about $85 billion in 2025, compared with $124 billion a year ago.

Saudi Arabia approved its state budget for 2025 last November, forecasting a deficit of $26.88 billion (SAR101 billion) or 2.3% of GDP as the kingdom continues to spend on massive megaprojects designed to wean the economy off oil. The budget estimates total expenditures of SAR1.3 trillion and total revenues of SAR1.2 trillion.

Earlier in 2025, Fitch Ratings projected Saudi Arabia’s fiscal deficit to reach 3.8% of GDP, exceeding the government’s 2.3% target due to anticipated lower oil revenues, with a breakeven oil price forecast of $96.00 per barrel in 2024.

“With the Saudi budget 2025 forecasting a $27 billion deficit, the government faces the challenge of balancing ambitious investment targets while managing expenditure prudently. This means the reprioritisation of expenditure and a pivot towards valuebased spending to maximise the economic and social impacts of public expenditure,” PwC said in its Middle East Economy Watch in February.

Saudi Arabia plans to tap international and local debt markets in 2025 to fill state coffers. Earlier in January, the kingdom’s National Debt Management Centre

(NDMC) raised $12 billion from global debt markets in a three-part bond sale, with proceeds expected to help cover its budget deficit and pay down debt.

The Gulf state sold $5 billion, $3 billion and $4 billion in tenors of three, six and 10 years, days after it secured $2.5 billion from three foreign banks – Abu Dhabi Islamic Bank, Credit Agricole SA and Dubai Islamic Bank. PIF also secured a $7 billion Murabaha credit facility from a consortium of global and regional banks in January and sold $4 billion of debt the same month.

The NDMC estimated that Saudi Arabia’s funding needs to be SAR 139 billion and just over SAR100 billion will cover the budget shortfall, with the rest earmarked for debt repayment.

“Falling oil prices (2025F: $70/barrel; 2026F: $65) should increase funding requirements,” Fitch Ratings said, adding that Saudi Arabia became the largest dollar debt issuer in emerging markets outside China in 2024, the largest debt capital market in the GCC region.

Saudi Arabia’s debt capital market is expected to remain robust in 2025, driven by Vision 2030 initiatives, deficit funding needs, economic diversification, maturing obligations and ongoing reforms.

The path ahead

Saudi Arabia unveiled a new symbol for its currency, the Saudi riyal, in February as part of the government’s broader strategy to establish the kingdom as a global financial hub. Saudi Central Bank (SAMA) Governor Ayman M. Al-Sayari said that the new design, made up of Arabic calligraphy of the word riyal, will be implemented gradually for use in financial and commercial transactions.

The Saudi riyal has been pegged to the US dollar since 1986 and is set at a fixed exchange rate of 3.75 riyals per $1. Nearly a decade into Saudi Arabia’s multitrillion-dollar transformation agenda, the peg has been instrumental in facilitating international trade and investment and attracting foreign capital.

SAMA followed the US Federal Reserve’s decision to keep interest rates unchanged

WITH A 4.6% GROWTH IN TOTAL GDP AND A 4.8% GROWTH IN NON-OIL ACTIVITIES FORECAST FOR 2025, THE COUNTRY IS ON COURSE TO BE ONE OF THE FASTESTGROWING MAJOR ECONOMIES, PROVING THE POWER OF DIVERSIFICATION

– The World Bank

in January to protect the riyal’s peg against the US dollar. ICAEW said that the three interest rate cuts this year would provide further support to lending and the economy.

The financial services sector stands as a crucial pillar in Crown Prince Mohammed bin Salman’s economic diversification strategy for Saudi Arabia. With a recordbreaking 2024 for the banking sector, the nation’s financial landscape is poised for continued strength this year.

Moody’s projected that profitability at Saudi banks would stabilise at around 1.8% in 2025 while cautioning that “a likely further drop in interest rates would slightly squeeze margins (2.8% for the first nine months) as the decline in asset yields and the repricing of the floating corporate loan portfolio (50% of the loan book) outpaces a fall in the cost of funds.”

Banks in Saudi Arabia registered record profits in 2024 on the back of improved operating conditions marked by economic recovery and the central banks’ move to tighten monetary policy. The combined profit of Saudi Arabia’s top five banks – Saudi National Bank (SNB), Al Rajhi Bank, Riyad Bank, Saudi Awwal Bank (SAB) and Banque Saudi Fransi (BSF) – reached nearly $17 billion in 2024, up from $15 billion a year earlier.

Meanwhile, the Saudi banking sector is being fundamentally reshaped by Vision 2030 and tech advancements, leading to a focus on better customer experiences, innovative service offerings and navigating a more competitive landscape.

“SAMA has introduced forwardthinking regulations aimed at fostering

financial inclusion, strengthening digital banking infrastructure and creating opportunities for both traditional banks and fintech players,” according to PwC.

The digital transformation in the Saudi financial services sector continues apace, with digital payments accounting for 62% of transactions in the kingdom’s retail industry in 2022, close to the 70% target by 2025.

Saudi Arabia began publishing licencing requirements for neobanks in 2020 in line with the Financial Sector Development Program, one of the pillars of Vision 2030. STC Bank, the digital lender of the Saudi Telecom Company, commenced operations in January, while D360 Bank, the neobank that counts PIF among its backers, launched operations last December.

To build business agility, boost innovation and enable growth, a fundamental shift is required from incumbents in Saudi Arabia.

Traditional banks in Saudi Arabia are leveraging their existing resources to introduce speedboats – cloud-native digital spinoffs that enable faster time-tomarket for the launching of new products and market expansion. SNB, Saudi Arabia’s largest bank by assets, unveiled its digital banking unit, NEO, last October.

Saudi Arabia’s non-oil economy is thriving, driven by strong domestic demand and private investment. However, maintaining this growth trajectory hinges on the implementation of prudent macroeconomic policies and the consistent pursuit of reforms independent of oil market volatility.

Connectivity

Flexibility

Exceed

Security

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Futureproof

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Mastercard Gateway

Changing Times

The GCC remittance sector has undergone a significant evolution, adapting to technological advancements and societal shifts to facilitate the movement of money across international borders, playing an important role in maintaining global livelihoods

Migrants living across the world send billions of dollars back to their home countries every year. For the expats in the GCC region, particularly in affluent nations such as the UAE and Saudi Arabia, financial support to dependent family members in their countries of origin is the central purpose of their employment, driving a significant crossborder economic exchange.

The dependency-driven employment model has transformed GCC expatriate communities into critical nodes of a multibillion-dollar transnational financial system, sustaining households across developing countries in South Asia, Africa and beyond.

With global remittances surging from $128 billion in 2000 to $857 billion in 2023, with a projected growth of 3% in 2024 and 2025, according to the

World Bank, the Middle East and Africa saw a notable recovery. “Remittances to the Middle East and Africa are estimated to have increased 5.4%, primarily due to rebounded flows to Egypt, compared with a 14.6% decline in 2023.”

Over the years, the remittance market in the Gulf region has witnessed significant growth driven by high expatriate populations, robust financial institutions, an evolving regulatory landscape, cross-border payments and foreign exchange (forex) markets.

The United Nations underscored that while expatriates send back about 15% of their salary, remittances are a lifeline for millions of families around the world and could help achieve 17 of its Sustainable Development Goals.

However, traditional remittance services can be costly, with an average of 7% of the total amount sent going towards conversions and fees, according to the United Nations. Artificial intelligence (AI) and other innovative technologies are

transforming cross-border remittances, dramatically improving speed, convenience and accessibility. The revolution is breaking down traditional barriers to international money transfers and promoting greater financial inclusion.

“The payments industry has been at the forefront of driving digital transformation, which is helping reduce costs significantly. Unlike traditional methods, digital remittance transfers eliminate the need for manual processing and related administrative expenses,” according to Visa.

Meanwhile, to ensure a seamless experience in today’s globalised world, reliable cross-border payments are crucial. Whether sending financial support to loved ones abroad or facilitating international travel, secure cross-border payments help facilitate a seamless payment experience.

An enabling environment

Over the years, the global remittance landscape has evolved significantly. While India, the Philippines and Egypt remain leading recipients, a notable power shift has occurred in remittance origins, particularly within the Middle East.

Historically, Western economies such as the UK, France and Germany were primary remittance sources. However, by 2020, the UAE and Kuwait rose to prominence, joining Saudi Arabia as major contributors to the global remittance market.

The evolution in the global remittance market is being driven by the burgeoning economic influence of these high-income, oil-rich Gulf states and the countries’ massive expatriate population. Home to approximately 35 million migrant workers – representing nearly 10% of the global migrant workforce – the GCC economies are profoundly shaped by the expat workforce.

The migrant workers, who are critical to industries ranging from construction to services, channel a significant portion of their earnings abroad, cementing the GCC states’ position as a major source of global remittances and underscoring the region’s deep dependence on imported labour.

The sheer volume of expats flocking to the GCC from Europe, Asia, Africa and the Americas, coupled with their dedication to supporting families back home, has fuelled a remittance industry of staggering proportions.

With the proportion of expat workers in the Gulf region often exceeding 70% of the population, exchange houses serve as financial lifelines, enabling the flow

Report highlighted that 95%/81% of UAE residents sent/received international remittances once or more a year, respectively, compared to 87%/73% in Saudi Arabia.

Saudi Arabia and the UAE have solidified their positions as global remittance powerhouses. The significant outflow of funds from the Gulf region serves as a crucial economic lifeline, not

DIGITAL REMITTANCES PROVIDE SEVERAL BENEFITS, INCLUDING BETTER USER EXPERIENCE AND ACCESS

TO OTHER SERVICES (E.G., CROSSBORDER BILL-PAY REMITTANCES). OVERALL, THEY HAVE PROVEN TO SIGNIFICANTLY REDUCE THE COST AND IMPROVE THE SECURITY OF SENDING MONEY GLOBALLY

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of critical remittances to workers’ home countries. The financial institutions are central to GCC countries’ economic ecosystem, bridging the gap between millions of low-income migrants and their families abroad.

The GCC remittance market is poised for continued growth and remittances from the region have continued to outpace other types of external financial flows in low- and middle-income countries.

The UAE-based Al Ansari Financial Services, the parent company of Al Ansari Exchange, continued its regional expansion last July by acquiring Bahrain’s BFC Group Holdings for $200 million (AED 735 million), following previous acquisitions in Kuwait and Oman. The deal expanded Al Ansari Exchange’s footprint and solidified its position as the largest remittance and exchange provider in the GCC region in terms of branch network, a network of over 410 branches.

A study by Visa on Money Travels: 2024 Digital Remittances Adoption

only for individual recipients but also for entire economies. A survey by Visa shows that the remittances address vital needs, including humanitarian aid, emergency relief and essential investments in education and healthcare.

Eliminating intermediaries

The remittance sector, encompassing cross-border payments, holds a unique and paramount importance in people’s financial realities, surpassing all other financial service sectors. The World Bank said that remittances are a cornerstone of financial health, frequently acting as the initial financial product for lowerincome individuals and opening doors to a broader array of financial services.

The global community launched a concerted effort to reduce remittance costs in the late 2000s, marked by the World Bank and Bank for International Settlements’ General Principles, the G8 and G20’s 5x5 objectives and a wave of public and private sector projects globally.

DATA SECURITY

“The G20 leaders, under the Presidency of Saudi Arabia, endorsed a roadmap to make cross-border payments cheaper, faster, more transparent and accessible by 2027,” according to Deutsche Bank.

The remittance services sector is being revolutionised by innovative technologies such as artificial intelligence (AI) and blockchain, which are driving down costs and increasing convenience for senders of remittances and their families.

Frost & Sullivan said that cross-border payments and remittance transactions, even if essential, appear as a commodity for most customers; as a result, the fee structure has to be lowered to not appear as a pain point during the transaction, especially for the digital channel.

While the global remittance market was historically dominated by established players, including Western Union and MoneyGram, digital platforms and fintech companies, such as Remitly and Careem Pay, are now gaining significant traction by offering superior exchange rates, lower fees, streamlined processes and a customer-focused experience.

“Digital remittances provide several benefits, including better user experience and access to other services (e.g., crossborder bill-pay remittances). Overall, they have proven to significantly reduce the cost and improve the security of sending money globally,” said Mastercard.

A global survey by payments network firm Visa revealed that while digital apps dominate remittance reception in the UAE (63%) and Saudi Arabia (67%), a significant portion of respondents in these countries still prefer sending remittances from physical locations (64% in Saudi Arabia and 58% in the UAE), surpassing those using digital apps (51% in Saudi Arabia and 57% in the UAE).

The unique remittance trend observed in the Middle East by a Visa global survey is fostering a more competitive industry, leading to enhanced services and increased innovation for consumers.

Meanwhile, AI adoption in financial services is significantly enhancing user

experience through simplified and more convenient processes while advancing security and compliance measures. AI empowers remittance providers to customise their offerings by analysing customer data, leading to a more personalised experience. Furthermore, strategic AI implementation optimises marketing efforts, ensuring timely and relevant service delivery.

The transformative technology is increasingly streamlining essential back-end operations such as processing, reconciliation and settlements for financial institutions. With remittance volumes surging and security risks

as moderating inflation provides room for gradual policy easing.

Global market uncertainties, driven by events such as the tit-for-tat trade tariffs between the US and allies like the European Union and Canada, affect foreign exchange markets. The US dollar’s firstquarter appreciation following President Donald Trump’s return to the White House further strengthened GCC currencies, including the Saudi riyal and UAE dirham, which serve as crucial remittance hubs for South Asia and Africa.

The US dollar entered an uncertain 2025 on solid footing, bolstered by President Trump’s rhetoric, according to

REMITTANCES ARE A CORNERSTONE OF FINANCIAL HEALTH, FREQUENTLY ACTING AS THE INITIAL FINANCIAL PRODUCT FOR LOWERINCOME

INDIVIDUALS AND OPENING DOORS TO A BROADER ARRAY OF FINANCIAL SERVICES

– The World Bank

escalating due to the adoption of digital platforms, AI is now vital for banks, payment firms and remittance houses to mitigate the challenges and meet evolving business and consumer needs.

Stronger for longer

The global economy is in a better state of balance, with the International Monetary Fund (IMF) upgrading its growth forecast for 2025 to 3.3%, spurred by strongerthan-expected US demand and slowing inflation worldwide – leaving the door open for central banks to resume interest rates cuts by mid-year.

GCC central banks – including Qatar and the UAE – followed the US Federal Reserve’s decision to keep interest rates unchanged in January to protect their currencies’ peg against the dollar. The Institute of Chartered Accountants in England and Wales (ICAEW) projected three rate cuts in the GCC region this year,

currency strategists at Goldman Sachs Group. The world’s reserve currency has experienced a sustained rally since late September 2024, a trend anticipated to continue or stabilise this year driven by factors such as economic growth, diverging monetary policies and shifts in the Trump administration’s foreign policy.

The growing expatriate population in the GCC region, coupled with the digitalisation in the financial services sector, will significantly increase the importance of remittances, fostering economic interconnectivity and enhancing livelihoods on a global scale. The GCC region’s remittance market, led by incumbents such as BFC Group Holdings, Al Mulla International Exchange Company and Al Ansari Exchange, is facing increased competition from digital startups that offer lower transfer fees, faster transactions and user-friendly mobile apps.

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A Remit for Change

Faizal Kundil, Head of Consumer Banking at Ajman Bank lends us his thoughts on the regional forex and remittances markets, highlighting expected growth and change in these sectors as the labour market grows and the effects of AI and fintech become more embedded

Will the current direction taken by the US government will have any out of the ordinary or lasting effects on exchange rates?

Exchange rates are influenced by a broad spectrum of economic, geopolitical and market-driven factors. Policy decisions in major global economies play a role in shaping market sentiment, but exchange rate movements are ultimately determined by a combination of macroeconomic fundamentals, interest rate differentials, trade balances and investor confidence. Given the interconnected nature of global financial markets, any impact tends to be a result of multiple variables rather than a single factor. Ajman Bank remains committed to adhering to Central Bank regulations and policies.

According to imarc research, in coming years the regional Forex market size is set to grow at a CAGR of over 9%. What are the lead factors backing this projection?

The lead regional factors are economic diversification and non-oil growth, oil

Faizal Kundil, Head of Consumer Banking, Ajman Bank

prices and fiscal policies, digitalisation of payment platforms and currencies and monetary policy. In addition, trade and economic ties with Asia and Africa along with tourism into the region are significant.

How will the regional remittance market develop as the GCC and the wider region continues along its current growth path?

As the UAE and GCC countries diversify their economies, particularly through investments in non-oil sectors like technology, finance, tourism and infrastructure, it will likely lead to an increase in foreign workers and, consequently, higher remittance flows. As the labour market grows, remittances to countries like India, Pakistan, Bangladesh, the Philippines and other Southeast Asian and African nations will see an uptick. The adoption of digital wallets, mobile money and remittance apps will significantly streamline the process of sending money across borders. Countries in the GCC are rapidly embracing fintech solutions, which is making remittance services faster, cheaper and more accessible. This development is likely to accelerate as digital payments and blockchain technologies are adopted, reducing the reliance on traditional cash-based methods and increasing the efficiency of cross-border transfers.

While traditional remittance corridors like India, Egypt, and the Philippines will continue to dominate, there is growing diversification in both sending and receiving countries. GCC countries are becoming more attractive to a broader range of expatriates, including from countries like China, and from Southeast Asia and Africa. This diversification will likely result in a wider range of corridors and remittance providers. This growth will be accompanied by more efficient, cheaper and accessible remittance services, alongside evolving regulatory frameworks that balance innovation with security. As these factors come into play, the region will see a dynamic and rapidly changing remittance landscape that could benefit both senders and recipients alike.

What do you think will be the most noticeable effects of AI and fintech on the remittances services market across the region?

The most noticeable effects will be lower transaction costs and fees, faster and more efficient transfers and enhanced security and fraud prevention. There will be increased competition and market disruption as a result in an environment of Central Bank Digital Currencies (CBDCs), digital wallets and blockchain based remittances.

AI and fintech are expected to have several transformative effects on remittance services across various regions, making them more efficient, accessible and affordable. Some of the most noticeable effects include:

1. Faster Transactions: AI-powered algorithms can streamline the process of remittances, enabling faster and more efficient crossborder transfers. Fintech companies, using AI and blockchain, will likely reduce transaction times significantly compared to traditional methods, which could take several days.

2. Lower Costs: The use of AI for automating processes like fraud

detection, customer verification, and transaction monitoring can lower operational costs. Fintech companies are also pushing to offer more competitive exchange rates and lower fees, which could benefit consumers sending and receiving money.

3. Improved Security: AI can enhance security through advanced fraud detection systems, anomaly detection and secure authentication

cross-border payments, which can significantly reduce transaction costs and enhance transparency. This could make remittance services more attractive to migrant workers who send money home frequently.

7. R egulatory and Compliance Challenges: While AI and fintech can enhance efficiency, they may also pose challenges in terms of regulation. The introduction of more tech-driven services may prompt

AS THESE FACTORS COME INTO PLAY, THE REGION WILL SEE A DYNAMIC AND RAPIDLY CHANGING REMITTANCE LANDSCAPE THAT COULD BENEFIT BOTH SENDERS AND RECIPIENTS ALIKE

methods like biometrics. This can help reduce the risk of financial crimes, which has been a concern in traditional remittance channels.

4. Gr eater Financial Inclusion: AI-powered services can offer personalised financial solutions and more inclusive access to remittance services, especially in underbanked or remote areas. Mobile-based fintech platforms can make remittance services accessible even to people who don’t have a traditional bank account.

5. Enhanced Customer Experience: AI-driven chatbots, customer support automation and tailored financial products will improve the overall user experience, offering more convenient and user-friendly interfaces for people to send and receive money globally.

6. Blockchain and Cryptocurrency Integration: Fintech platforms may increasingly use blockchain or cryptocurrencies to facilitate

regulators to adapt, ensuring that these new services comply with local laws, including anti-money laundering (AML) and know your customer (KYC) regulations. Overall, AI and fintech have the potential to revolutionise remittance services by improving efficiency, affordability and security, making crossborder money transfers easier for individuals and families.

Do you expect to see any tangible results or outcomes of the UAE’s membership of the BRICS group in the coming years?

We expect to see continued economic diversification towards and access to the BRICS group of countries. This will strengthen the UAE’s geopolitical influence, promote local currencies in trade and see the UAE’s participation in the New Development Bank, established to fund infrastructure and sustainable development projects in emerging economies.

The Digital Dirham

Nauman Hassan Regional Director MENA at Paymentology outlines what the expected launch of the Digital Dirham means for the UAE’s financial future and how to prepare for it

The UAE Central Bank’s (UAECB) Central Bank Digital Currency (CBDC) strategy builds on a strong foundation – starting with a prototype jointly issued with the Saudi Central Bank and the successful mBridge initiative, developed in collaboration with the central banks of Hong Kong SAR, Thailand and China. This strategic journey will culminate in the launch of “The Digital Dirham”, a thoughtfully designed addition to the UAE’s evolving financial landscape.

Expected to launch by the end of 2025, the Digital Dirham promises enhanced security and efficiency for digital payments, issued directly by the Central Bank via a secure, integrated platform. An accompanying wallet is also planned, aiming to lower the adoption barrier for both consumers and businesses.

However, there remains uncertainty around its broader implications. Drawing from case studies like China’s digital Yuan, introduced in 2020 and gradually rolled out city-by-city, we can anticipate a similarly phased integration for the Digital Dirham – coexisting with e-money and stablecoins. The United Arab Emirates, known for bold execution, is expected to drive widespread adoption over the coming years.

The Age of the Digital Dirham

The region’s latest digital currency enters the market with ambitious goals. The UAECB Governor, Khaled Mohamed Balama has stated that the initiative “will enhance financial stability, fight financial crime and boost international trade”.

Preparing for a New Normal

These promises are well-grounded - CBDCs can enable low-to-zero cost transactions with universal accessibility for all individuals and businesses alike.

The Digital Dirham will also operate through a secure blockchain infrastructure platform where all participants are verified, significantly reducing the risk of fraud. Moreover, the Governor highlights its potential to “further enable the development of innovative digital products services and new business models”. As a digital payments rail, the CBDC will reduce friction in the transaction chain, lowering costs and enabling faster, more transparent processing.

The introduction of the Digital Dirham placed the UAE’s booming fintech ecosystem – which attracted $2.3 billion in investments in 2025 - ahead of the curve. UAE-based fintechs will not only benefit from early adoption but may also play a critical role in advising other markets as they adopt similar frameworks.

Banks, fintechs and merchants that quickly adopt the Digital Dirham will likely benefit from a first-mover advantage –attracting customers eager to explore this new payment system and unlocking new international trade opportunities. While the UAECB has yet to release detailed technical and compliance frameworks, comments from Governor Balama suggest that the infrastructure will be broadly accessible after launch. To prepare, businesses should consider modernising their tech stacks by partnering with cloud-native infrastructure providers. CBDCs operate in a blockchain-based environment, so systems built for digital-first integration and scalable cloud services will offer the greatest flexibility and speed of adoption. It’s also beneficial to collaborate with partners experienced in advanced payments technologies. Providers that support innovations such as network tokenisation and virtual card issuing are likely to have the expertise required to seamlessly integrate with Digital Dirham functionality – whether at checkout, within digital wallets, or across banking services.

Embracing Digital Assets

Just a year ago, the future of digital assets in mainstream finance remained uncertain. Today, that doubt has been replaced with confidence – thanks to growing support from global institutions and governmentlevel endorsement in markets like the US. Whether engaging with volatile cryptocurrencies, stablecoins, or CBDCs, financial institutions must adapt their internal processes and culture. Upskilling teams across compliance, operations, and product development to manage this new asset class is essential. It ensures that readiness is reached while maintaining a focus on business priorities.

With the right infrastructure, forwardlooking partnerships and internal preparedness,businesses in the UAE can be well-positioned to lead in the CBDC era – and make the most of the Digital Dirham when it launches later this year.

Nauman Hassan Regional Director MENA at Paymentology

Broadening Horizons

For regional banks sustainable growth hinges on modern cloud services that offer the data insights and scaling options making the technology relevant and essential, so allowing for the delivery of rapid product launches and real-time, personalised banking experiences

The GCC banking sector has reached a pivotal crossroads, where digital transformation is no longer merely a competitive advantage but an absolute necessity. The industry has been confronting unprecedented pressures – from nimble disruptors to unprecedented regulatory scrutiny and evolving demands of digitally savvy consumers – and incumbents need to reinvent their strategies swiftly.

Today’s banking customers are demanding hyper-personalised, frictionless banking experiences tailored to individual tastes and preferences. For banks in the region, this means moving beyond traditional one-size-fitsall approaches to harness data, artificial intelligence-driven (AI) insights and nextgeneration digital ecosystems.

“The widespread adoption of cloud computing and big data analytics, new and emerging forms of engagement and evolving customer expectations are changing the financial services landscape,” according to Hitachi Solutions.

Financial institutions leading the charge into the GCC region’s new banking era are reimagining the customer experience, fostering a new culture of work, optimising operations and driving product innovation. Cloud adoption is the backbone of digital innovation in the banking sector and the transformative technology is shaping the future of the financial services sector.

“Today, there’s growing verticalisation of cloud-based offerings, resulting in a new set of products and services that enable business-specific capabilities such as customer onboarding, loan origination, anti-money laundering and digital financial advisor capabilities,” said Deloitte.

The cloud provides banks with a comprehensive suite of on-demand tools – from big data analytics and network infrastructure to storage and APIs –facilitating swift resource allocation and management, all with reduced reliance on external providers.

Over the years, the notion that cloud migration was a distant goal has been decisively overturned; today, with customer

expectations and technology evolving at an unprecedented rate, cloud adoption is a critical strategic priority for banks.

Oliver Wyman said that cloud technology is a business game changer that has rewarded early adopters with an ability to scale and innovate rapidly while emphasising that time is of the essence; incumbents need to act swiftly.

With over 90% of GCC banks prioritising the cloud and more than a third discussing progress at the executive level, the transformative technology is clearly seen as a pivotal factor in driving operational efficiency and comprehensive transformation.

The age of hyper-personalisation

Digital transformation in the banking industry is fundamentally altering the way financial institutions operate, engage with customers and manage their internal processes. To remain competitive in the evolving landscape, banks in the GCC must innovate and adopt new digital platforms that are more consumer-oriented with rich personalisation, new AI-powered digital tools and services that help them remain relevant.

“Banks are coming around to the view that the only scalable growth advantage is a more nimble, modern technology system, one that speeds up time to market and helps their bank deliver what clients demand: real-time, customised and frictionless banking services,” said PwC.

To build an agile system, banking executives in the GCC are utilising strategic cloud investments to transition gradually,

acknowledging the impracticality of swiftly moving an entire legacy infrastructure.

The cloud is a catalyst for digital transformation in the banking sector. It offers vast benefits such as increased flexibility, business agility, lower IT expenses and faster innovation cycles, all while unlocking new avenues for deeper customer engagement amidst the ongoing digitalisation of financial services.

Cloud technology offers banks in the GCC region a powerful pathway to accelerate digitalisation, unifying fragmented systems, reducing operational burdens and driving innovation, thereby enabling them to focus on their unique value.

Moreover, the transformative technology offers incumbents advanced business agility, allowing them to be nimble and pivot to accommodate evolving consumer demands and significant shifts in the market – an essential capability in today’s rapidly changing financial landscape.

For banking customers, the benefits of the cloud are equally compelling, enabling banks to deliver personalised and seamless customer experiences.

Growing competition from fintechs and neobanks, also known as digital attacker banks, emphasises how banks currently fall short of providing superior customer experiences. Banking customers are redefining their expectations, taking their cues from other industries that offer multichannel access, product simplicity, seamless integration and ‘segment-ofone’ targeting.

Customers demand 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.

The cloud can help banks transform the customer experience and personalisation by providing them with a more holistic understanding of their customers. It enables financial institutions to manage and process huge data volumes across multiple sources.

“Banking customers generate an

THE WIDESPREAD ADOPTION OF CLOUD COMPUTING AND BIG DATA ANALYTICS, NEW AND EMERGING FORMS OF ENGAGEMENT AND EVOLVING CUSTOMER EXPECTATIONS ARE

CHANGING THE FINANCIAL SERVICES LANDSCAPE

– Hitachi Solutions

astronomical amount of data every day through hundreds of thousands of individual transactions,” global IT firm Hitachi Solutions said in a report, adding that the adoption of cloud-based banking analytics platforms will enable banks to access and process large volumes of data more efficiently and securely.

The cloud offers GCC banks seamless data access, decentralised ownership, realtime interactions, scalable resources and enhanced security. The growing adoption of generative AI (GenAI), blockchain and advanced data science techniques will further accelerate cloud adoption in the region’s banking ecosystem.

The engine of innovation & insight

GCC banks’ relentless pursuit of advanced user customer experience is the driving force behind the sweeping digital transformation occurring within the region’s financial services sector. The transformation hinges on innovative strategies that harness the power of cloud computing and realtime customer data, creating significant opportunities for personalised and efficient banking services.

Banks in the GCC region are not leveraging the cloud only to modernise their IT infrastructures but reimagine operational models and customer relationships, driven by the imperative to deliver seamless, personalised and agile services in an increasingly competitive landscape.

The evolution hinges on front-to-back digitisation of the customer journey, which demands a seamless, analyticspowered experience. From onboarding

to transaction processing, banks are deploying cloud-based platforms to embed personalisation, efficiency and convenience at every touchpoint – all while reducing operational costs.

The cloud, as a cornerstone of digital transformation, is empowering banks in the Gulf region to harness advanced analytics at scale. By offering scalable storage and processing capabilities, the cloud facilitates the analysis of vast datasets, including those generated by mobile applications, thereby enhancing customer insights.

“The ability to process and analyse vast stores of data, the enabling power of the cloud and the rapid maturation of AI are combining to create a wealth of opportunities for enhancement and innovation across organisations’ operations, workforce, products and experiences,” said Accenture.

Cloud technology, particularly software as a service (SaaS) and banking as a service (BaaS), provides banks with numerous advantages, including streamlined customer data analytics, improved marketing efficiency, reduced operational costs and enhanced flexibility.

SaaS platforms allow banks to deploy cutting-edge tools – such as AI-driven chatbots, fraud detection systems, or compliance engines – without the burden of developing and maintaining in-house software. Meanwhile, BaaS is reshaping the industry’s boundaries by enabling non-financial platforms, such as e-commerce sites or ride-hailing apps, to embed banking services via APIs.

The value of data lies in its accessibility and application, and in the banking sector, customer insight plays a pivotal role in product development and customer communication. “As AI becomes ingrained in how financial institutions do business, next-generation cloud architectures that take advantage of the latest AI capabilities are fueling modern business strategies,” said PwC.

Technological advancements, such as open APIs and cloud-native solutions, empower banks to leverage data for service enhancement and rapid response. The hyper-personalisation of banking products, akin to other consumer offerings, is made possible through datadriven insights, allowing banks to meet the evolving demands of their customers.

The convergence of cloud technology and real-time data analytics is not merely a technological upgrade – it is a strategic renaissance for banks across the our region. Financial institutions that embrace the shift will differentiate themselves through agility, innovation and an unparalleled ability to anticipate and fulfil customer needs.

The future of banking lies in harnessing the cloud not just as infrastructure but as a catalyst for reinvention, where every byte of data and every line of code serves a singular purpose: elevating the customer experience.

A match made in finance

The GCC financial services sector is undergoing a radical transformation driven by the convergence of digital technologies that are dismantling traditional barriers. Once rigid and siloed, banking systems are now interconnected and open, creating a fertile environment for open banking to thrive. The radical shift, fueled by cloud computing and other innovative technologies, is empowering banks in the Gulf region to embrace a new era of customer-centricity and innovation.

“Cloud is a critical enabler of advanced digital technologies that open the door to new business models and revenue streams. With the cloud, banks can more

OPEN BANKING PROVIDES OPEN ACCESS TO A CUSTOMER’S FINANCIAL DATA FROM BANKS AND OTHER FINANCIAL INSTITUTIONS USING APIS. BUILT ON THE CLOUD, OPEN BANKING PLATFORMS ARE FACILITATING EVER-INCREASING ON-DEMAND NEEDS

OF FINANCIAL DATA

easily tap into the next generation of digital technologies that are already reshaping the competitive landscape and unleash the full value of their data and digital ecosystems,” said Accenture.

The engine powering the transformation in the financial services sector is the cloud. By migrating to cloudbased platforms, incumbents gain the agility and scalability necessary to handle the exponential growth of data and the demands of real-time transactions.

Leveraging APIs and open banking platforms enables retail and enterprise clients to access consumer financial data in real-time, sharing account information and transaction history with trusted external parties, including vendors, suppliers, business partners and other players in the financial services ecosystem.

“Open banking provides open access to a customer’s financial data from banks and other financial institutions using APIs. Built on cloud, open banking platforms are facilitating ever-increasing on-demand needs of financial data,” said IT software and consultancy services firm IBM.

The on-demand nature of financial data, facilitated by cloud-based open banking, is revolutionising the customer experience. Third-party providers, payment initiation service providers and account information service providers can access critical transaction data and consumer insights, enabling them to develop personalised and innovative solutions.

“Open banking puts consumers and small businesses at the centre of their

financial decisions to unlock growth with the promise of more personalised, accessible financial services and enhanced payment choice, putting them on the pathway to prosperity,” according to Mastercard.

While the cloud and innovative technologies have opened up exciting possibilities for open banking, banks in the GCC must navigate a complex regulatory landscape. Building new ecosystems of services and data requires strict adherence to various data privacy regulations, ensuring customer trust and data security. Furthermore, robust security models are essential to mitigate the everpresent threat of cybersecurity risks.

Regulators in the GCC are actively working to establish clear frameworks for open banking adoption, emphasising data privacy and security. Standardised APIs and interoperability between different platforms are crucial for fostering a thriving open banking ecosystem. Banks must invest in robust cybersecurity infrastructure and implement stringent data protection measures to safeguard sensitive customer information.

Cloud adoption is reshaping the GCC banking landscape, driving unprecedented agility and innovation. Security concerns, once a barrier, are being addressed with robust compliance frameworks. AI and machine learning, powered by cloud infrastructure, are transforming customer experiences and risk management. The dynamic shift promises a more competitive, efficient and customercentric banking sector in the Gulf region.

Partners in Advancement

As Oman’s leading financial institution, Bank Muscat is at the forefront of the nation’s digital transformation journey. In line with Oman Vision 2040, the bank is embracing innovation to enhance customer experiences and support economic diversification

In this conversation, Sriranga Sampathkumar, VP and General Manager – Middle East and Africa at Infosys Ltd, speaks with Ahmed Omar Al Ojaili, General Manager – Information Technology at Bank Muscat, to delve into the bank’s strategic initiatives, digital advancements and its role in shaping the future of banking in Oman.

Sriranga - Thank you for taking the time to speak with us today. Could you share some insights on the key trends driving change in the banking sector in Oman, and how Bank Muscat is strategically responding to these trends?

Ahmed - The banking sector in Oman is rapidly evolving driven by key trends such as economic diversification and digital transformation. The focus of Oman Vision 2040 is to create a more diversified, sustainable and resilient economy by reducing dependence on oil revenues and focusing towards growth in technology, tourism and renewable energy. Thus, creating a demand for innovative banking solutions to support these emerging sectors.

Scaling digital transformation continues to be a critical priority for banks. As customer expectations evolve, the demand for seamless, intuitive digital experiences that are fully integrated into their primary financial journeys is more prevalent than in the past. To stay competitive, banks must prioritise the

development of more immersive mobile apps and efficient digital payment solutions that not only meet but anticipate customer needs. Elevating these digital capabilities is no longer optional—it’s essential for delivering the convenience, speed and personalisation that modern banking customers now expect as the norm.

At Bank Muscat, we are strategically aligned with these trends. Over the past 40 years, we’ve been a reliable partner in sustainable development, and our focus on digital transformation is evident in our growing user base of mobile and Internet banking customers amounting to more than 1.9 million users as of now. This underscores our success in executing plans that promote digital transformation and financial inclusion for individuals, corporates and SMEs.

We have introduced innovative services that cater to the demand

for on-the-go banking, positioning our applications as central to our customers’ digital preferences. These enhancements improve customer convenience and align with Oman’s digital society goals. Our advancements in digital banking reinforce our commitment to providing world-class services and supporting government initiatives.

Sriranga - Given the bank’s commitment to providing worldclass banking products and services, especially in digital banking channels that enhance convenience and efficiency for customers, how has Bank Muscat positioned itself to capitalise on the growing trend of digital adoption in the market?

Ahmed - Bank Muscat is deeply committed to its vision of “To serve

Ahmed Omar Al Ojaili, General Manager – Information Technology at Bank Muscat

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

you better, every day.” We are actively transforming our digital channels to align with this mission.

We believe that convenience is a key driver for customer satisfaction. Thus, we aim to make our mobile app a central hub for all banking needs by offering extensive features and capabilities. We’ve streamlined the Know Your Customer (KYC) and onboarding processes, allowing customers to complete these tasks seamlessly from their mobile devices, ensuring speed and security. We have simplified everyday transactions by ensuring seamless mobile payments through QR code scanning and other mechanisms.

Our app now supports variety of fund investments and international money transfers, making it easier for customers to manage investments and conduct cross-border transactions efficiently. We have also introduced features for managing minor accounts, giving parents and guardians convenient oversight through our digital channels.

Beyond traditional banking services, we are embedding value-added features into our mobile app to enhance the overall customer experience. The Asalah Entertainer App allows customers to use the app directly through Mobile Banking, enhancing banking convenience and saving time. Also, API Banking Services is a major initiative by the bank and it has contributed to revolutionising transaction management with an endto-end digital journey.

Sriranga - How is this channel transformation helping your customers, and what benefits have been realised?

Ahmed - In line with our customer-centric vision and commitment to providing the best digital banking services, Bank Muscat’s channel transformation has brought notable benefits.

In terms of numbers, the number of users of the bank’s digital channels has exceeded 1.9 million. The bank has redefined the industry benchmarks by

crafting digital banking solutions catering to the needs of its corporate customers. The volume of transactions processed over the corporate online banking platform increased significantly by 77% in the first half of 2024, compared to the corresponding period last year. We also registered a remarkable increase of 51% in the number of POS and e-commerce transactions and a surge of 22.7% in transaction volumes during the first half of 2024, compared to the same period in the previous year.

BANK MUSCAT

IS DEEPLY COMMITTED

TO

ITS VISION OF “TO SERVE YOU BETTER, EVERY DAY

On the qualitative side, our transformation has significantly enriched the user experience. For instance, features like Tap ‘N’ Go, Samsung Pay and QR code payments, have made banking more intuitive and accessible.

We have also integrated advanced security measures, which not only enhance security but also offer peace of mind to our customers. The unified login experience across Internet and Mobile Banking has streamlined our customers’ interactions, reducing the complexity of managing multiple credentials.

Moreover, our app now supports a range of new functionalities. Users can scan their debit cards for quick registration, share payment receipts via social media and even perform bill payments using barcode scanning. The introduction of digital KYC and onboarding has enabled customers to complete necessary procedures from the comfort of their homes, cutting down on paperwork and administrative hassles.

Sriranga - How is your bank preparing for the future through technological advancements?

Ahmed - With a commitment to innovation, the bank aims to regularly roll out innovative features and enhancements using agile methodologies based on emerging technologies and evolve based on continuous customer feedback and market trends.

We have invested in scalable infrastructure to manage high transaction volumes and peak loads without compromising performance. This scalability prepares us for future growth and increasing user demands.

Also, exploring partnerships with technology innovators is a key area of focus for us. We want to ensure that our digital channel remains innovative, competitive and at the forefront of technological advancements in the banking and financial domain.

Sriranga - Can you tell me about your relationship with Finacle and how it’s contributed to your digital banking transformation?

Ahmed - Bank Muscat’s partnership with Finacle has been instrumental in shaping our digital banking capabilities and delivering a superior customer experience. Our collaboration began in 2013 with the successful implementation of the Finacle Internet Banking platform.

The platform’s comprehensive capabilities provided us with the tools needed to enhance our online banking services and set the stage for future innovations. It offers a scalable, agile and resilient infrastructure that supports our growing needs and evolving market demands. The platform’s versatility ensures that we can integrate new functionalities and adapt to changing technological landscapes with ease.

A significant benefit of our partnership with Finacle is the seamless integration of Mobile and Internet Banking on the same platform. This unified approach allows us to deliver a consistent and enhanced user experience across all digital channels.

The Good Fight

The increasing scale and sophistication of financial crime is driving a heightened focus on effective risk management within the GCC banking sector, necessitating the adoption of robust, adaptive and technologically advanced strategies

Globally, financial institutions have repeatedly suffered reputational damage and lost public trust following scandals stemming from weak risk management and failures in anti-money laundering and counter-terrorism financing (AML/CFT) controls. The International Monetary Fund (IMF) said effective AML/CFT policies and measures are key to the integrity and stability of the international financial system and member countries’ economies.

The UAE’s removal from the Financial Action Task Force (FATF) grey list in February 2024 marked a culmination of the authorities’ push to boost AML/ CFT measures. The delisting, crucial for a nation attracting significant financial activity, mirrors efforts within the GCC region to combat financial crime by investing in innovative technologies and implementing regulatory frameworks and policies that align with FATF.

Hamid Al Zaabi, Secretary-General of the National Anti-Money Laundering

and Combatting Financing of Terrorism and Financing of Illegal Organizations Committee (NAMLCFTC) said that the UAE has signed 45 mutual legal assistance treaties in line with the efforts made by its Ministry of Justice and plans are underway to sign new mutual legal assistance treaties in 2024/25.

The global threat of criminal activity within the financial sector necessitates a coordinated and extensive response driven by clear public policy. GCC countries have solidified their commitment to fighting the flow of illicit money by establishing collaborative alliances, which are marked by robust communication, shared technical knowledge and intelligence sharing.

Deloitte said that the strengthening of financial crime prevention frameworks is crucial to effectively identify and halt the flow of illicit funds that enable cybercrime, fraud and human trafficking, demanding increased action across all sectors.

Meanwhile, as financial services firms’ business models and ways of serving customers have evolved toward a digital landscape, risk management and compliance should not be left behind. The adoption of real-time payment platforms and cryptocurrencies in the GCC region calls for regulatory bodies and financial institutions to adapt rapidly to new and complex issues.

“Leveraging data and technology better to address the existing and emerging risks will be critical to enable digital payments firms, banks and other financial institutions to deliver their digital propositions to customers in a riskrobust, compliant and scalable way,” said Oliver Wyman.

Financial crime transcends geographical and institutional boundaries, leveraging the global financial system’s interconnectedness. While this presents challenges, it fosters opportunities for collaborative efforts against illicit activities.

Recent regulatory reforms in key regions, such as the partnership between the UAE and the US, exemplify a worldwide shift towards enhanced cooperation. The reforms aim to improve coordination among financial institutions, thereby strengthening their ability to detect and combat financial crimes.

The road to integration

The outbreak of the COVID-19 pandemic and geopolitical tensions laid bare the vulnerabilities of the global financial system, revealing the extent of kleptocracy and the intricate methods criminal organisations use to exploit economic instability for illicit gain. Deloitte said that the longstanding threat of illicit finance, which transcends state-level actors, provides the lifeblood for criminal and terrorist operations.

“Indeed, illicit finance is what enables criminals to profit from heinous crimes and to finance terrorism. It can cause immense financial and human harm to individuals, communities, taxpayers, governments and the wider society.”

The sheer size of illicit financial activity makes a coordinated, collective response imperative, requiring governments, financial institutions and corporations to develop and implement effective solutions rapidly.

GCC states’ dedication to combating financial crime is evident in the region’s progress, driven by new regulations and decisive action against AML/CFT lapses.

hefty fines, including AED 5 million on a foreign bank and AED 5.8 million on a local bank, both for failing to address AML/CFT deficiencies sufficiently.

The CBUAE suspended Al Razouki Exchange for three years in November 2024, closing its branches in line with the AML/CFT Law. The measures, alongside the UAE’s delisting from the FATF grey list, are positive moves for Wall Street lenders

EFFECTIVE AML/CFT POLICIES AND MEASURES ARE KEY TO THE INTEGRITY AND STABILITY OF THE INTERNATIONAL FINANCIAL SYSTEM AND MEMBER COUNTRIES’ ECONOMIES. MONEY LAUNDERING AND PREDICATE OFFENSES ARE CRIMES WITH ECONOMIC EFFECTS

– The International Monetary Fund

The measures are pivotal in maintaining robust financial and economic stability while simultaneously elevating the region’s role as a key player in the global economy.

Since the start of January 2025, the UAE’s Securities and Commodities Authority (SCA) has tightened its grip on violating companies, imposing hefty fines totalling $313,138 (AED 1.15 million).

The penalties include AED 650,000 in fines specifically for breaches of AML/CTF regulations affecting both companies and investors, alongside an additional AED 500,000 levied on entities that failed to adhere to AML/ CFT provisions and engaged in activities beyond their authorised SCA licenses.

The UAE’s efforts to strengthen its financial system, evidenced by recent regulatory actions, come at a time when its position as a burgeoning financial centre and key player in the global market is increasingly important. Last year, the Central Bank of the UAE (CBUAE) imposed

who have faced increased compliance burdens since the designation in 2022. The UAE is home to prominent financial hubs such as the Abu Dhabi Global Market and the Dubai International Financial Centre.

To align with evolving societal norms and meet its obligations under international treaties, Oman enacted a new Penal Code in January 2018. The Sultanate has taken significant and long-awaited steps to implement stricter regulations, including those addressing the misappropriation of public property, in recognition of the growing scrutiny of the Middle East by international bodies such as FATF.

“Oman is achieving positive results in the use of financial intelligence, international cooperation, combating terrorist financing and implementing financial sanctions for proliferation financing,” said FATF.

The watchdog emphasised that Saudi Arabia, Bahrain, Kuwait and Qatar

FIGHTING FINANCIAL CRIME

have achieved substantial progress in reinforcing their anti-money laundering and counter-terrorist financing measures, leading to advanced technical compliance with FATF regulations.

The global fight against illicit finance is at a critical juncture. The increasing scale and impact of these activities demand a comprehensive, ecosystem-wide strategy. To effectively combat criminals, all stakeholders – regulators, the financial services sector, law enforcement and policymakers – must be empowered to maximise their individual and collective contributions towards achieving tangible results.

Harnessing advanced tech

The staggering $3.1 trillion financial crime epidemic, fuelled by billions generated from fraud, corruption and other underlying criminal activities, continues to plague the world. These predicate crimes are the engine of money laundering and current methods for identifying this illicit flow are demonstrably failing.

Traditional transaction monitoring employs a one-size-fits-all strategy that lacks the nuanced understanding needed to recognise the specific red flags associated with each distinct type of predicate crime. The current state of affairs is clearly inadequate to address the world’s multi-trillion-dollar financial crime challenge.

ACAMS, a global trade association for anti-financial-crime professionals, said that faced with a global epidemic of financial crime, the need for greater efficiency in AML/CFT programs is acute. However, the latest iteration of artificial intelligence (AI) represents a significant technological leap forward, with the potential to have a substantial impact on the banking sector. From new regulations to geopolitical crises to digital disruption, new technologies are rapidly reshaping how compliance is practised and how financial crime is detected and prevented. AI has the potential to transform the role of risk professionals in the financial services sector. By automating

task-oriented activities, risk professionals can focus on strategic risk prevention, partnering with business lines to integrate controls into new customer journeys.

“Leveraging tech advancements such as AI, automation and data analytics within AML/CTF frameworks has become essential in today’s complex risk landscape,” banking analysts at PwC Australia said in a reporting, adding that the integration is critical, especially as banks confront rising costs and heightened expectations for effective financial crime risk management.

AI-driven intelligence is revolutionising investigations by empowering analysts

The Saudi Central Bank issued its ‘Counter-Fraud Framework’ in October 2022, where it mandates banks and other financial institutions to define, approve and implement a strategy for the sourcing/ development and implementation of counter-fraud systems and technology to manage fraud risks.

Similarly, the CBUAE issued a guidance note in October 2022 encouraging financial institutions to use ‘Digital ID’ systems – technology that uses electronic means to assert and prove a person’s identity online and/or in in-person environments – to perform customer due diligence.

OMAN IS ACHIEVING POSITIVE RESULTS IN THE USE OF FINANCIAL INTELLIGENCE, INTERNATIONAL COOPERATION, COMBATING

TERRORIST FINANCING AND IMPLEMENTING FINANCIAL SANCTIONS FOR PROLIFERATION FINANCING

– FATF

to process vast amounts of data and generate concise summaries rapidly. With the support of AI ‘co-pilots,’ risk managers efficiently pinpoint and scrutinise suspicious activities, significantly enhancing their effectiveness.

McKinsey said the adoption of AI allows risk professionals to contribute more effectively to business decision-making, including new product development and strategic planning. By leveraging GenAI, GCC banks’ risk professionals can proactively explore emerging risk trends, strengthen resilience and enhance risk and control processes.

The Qatar Central Bank, in its ‘AntiMoney Laundering and Combating Terrorism Financing Instructions,’ mandates financial institutions to maintain sufficient resources, including technology, to combat financial crime risk effectively.

AI is transforming risk management in the banking sector by enhancing efficiency, productivity and costeffectiveness. KPMG highlighted that AI’s potential to lower operational, regulatory and compliance costs for banks by efficiently processing and analysing large volumes of unstructured data with limited human involvement leads to more accurate credit decision-making.

The tactics employed by financial criminals are in constant changing, making the fight against illicit financial flows a perpetual and evolving challenge. The ongoing battle necessitates continuous innovation and adaptation. However, before deploying sweeping, large-scale solutions across an organisation, it is crucial to first address the fundamental, recurring challenges that underpin financial crime vulnerabilities.

Guidance Through Growth

In his exclusive interview with MEA Finance, Vinay Gandhi Global Head of GSAC and Regional Head of AMEE, Standard Chartered Global Private Bank, shares insights on how the Middle East wealth landscape is changing, the challenges and opportunities that come with intergenerational wealth transfer and what it takes to be a trusted advisor for families looking to build enduring legacies

The Middle East has experienced significant wealth growth in recent years. What is driving this and how is it reshaping private banking?

The Middle East continues to solidify its position as a key player in the global

wealth ecosystem. The region’s ultra-highnet-worth individual (UHNWI) population grew by 6.2% in 2023, according to the 2024 Knight Frank Wealth Report, making it one of the fastest-growing wealth markets globally. This expansion is fuelled by multiple factors including strong economic growth, rising foreign

investment, the acceleration of business diversification strategies and a thriving entrepreneurial ecosystem.

Countries across the region are implementing long-term economic transformation initiatives that are attracting both capital and talent. The rise of new industries, from technology to renewable energy, has created significant wealth-generation opportunities. At the same time, the region remains a major hub for family businesses, many of which are now reaching a stage where leadership transitions and intergenerational wealth transfers are becoming key priorities.

This rapid evolution is reshaping private banking in several ways. Clients today are more global in their outlook and expectations, requiring banking services and solutions that offer international reach, cross-border capabilities and bespoke financial strategies. They are also looking beyond traditional asset classes towards more sophisticated investment solutions, including private equity and sustainable finance.

Vinay Gandhi, Global Head of GSAC and Regional Head of AMEE, Standard Chartered Global Private Bank

At the heart of this transformation is the need for trusted advisors who can provide more than just investment management; as clients seek strategic guidance on wealth structuring, succession planning and legacy preservation.

For more than 170 years, Standard Chartered has partnered with some of the world’s most successful families supporting them navigate the complexities of preserving, growing and transferring their wealth to the next generation. With a presence in key wealth hubs worldwide and a long heritage in serving affluent families across generations, we are well-positioned to meet these evolving needs.

The Middle East is often acknowledged as a unique hub for managing substantial wealth. What draws HNW and UHNW individuals to this region, and how does it differ from other global financial centres?

The Middle East offers a unique combination of factors that attract HNW and UHNW individuals. First, the region has created a highly favourable environment for wealth preservation and growth through fiscal policies coupled with a stable political climate and a strong regulatory framework that fosters a secure investment landscape.

The region is also a central point for cross-border trade and investment. Its strategic location acts as a gateway between East and West, making it an ideal hub for individuals seeking to diversify their portfolios globally while being close to emerging markets.

Additionally, the region enjoys a strong emphasis on family businesses and succession planning which makes it particularly attractive to UHNW individuals looking to manage and transfer wealth across generations. Compared to other global financial centres, the Middle East stands out with its personalised approach to wealth management, with institutions offering tailored solutions that understand the cultural and familial

IN TODAY’S MARKET, WHERE ECONOMIC UNCERTAINTY IS PREVALENT AND GLOBAL MARKETS ARE SUBJECT TO RAPID SHIFTS, UHNWIS

REQUIRE EXPERT GUIDANCE TO NAVIGATE COMPLEX INVESTMENT DECISIONS

dynamics that influence investment decisions in the region.

As the region strengthens its position as a leading financial hub, private banking is evolving to meet the needs of a new generation of wealth creators and inheritors. From succession planning and cross-border investment strategies to sustainable finance and digital innovation, the industry is undergoing a profound transformation.

How does Standard Chartered Global Private Bank tailor its services to meet the complex cross-border needs of UHNWIs in the Middle East, and why is this important for their wealth management?

UHNWIs in the Middle East often have wealth that spans multiple regions, with investments in different sectors across continents. This brings a unique set of challenges when it comes to managing and growing their fortunes. As wealth becomes more international in nature, clients require financial solutions that not only cater to their immediate needs but also provide flexibility across borders.

At Standard Chartered Global Private Bank, we leverage our deep expertise and vast international network to offer cross-border solutions that align with our clients’ goals. Our ability to seamlessly integrate personal and business financial services across jurisdictions is a key advantage in this region. By offering access to a broad range of products, from investment advisory and structured lending to access to private market co-investment opportunities to family

governance and legacy planning, we ensure that our clients’ wealth is not only protected but is also optimally structured to grow across borders.

This capability becomes especially important for UHNWIs in the Middle East, as many of them are part of the increasingly global expatriate community, often with ties to Asia, Europe, or Africa. With a deep understanding of estate planning and cross-border investment strategies, we can offer solutions that cater to the diverse needs of this global community. Our seamless, one-bank approach ensures that whether a client is looking to structure investments in Asia or manage assets in Europe, they are getting the right guidance and strategic insights to grow and preserve their wealth for future generations.

What role does Standard Chartered Global Private Bank play in guiding UHNW clients, particularly in navigating the increasingly volatile global markets?

In today’s market, where economic uncertainty is prevalent and global markets are subject to rapid shifts, UHNWIs require expert guidance to navigate complex investment decisions. Standard Chartered’s Global Private Bank plays a pivotal role in delivering the insight and expertise necessary to make informed and strategic decisions.

We provide our clients with tailored asset allocation strategies, sectorspecific recommendations and in-depth market analysis to help them safeguard and grow their wealth. As global markets become more and more unpredictable,

our role becomes more crucial in helping clients identify and capitalise on investment opportunities, even in these uncertain times.

Through exclusive access to in-house research and the expertise of a global team with in-depth on-ground knowledge, clients are empowered to navigate market volatility with confidence, enabling them to better manage risk while taking advantage of opportunities that can enhance long-term growth.

How do you see the Middle East-Asia relationship evolving for HNW and UHNW investors, especially with the rise of Chinese and Indian wealth?

The Middle East and Asia are forming a dynamic financial corridor for HNW and UHNW investors. Chinese and Indian UHNW clients, often managing substantial wealth, are drawn to the region, in general and the UAE specifically, for its global connectivity. On the other hand, Middle Eastern clients with significant liquidity target Asia’s high-growth opportunities. This synergy thrives on shared economic goals and the region’s strategic role as a multipurpose hub.

As these cross-board wealth flows accelerate, investors require sophisticated financial solutions that transcend traditional markets. To address this, we at Standard Chartered craft precise, cross-border solutions ranging from complex investments to multigenerational planning; therefore ensuring our clients can navigate and capitalise on these evolving global opportunities with confidence.

Succession planning is often seen as a difficult conversation. What challenges do Middle East families face and how can they ensure a smooth transition?

For many affluent families in the Middle East, succession planning is no longer an afterthought; it is now a central pillar of their wealth management strategy. As family businesses transition to the

next generation, structured succession planning is essential to ensure continuity, stability and the preservation of both wealth and values.

As HNW and UHNW individuals and families accumulate significant wealth, they are increasingly focused on securing their financial future through succession and estate planning. Thoughtful legacy planning allows affluent individuals to shape legacies that not only safeguard their wealth but also incorporate their values and aspirations. Standard Chartered’s global team of Wealth Planning experts accompany these families along this journey, listening to their needs to help ensure that the distribution of assets meets the expectations and needs of successors.

It is worth noting that, historically, succession decisions were made informally within families, often without documented structures or legal frameworks. However, as businesses expand globally and wealth structures become more complex, families are recognising the need for a more formalised approach. Many are now adopting family constitutions, governance frameworks and structured estate planning solutions to provide clear guidelines on wealth distribution and business leadership transitions.

How are UHNW families in the Middle East redefining the concept of wealth beyond financial assets?

Ultra-high-net-worth families in the Middle East are expanding their definition of wealth beyond just financial assets. While preserving capital remains a priority, many are focusing on building a legacy that includes family values while having a long-term impact on society. This shift is being driven by a new generation of wealth holders who view their financial influence as a means to create meaningful change. One major trend we are witnessing is the rise of structured family governance. Many UHNW families are establishing formal frameworks, such as family constitutions, to ensure that future generations uphold family values and maintain cohesion in managing family wealth. Philanthropy is also another pillar of wealth strategy, with a growing number of clients setting up family foundations and impact-driven initiatives. Rather than traditional charitable giving, many are taking an entrepreneurial approach to philanthropy, aligning their business interests with causes they deeply care about.

At Standard Chartered, we help families navigate this broader view of wealth by integrating wealth planning and governance advisory into our advisory services, ensuring that the legacy of families extends far beyond financial returns.

With competition intensifying, how can private banks differentiate themselves in the regional market?

The increasing number of wealth management players in the region is ultimately a positive development for clients, as it drives innovation, better service and greater investment choice. However, differentiation in private banking does not come from products alone, it comes from deep client relationships, global connectivity and a true understanding of multi-generational wealth needs.

One of the reasons families choose Standard Chartered is our ability to offer both global reach and local expertise. With a presence in 53 markets and a strong network across Asia, Africa, the Middle East and Europe, we provide clients with access to international opportunities while ensuring their wealth strategies are aligned with local regulatory and economic conditions.

Another key differentiator is our heritage in serving family offices and UHNWIs. With over a century and a half of experience advising wealthy families, we understand that managing generational wealth goes beyond financial returns. It is about structuring assets for longevity, fostering responsible stewardship among future generations, and creating a meaningful impact through philanthropy and sustainable investing.

How is technology reshaping wealth management for HNW and UHNW clients in the Middle East, and what’s Standard Chartered’s approach?

Technology is undoubtedly transforming the private banking sector globally offering extra personalisation, predictive analytics and real-time decision-making. While many banks focus on digital innovation and standardisation, Standard Chartered takes a dual approach: blending digital innovation and personalisation.

As such we integrate advanced digital tools with deep advisory expertise; ensuring that technology enhances, rather than replaces the personal relationships our clients value. Our digital-first model combines cutting edge platforms with face-to face advice, providing realtime access to financial information, advanced analytics and a user-friendly experience. By leveraging disruptive technologies and data analytics, we deliver personalised recommendations, allowing our clients to make informed decisions. This technological edge equips our clients with the tools they need to navigate complex financial landscapes and capitalise on emerging opportunities.

Looking ahead, what will define the next era of wealth management in the region?

I believe that the future of private banking in the region will be shaped by three major forces: the continued rise of intergenerational wealth transfer, the integration of sustainability into investment strategies and wealth planning and the increasing globalisation of family wealth.

Wealth is being passed to a new generation that thinks differently. These successors are tech-savvy, globally connected and deeply committed to impact-driven investments. This shift requires private banks to move beyond traditional advisory and offer solutions that align with new priorities, including green finance, venture capital and digital assets.

At the same time, as families expand their international footprint, they need trusted partners who can provide crossborder wealth planning, regulatory expertise and seamless financial solutions across multiple jurisdictions. This is where experience, heritage and a long-standing commitment to private banking become invaluable.

Ultimately, the next era of wealth management will belong to those who can combine deep personal relationships, cutting-edge digital capabilities and a global perspective; therefore, ensuring that wealth is not just preserved but continues to create value across generations.

Given your extensive knowledge of wealth across Asia, in terms of size and sophistication, how do you see our regional wealth management markets comparing with them by the decade’s end?

Asia has long been a frontrunner in wealth creation through financial innovation and investment sophistication. These markets have well-established private banking ecosystems, supported by strong regulatory frameworks, advanced investment platforms and deep capital markets. However, the Middle East is rapidly emerging as a strong player on the global wealth arena, driven by a combination

of accelerated wealth accumulation, progressive financial reforms and the rise of world-class financial hubs. The region’s growing influence in global capital flows and investment strategies signals its increasing sophistication and competitiveness.

One of the key factors driving the region’s rise in global wealth rankings is its unique blend of established family wealth and newly created fortunes. Long-standing family businesses continue to play a central role in the economy, providing a foundation of entrepreneurship and stability. At the same time, the younger generation of wealth holders is introducing fresh perspectives such as embracing technology, impact investing and alternative asset classes. This fusion of tradition and modernity is shaping the evolution of private banking in the region, creating a more dynamic and globally relevant wealth management ecosystem.

Another significant advantage for the Middle East is its strategic position as a global investment hub. Cities like Abu Dhabi, Dubai, Doha and Riyadh have invested heavily in building financial ecosystems that attract both local and international capital. Regulatory advancements, investorfriendly policies and enhanced financial infrastructure are strengthening the region’s appeal to global wealth holders. This, combined with its role as a key bridge between Asia, Europe and Africa, positions the Middle East as a compelling destination for wealth management and investment diversification.

As such, we expect by the end of the decade for the region’s private banking landscape to reach new levels of sophistication, with broader investment solutions and a stronger emphasis on succession planning and family governance. As this transformation unfolds, I believe that the region will not only rival Asia’s leading wealth centres but will likely carve out its own distinct role as a global hub for sophisticated wealth management.

Competitive Advantage

MEA Finance asked Niels Zilkens UBS Head WM Middle East, to share his insights on the region’s rapidly evolving wealth management landscape, touching on transformational growth, family succession planning, the increasing use of AI and how clients will benefit from intensifying competition

What key factors are fueling the growth of wealth management across our region?

The Middle East is undergoing a significant transformation, with countries like Saudi Arabia and the UAE leading the shift from oil-dependent economies to embracing innovation and addressing global issues like climate change. This visionary approach is shaping the region’s economic, societal and cultural renaissance, as it re-emerges as a global influencer.

Consequently, we have seen a tremendous migration of people and capital to the region, seeking to participate in this exciting opportunity. The robust economic growth and transformation foreseen for the region over the coming decade sets it apart from the rest of the world - and has important implications: not only will this region continue to attract wealth in future, it will also create more wealth within the region, with a strong entrepreneurial class driving expansion of the High Net Worth segment.

Deloitte’s International Wealth Management Centre Ranking in 2024 for asset size shows Bahrain and the UAE at eighth and ninth positions, respectively. Will regional booking centers rank higher by 2030?

The desire to diversify assets across jurisdictions is a consistent theme

we hear from our clients. We strongly believe that having global multi-shoring capabilities will become increasingly important for global wealth managers.

Clients are globally mobile and need an offer that reflects this, including multishoring competences. The Middle East is certainly part of the conversation when clients discuss the diversification of their assets, and the region is clearly increasing its share of global assets. There are numerous reasons for this, including a business-friendly environment, robust infrastructure, sound regulatory landscape and great connectivity both within the region and also to Europe, Asia and Africa.

Succession planning has been a much-debated regional concern in recent years. Is it now being satisfactorily addressed?

As wealth transfer is accelerating, succession planning is increasingly in focus, and families are demanding sophisticated services and support. They see uniting the generations as a vital task.

Neils Zilkens, Head of Wealth Management, Middle East at UBS

Wealthy families often plan the transfer of ownership of wealth as a matter of course, although not always.

Our Global Family Office Report 2024 found that just 47% of family offices have a wealth succession plan for family members. Even fewer communicate and collaborate, unfortunately failing to understand the importance of finding a common purpose among family members.

But we see a growing awareness among wealthy families in the Middle East of the need to educate the next generation, as well as rising interest in professional family office services based on international best practices to retain control over the family’s wealth. Family offices are often organisationally separate from the family’s operating business.

To support families in the transition of wealth and responsibilities, we have been running highly successful, dedicated programs for next-generation clients for over 20 years. Our approach is individualised to ensure we deliver bespoke support, while looking at the next generation in their own right, and helping them to achieve their entrepreneurial, investment and social ambitions, and turn these into legacies.

Governing bodies like family assemblies, family councils, business councils and investment committees have a role to play. They ensure a family operates in line with its values and goals, and help family members to make the right decisions, communicate effectively and avoid conflict. But it is essential to set them up properly with the right rules and procedures. Bringing and keeping families together is no easy task, and our family advisory specialists are experts at supporting and guiding our clients.

As AI technology makes tailored financial services more accessible and inclusive, how can regional private banking define itself?

The world is leaping headfirst into the AI era. Our 160-year history shows that successfully harnessing new developments requires a culture

of innovation, collaboration and experimentation. At UBS, technology plays a crucial role in delivering and enriching the client experience. It is a clear differentiator, helping us to deliver better outcomes for our clients and employees.

We are focused on two key pillars: enhancing everyday productivity and reshaping business capabilities. We are scaling AI across our firm to drive growth, enhance how we serve and safeguard our clients and increase our productivity. By combining our Chief Investment Office insights and leading technology with the expertise and ingenuity of our advisors, we help clients find investment opportunities and take advantage of the changing AI landscape.

After all, at UBS we know what sets us apart. It is our people and our unwavering client focus that places clients at the heart of everything we do,

But I also think that competition will force firms into tough decisions on how to best position themselves. We have many tailwinds, from the growth and wealth creation now underway. However, there are also headwinds in terms of costs and margin compression. The regulatory, compliance and technology resources required today continue to rise.

At the same time, certain parts of the market, specifically sectors of the public markets, are being commoditised with pricing pressure from areas like online platforms. So firms will either need sufficient size to achieve economies of scale, or have to offer a specialised focus that delivers premium services. Those in the middle will likely find it very challenging.

UBS differentiates itself in that we have both. We are one of the only global banks with wealth management as a

THE DESIRE TO DIVERSIFY ASSETS ACROSS JURISDICTIONS IS A CONSISTENT

THEME WE HEAR FROM OUR CLIENTS

regardless of market cycles or technological change. Our ambition is to become a fully AI-enabled institution where employees leverage AI tools for improved productivity and clients benefit from a highly personalised experience.

What will be the effects on those operating in the regional market, and their clients, of the growing and increasingly competitive wealth management sector?

Competition is generally healthy in any sector, and I certainly believe this applies to the regional wealth management sector, with clients being the biggest beneficiaries, as players improve their offers in order to compete successfully.

core business. We have the full range of capabilities, including global banking, global markets and asset management, but our DNA is wealth management. This makes a difference in terms of how we prioritise our resources and capabilities, and is reinforced by our size.

With over USD 5 trillion of global AUM, we are the world’s largest truly global wealth manager. Scale matters in terms of a bank’s research, platform and capabilities, not to mention global connectivity. When these are combined with our local presence, local knowledge and client proximity, I believe we have an offering that stands out from our competitors.

Forward Thinking

In his overview of the local wealth markets, Ranjit Khanna Head of Private Banking, Europe & Middle East and Chief Executive, DIFC Branch, Bank of Singapore describes the conditions and requirements for wealth management institutions aiming for success in our region

What key factors are currently fuelling the growth of wealth management across our region?

The wealth management sector in this region is experiencing unprecedented growth, driven by a confluence of

economic transformation, regulatory advancements and the rising affluence of high net worth and ultra-high net worth individuals. As countries across the Middle East and South Asia continue to diversify their economies, financial hubs such as Dubai are becoming increasingly attractive destinations for wealth

structuring and investments. This shift is also supported by a maturing regulatory framework that enhances transparency, governance and investor confidence. Another significant trend is the growing influence of family offices. More wealthy families are institutionalising their wealth management strategies, adopting structured governance models and seeking professional advisory services.

Additionally, investment preferences are evolving, with a shift towards alternative assets and sustainable finance. The appetite for sophisticated wealth solutions is at an all-time high, making it imperative for private banks to offer tailored strategies that address both the financial and legacy aspirations of their clients.

Succession planning in the region has been a much-debated concern in recent years, so is it now being satisfactorily addressed?

Succession planning remains a critical priority, but the conversation has evolved. While historically viewed as a sensitive topic, it is now recognised as a strategic necessity.

We have witnessed a shift in clients’ behaviours in the recent years when it comes to the broader wealth planning agenda. Trusts and foundations are increasingly being used as tools to support the transition process and the necessary planning from a governance standpoint is being built into such structures. Conversations around these planning tools have become integral to the wealth planning process. Regional developments and the introduction of Foundations and Trusts to the Abu Dhabi Global Market (ADGM) and Dubai International Financial Centre

Ranjit Khanna Head of Private Banking, Europe & Middle East and Chief Executive, DIFC Branch, Bank of Singapore

(DIFC) have certainly contributed to the awareness and comfort with such structures regionally.

Today, the conversation has also evolved to recognise that a transition is an active process between the current generation and the next generation (next gen) as opposed to a passive one where the next gen may just be passive recipients of wealth.

The role, involvement and participation of the next gen is increasingly being recognised as pivotal and as such, there is an increased focus on empowering the next gen. This is being done through the formal mentoring and education of the next gen, and above all, actively engaging them in dialogue about their expectations and desires regarding their role in the transition process.

What this means for many families is that the way they grow and protect their wealth is changing. Where historically the focus has been on the family business (operating company), today we are seeing an increasing focus on investment and diversification and the deployment of the Single-Family Office (SFO). This is not to say that the operating company is disregarded, but the SFO model is increasingly enabling the active involvement of the next generation of family members, allowing them to make their own mark.

We expect to see the increased use of SFOs as powerful tools for succession. They provide a centralised structure for holding and managing family assets, ensuring that the financial, legal and strategic elements are seamlessly coordinated, while allowing for flexibility in terms of the form they take and how such elements can be tuned to meet the specific needs of the family.

As AI technology makes tailored financial services more accessible and inclusive, how can regional private banking define itself?

The rise of AI in financial services is reshaping client expectations, particularly

in the terms of personalisation and efficiency.

AI-driven insights allow for more precise investment strategies, real-time risk assessment and enhanced client engagement. However, while technology has made wealth management more accessible, the essence of private banking remains deeply rooted in trust, relationships and bespoke advisory.

In this region, where clients value long-term partnerships, the role of the private banker remains irreplaceable. The key to differentiation lies in striking the right balance between technology and human expertise. AI can enhance decision-making and streamline

WE EXPECT TO SEE THE INCREASED USE OF SFOS AS POWERFUL TOOLS FOR SUCCESSION

processes, but the ability to understand complex family dynamics, anticipate client needs and provide tailored strategic advice is where private banks will continue to stand out.

At Bank of Singapore, the focus on technology and digitalisation extends beyond enhancing client experience. We also prioritise improving staff productivity and empowering them to perform more effectively. In this aspect, we launched a new generative AI tool last year for our Relationship Managers (RMs). The tool provides RMs with a robust, real-time overview of the latest investment insights, taken from research content produced by our Chief Investment Office.

With the tool, RMs are better equipped to engage clients with more relevant talking points and drive an exceptional client experience. A core aspiration is to leverage AI to add further personalisation to the overall operation by applying client profiling data for further personalised responses.

What will be the effects on those operating in the regional market, and their clients, of the growing and increasingly competitive wealth management sector?

The intensifying competition in the regional wealth management sector is reshaping the landscape for both financial institutions and clients. With more players entering the market, differentiation is becoming increasingly critical. Private banks must go beyond traditional investment management to offer holistic solutions that encompass wealth structuring, philanthropy, next-gen engagement and exclusive investment opportunities.

For clients, this heightened competition translates into greater access to specialised services, enhanced product innovation and more tailored financial solutions. Expectations are also rising – clients are seeking more than just financial returns; they want a banking partner who understands their long-term aspirations, family values and legacy goals. As a result, private banks must continuously refine their offering, ensuring they remain not only relevant but indispensable to their clients. At the same time, the regulatory environment is evolving to accommodate this growth, with an increased focus on governance, compliance and transparency. As private banks adapt to these changes, the ability to build longterm trust will become a defining factor in success. Talent acquisition is also emerging as a competitive differentiator, as private banks compete to attract and retain top-tier relationship managers and wealth advisors who can deliver the hightouch experience that clients expect.

Middle East SMEsNurturing the Future Economies of our Region

The timely and incisive debates held at the 2025 MEA Finance SME Business & Finance Summit on the 26th of February in Dubai, acknowledged the vital role of SMEs in regional economies, and brought to light how recognition of their business potential to banks and finance providers is boosted by technology and governmental initiatives

Over the past decade, the GCC has undergone a profound transformation, building on international best practices and synergising national strategies to achieve tangible results. Historically known for their vast oil reserves, the

GCC states have been diversifying their economies, creating an entrepreneurial landscape ripe with opportunity.

Saudi Arabia’s Vision 2030, Oman’s Vision 2040, the Dubai Economic Agenda D33 and We the UAE 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 unlock the full potential of the private sector, especially SMEs, GCC countries are implementing comprehensive support programmes that prioritise SME competitiveness to foster organic economic growth and a dynamic marketplace.

“The ecosystems that GCC countries established to nurture, fund and scale SMEs and startups are maturing. Gulf funders – from sovereign wealth funds to venture capitalists to family offices – are looking to write cheques to entrepreneurs closer to home,” said the World Economic Forum.

However, the essential role of SMEs in GCC economic growth and diversification is being undermined by a critical funding gap, where lending stands at a mere 3%, resulting in a $250 billion credit shortfall. While government-backed institutions

are increasing SME lending, the sector still struggles with economic and SMEspecific challenges exacerbated by trade policy and geopolitical uncertainties.

Deloitte said that government-backed development finance institutions and banks in the Middle East are a step in the right direction in providing financing, coupled with capability development for SMEs.

MEA Finance hosted our SME Business and Finance Summit, which was themed Nurturing the Future Economies of our Region, on February 26 in Dubai. The event brought together key stakeholders from banking, finance, entrepreneurship, technology and government, all actively collaborating to build and support a vibrant SME and startup ecosystem across the Middle East.

“We had a significant discussion with the authorities three years ago, led by the Central Bank of the UAE, along with the UAE Banks Federation and numerous other entities, including the Emirates Development Bank (EDB), a key supporter of SMEs in the country,” Jamal Saleh, Director General of the UAE Banking Federation (UBF), said in his welcome remarks.

“The central question was: what needs to be done to successfully promote and attract SME investors and foster an environment for startups and SME growth? We have approximately 200,000 SMEs in the UAE, which collectively employ over 90% of the nation’s workforce.”

Saleh emphasised that the discussions pinpointed three essential service levels

RECOGNISING THAT STARTUPS AND SMES OFTEN LACK THE SUBSTANTIAL TANGIBLE COLLATERAL TYPICALLY REQUIRED FOR CREDIT, THE EMIRATES DEVELOPMENT BANK CREATED ITS CREDIT GUARANTEE SCHEME. THE SCHEME SUPPORTS SMES OPERATING IN SPECIFIC

SECTORS AND MEETING CERTAIN OWNERSHIP CRITERIA (IT’S NOT INTENDED FOR LARGE CORPORATIONS)

– Jamal Saleh

for SMEs: straightforward bank account opening, seamless payment processing (both receiving and making payments, including POS terminals for card transactions) and access to financing for business growth.

“Recognising that startups and SMEs often lack the substantial tangible collateral typically required for credit, the EDB created its credit guarantee scheme. The scheme supports SMEs operating in specific sectors and meeting certain ownership criteria (it’s not intended for large corporations),” Saleh explained.

He underscored that under the scheme, the EDB provides a guarantee of up to a certain percentage, such as 60% or 70%, depending on the specifics. The guarantee enables banks to mitigate financing risk and become more willing to provide financing to these businesses.

Meanwhile, digitisation is non-negotiable for small businesses today. A study by Mastercard shows that 75% of SMEs and entrepreneurs incorporate digital tools into their daily operations, with two-thirds emphasising the importance of a seamless digital experience for their success.

Generative AI (GenAI) is projected to add $21-$35 billion annually to the GCC economy, building on the $150 billion potential of other AI applications. The growth presents a powerful opportunity for SMEs to drive substantial performance and innovation improvements, including

financial management and human capital management.

Saleh also addressed the difficulties SMEs often encounter when resolving issues with banks. He highlighted the establishment of an independent complaint authority, a concept common in more developed jurisdictions known as an Ombudsman.

Last year, the UAE central bank launched Sanadak, the first financial ombudsman in the MENA region and a fully independent entity for handling complaints. To address the challenges of making and receiving payments, Saleh said the central bank had unveiled a domestic payment scheme called Aani. Al Etihad Payments, a unit of CBUAE and operator of Aani, also launched Jaywan – a domestic card that facilitates payments within the UAE in dirham.

Governments in the Middle East 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.

The ecosystem of success

The Middle East boasts a thriving SME ecosystem, including numerous startups. GCC scale-ups and 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.

Moderator Saad Ansari , CEO and Co-founder of Xpence, led a panel discussion titled “ Why Would You Do that? - The Life of a Regional SME Entrepreneur.” The session looked at the motivations for starting a business and delved into the question of whether small businesses receive equitable treatment from banks and essential service providers. It also highlighted the various ways public and private organisations are supporting SMEs and entrepreneurs beyond just financial assistance.

The discussion had the participation of Hamed Ahli, Head of Free Zone Leasing and Licensing with Meydan Free Zone; Mohamed Khaled, Founder of Hotdesk; Charles DerSahakian, Managing Partner at CVML; George Hojeige, Chief Executive Officer of Virtuzone and Christoph Koster, Chief Executive Officer at ruya.

Ansari kicked off the panel by highlighting that the life of an entrepreneur is truly a rollercoaster, often bringing both incredible highs and challenging lows within a single day. “It can be an extremely isolating and difficult journey,” he said.

Governments in the Middle East support innovative entrepreneurship and offer business accelerators, financing services and sponsorship programmes to entrepreneurs from around the world. SMEs and startups in the region are witnessing notable development and growth, and Careem, HungerStation,

Noon, Jahez, Kitopi and Aramex are some of the region’s success stories.

“Entrepreneurs often begin their journey with partnerships, which is a foundational step. However, like marriage, choosing a partner requires thorough due diligence. A common pitfall is when partners fail to maintain alignment on their vision and goals,” said DerSahakian.

He underscored that many small business owners and entrepreneurs fall victim to the “cash flow mirage.” “Entrepreneurs focus on projected numbers rather than actual accessible funds. Cash flow can disappear rapidly, especially in a high-operating-cost environment such as the UAE. Maintaining a strong grasp on cash flow is critical for sustainability.”

The World Economic Forum said that private-sector expansion is the key to national ambitions in the Middle East, especially the six-nation GCC bloc while noting that GCC governments will be increasingly looking to small businesses and entrepreneurs as engines of job creation and innovation.

Hojeige said entrepreneurs are often highly passionate individuals with a clear vision for their business and specific objectives they aim to achieve.

However, he emphasised that the journey from obtaining a trade licence at Virtuzone to achieving unicorn status is a significant undertaking while noting that the media often highlights rapid success stories and multi-billion-dollar valuations, but it is crucial to understand that these are the exception, not the norm.

“The most fundamental aspect of any business is profitability – having a healthy bottom line. It’s essential to start small and build the business step by step, without skipping crucial stages,” Hojeige said while noting that the entrepreneurial journey begins with a well-thought-out business plan.

“We encounter many individuals starting businesses who present their ideas, but when asked about their monetisation strategy or revenue model, it quickly becomes apparent that their business is unlikely to generate income.

The idea might be innovative, but the underlying business model is flawed.”

The region is witnessing a surge in entrepreneurship as countries diversify their economies, supported by significant government investment in infrastructure and the establishment of conducive regulatory frameworks, creating a highly favourable ecosystem for startups and SMEs.

Quizzed about what Meydan Free Zone is doing to enable its customers to open bank accounts and access financial services, Ahli said that the free zone operator established a dedicated team and proactively engaged with banks to establish service level agreements and formal agreements.

“Our first crucial step was to bridge the perception that free zones were generally perceived as high-risk entities, leading to extensive due diligence and compliance procedures. We requested banks to meet with our compliance team,” said Ahli.

He explained that the meetings between Meydan Free Zone’s compliance team and bank CEOs proved invaluable, as the banks recognised that our compliance standards were often as robust, “if not more so, than their own.”

Over the past three years, Meydan Free Zone has refined its strategy with remarkable results. “For clients with specific business activities, we now direct

them to banks based on pre-existing agreements. For instance, we have partnerships with Misr Bank and Bank of Baroda, allowing us to align specific nationalities and business types with the most suitable banking partner,” added Ahli.

Governments in the Middle East 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.

Koster concurred with Ahli that the improvements in bank account accessibility over the past few years are a positive step, especially with initiatives such as the partnership with Meydan Free Zone, making the process significantly smoother.

“The focus on simplifying the account opening process and truly understanding the needs of businesses, as you’re doing with your platform and partnerships like the one with Meydan Free Zone, is crucial for fostering a thriving entrepreneurial environment,” said Koster.

He emphasised that while venture capital funding grabs headlines, it is clearly not the solution for most businesses seeking to scale and this

is precisely where the emergence of fintechs such as Xpence, Ziina, Mamo, Stripe and Pemo has been so impactful –“they’ve stepped in to fill the gaps left by conventional banks.”

The SME sector serves as a cornerstone of Middle Eastern economies, driving job creation and economic expansion. Khaled said that the proverb saying that one hand cannot clap by itself perfectly encapsulates the importance of a strong and supportive ecosystem for businesses to thrive.

“The UAE, Dubai in particular, has fostered an incredible community where entrepreneurs can find the necessary support networks, from talent acquisition and banking partners to legal and accounting services and organisations like Virtuzone,” said Khaled.

“The shift towards AI-powered efficiency has cascading effects across the entire business landscape. Banks can leverage AI for faster onboarding and more accurate credit assessments, free zones can automate processes for quicker licence issuance and businesses can leverage the transformative technology to operate at an unprecedented pace.”

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 region are actively implementing programs to stimulate the growth of SMEs, including startups.

John Casey, the Managing Director of Taxready.ae, gave a presentation on why tax is “undeniably a crucial aspect of running a business.”

Casey observed that Taxready.ae’s growth from solely supporting Virtuzone clients to serving over 10,000 companies demonstrates the substantial need for clear tax guidance among SMEs. The clarification regarding the AED 375,000 threshold for businesses not qualifying for free zone exemptions provides a clear benchmark.

“Based on our extensive interactions with thousands of companies, the fact that only around 10% have found themselves

in a taxable position truly highlights just how supportive the UAE’s tax environment remains for SMEs and startups.”

Casey said that it is reassuring to hear that the Federal Tax Authority and the Ministry of Finance have indeed been accommodating to this sector, aiming to minimise the impact of corporate tax.

Balancing the books

The Middle East’s dedication to innovation is evident in its active investment landscape, where sovereign wealth funds, private investors and venture capitalists foster entrepreneurship while fuelling the growth of promising startups.

The discussion titled Balancing the Books - Liquidity, Funding, Credit and Debt was moderated by Neelam Verma, the CEO and Co-Founder at Wealth Link Solutions and Regional VP for the UAE at EUCED – EEIG.

The panel was joined by Jyoti Ranjan, Head of Business Banking at Ajman Bank; Ali Nanji, Regional Sales Director for the Middle East at Backbase and Hussain Korji, Chief Financial Officer at Ruya Partners.

Verma said that SMEs are undeniably the backbone of the UAE’s economy.

“The statistics speak for themselves: roughly 95% of businesses here are SMEs, employing an impressive 86% of the workforce – underscoring the vital role the sector plays in our economic landscape. However, despite their significant contribution, access to finance remains a considerable challenge for SMEs,” she said.

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

Quizzed about the accessibility of SME financing in the Middle East, Ranjan said that the availability of funding for SMEs depends on several factors, including the current economic cycle, the specific sector the SME operates within, the company’s financial strength and other relevant parameters.

“There are actually numerous financing options available to SMEs today, both in the short term and the long term. For working capital needs, we see instruments like Letters of Credit, Invoice Financing and Post-Dated Cheque discounting. For longer-term investments, incumbent banks offer options such as capital expenditure (capex) financing, machinery finance, warehouse financing and financing for office purchases,” said Ranjan.

He highlighted that SMEs can also tap into alternative sources of financing, including fintech lenders, private equity partners, venture capitalists and various government support initiatives, such as the Mohammed bin Rashid Innovation Fund.

“Small businesses with turnovers between AED 5 million and AED 15 million sometimes find it particularly difficult to secure financing, as some banks may not

ENTREPRENEURS OFTEN BEGIN THEIR JOURNEY WITH PARTNERSHIPS, WHICH IS A FOUNDATIONAL STEP. HOWEVER, LIKE MARRIAGE, CHOOSING A PARTNER REQUIRES THOROUGH DUE DILIGENCE. A COMMON PITFALL IS WHEN PARTNERS FAIL TO MAINTAIN ALIGNMENT ON THEIR VISION AND GOALS

– Charles DerSahakian

actively cater to this specific segment. However, this is where fintech partners and other alternative sources of financing chip in,” added Ranjan.

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

From a private lending perspective, Ruya Partners’ Korji said that the lending landscape is indeed changing and the trend is likely to continue.

“With ongoing regulatory developments such as the Basel III endgame and the upcoming Basel IV implementation in 2025 and 2026, stringent regulations will persist, which will naturally lead incumbent lenders to optimise their balance sheets further,” Korji added.

“The lending landscape has evolved beyond the traditional two-way street of direct lending and securitisation. Private credit has emerged as a significant player, particularly in the space where SMEs might face challenges in securing loans from traditional lenders,” he said.

Korji further explained that the shift from a low-interest rate environment a couple of years ago, where borrowers could easily take on loans at seven times their earnings before interest, taxes, depreciation and amortisation (EBITDA), to the current higher interest rate scenario, where borrowing capacity is now closer to three times EBITDA, has created a natural funding gap.

The inability of traditional banks to address the shortfall will naturally lead to private capital covering the deficit.

However, the initiatives that GCC states are implementing aim to provide SMEs with the necessary resources, support and guidance to expand theiroperations,enhance their competitiveness and contribute significantly to the regional economy.

lending structures where credit facilities are tied to the achievement of defined milestones by early-stage startups.

Meanwhile, venture capital investment in the Middle East surged four times from 2017 to 2022 and maintains a rapid 24% annual growth rate, exceeding most global averages. Startups in AI, specialised online marketplaces, climate tech, delivery apps, fintech, edtech and investment platforms are receiving sizable investments.

On private credit lenders’ approach to risk assessment, Korji said that while having proper governance in place does not guarantee funding, it is a crucial way of building long-term confidence with the broader business community and within your organisation.

“Operating in today’s environment, we understand that SMEs can’t have every specialist function in-house. However, there are viable solutions, such as outsourcing internal audit functions or engaging risk officers,” he added.

Similarly, development funds, banks, private equity and insurance institutions in the Gulf region are also extending support to SMEs.

GCC sovereign funds are looking to invest more at home so that they can drive private-sector growth at the heart of the region’s national strategies.

Saudi Arabia’s Public Investment Fund is rebalancing its portfolio towards new domestic industries and projects, while Abu Dhabi’s Mubadala invests in innovative young companies to support its economic diversification.

Similarly, the Qatar Investment Authority unveiled the Fund of Funds programme in February 2024, committing over $1 billion to promote innovation and empower local and regional entrepreneurs.

On the role of fintechs and the concept of embedded finance, Nanji said that the role of embedded finance in SME financing is fundamentally tied to the fact that banks today possess a vast amount of data.

However, the million-dollar question is how good that data is and it all depends on what information was collected, how it was processed and ultimately, how it is being utilised.

Building on client or customer data, Nanji highlighted that traditional banks are well-positioned to utilise AI and other cutting-edge technologies to obtain live, granular data on businesses. For example, by analysing an e-commerce platform, banks can track sales frequency, identify top-performing products, understand geographical sales patterns, monitor sales timing and assess profitability in real time.

The wealth of information directly complements a core competency of banks: their deep expertise in risk management and the development of customised financial products. Ultimately, this is their fundamental purpose.

The detailed insights gleaned from such technological integration make it highly practical for incumbents to design

Mirroring the CHIPS Act’s impact on the US high-tech sector, governments in the Middle East are promoting startup innovation by reducing operational hurdles, easing bureaucracy and creating investment avenues for local entrepreneurs and venture capital firms.

Ranjan concluded by highlighting that the SME financing ecosystem is undergoing a significant transformation.

“We are likely to see even more innovative financing options emerge as digital innovation and AI become more integrated. Furthermore, businesses and SME clients that prioritise ESG principles and demonstrate a commitment to sustainability will likely find themselves with more competitive offers from banks,” said Ranjan.

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.

From startup to scale-up

The entrepreneurial journey is thrilling yet fraught with complex decisions that shape a venture’s trajectory. From inception to scale, founders must weigh critical choices, balancing risk, ambition and practicality.

Paul Bryson , Managing Director of Virtuzone, moderated the Decisions, decisions - Your fateful first steps panel, which had the participation of Ishan Kathuria, Partner at PwC; Wafa Salim Balaswad Alderei , Director Freezone Operations at Sharjah Research Technology and Innovation Park; Charles DerSahakian, Managing Partner at CVML and Rehan Ali, Head of Business Banking at the National Bank of Fujairah.

DerSahakian said that starting a business should always begin with clearly defined business goals, which then inform the business model, while noting that right from the outset, ensuring you are on solid legal and regulatory footing is paramount.

“We often see businesses flocking to free zones in the UAE, attracted by the perceived lower costs and tax advantages. However, they sometimes later realise that their primary client base is on the mainland and the initial cost savings in the free zone become an obstacle to effectively serving those clients.”

He emphasised that proper planning should take precedence over other immediate decisions and it should

encompass projected headcount over the next five years, the location of your primary client base, the nature of your services as well as the main operational hub of your business, among others.

The necessity of making difficult decisions can be a challenge for entrepreneurs, yet it is through these very choices that growth opportunities frequently emerge. Successful SMEs or startups focus on defining a target market in which they have something distinctive to offer, customers are keen to buy and the market is large enough to be meaningful.

PwC’s Kathuria concurred with DerSahakian, saying that many companies initially opt for a free zone setup because it appears to be the most cost-effective option. However, he highlighted that these companies often later realise that their core business model does not align well with either the free zone or their mainland operations.

Kathuria emphasised that the primary consideration, even before tax and other factors, should always be your fundamental business goals. “What are you aiming to achieve? For instance, if you’re in the goods business and your primary activity is importing and then re-exporting outside the UAE, then establishing in a designated zone could be very advantageous,” he explained.

Understanding your customer base is crucial, said Kathuria. “If your customers are predominantly located in the

“ENTREPRENEURS AND SMALL BUSINESS OWNERS NEED TO ANALYSE THE COMPETITIVE NATURE OF THE MARKET OR INDUSTRY THEY ARE ABOUT TO ENTER. WHAT WE’RE OBSERVING IS AN INCREASINGLY COMPETITIVE AND REGULATED ENVIRONMENT, WHICH, IN A WAY, IS POSITIVE AS IT PROVIDES GREATER CLARITY AND TRANSPARENCY

– Rehan Ali

mainland, then setting up your operations there might be more beneficial and taxefficient in the long run, considering both costs and overall business operations.”

McKinsey said that robust market discovery, particularly in product, R&D, design and marketing, is crucial for any organisation while noting that successful entrepreneurs iterate between product development and market validation, often with a primary focus on sales, product or tech.

Whether in Dubai, Riyadh or Doha, a significant advantage for small businesses to flourish is strategically choosing their location, be it within a free zone or on the mainland. While free zones offer benefits such as full foreign ownership and tax exemptions, the ‘best’ location or zone hinges on the specific industry and target market.

From both an entrepreneurial and banking perspective, Ali emphasised that having a clear and robust business plan in place is absolutely fundamental.

“Entrepreneurs and small business owners need to analyse the competitive nature of the market or industry they are about to enter. What we’re observing is an increasingly competitive and regulated environment, which, in a way, is positive as it provides greater clarity and transparency,” Ali said, adding that it is crucial to know precisely where you want to position your business, especially for a startup.

Banks strive to support both new and existing customers, offering guidance to tailor and customise our products to their specific needs.

“We strongly encourage companies facing any issues or problems to reach out to us early for discussion. We are here to help and provide support. It’s also vital for businesses to stay informed about industry developments. There’s no harm in obtaining third-party reports on ongoing industry trends,” National Bank of Fujairah’s Ali added.

Balancing professional ambition with personal life is another crucial consideration. While startups offer

immense autonomy, they often come with demanding hours. Franchising, on the other hand, provides a more established framework, potentially offering a better work-life influence due to pre-defined operational procedures. However, it sacrifices some creative control.

Taking a leaf from her entrepreneurial journey and being an Emirati, Alderei shared that the common perception is that free zones often present greater advantages for international investors, providing benefits like 100% ownership and tax exemptions without requiring a local sponsor.

However, Alderei emphasised that the reality of starting a business is that entrepreneurs will inevitably face challenges. “The challenges can lead to failures, which can be disheartening. But they can serve as crucial stepping stones, propelling the business forward. It was through this experience that I realised the significant importance of having a proper structure and plan from the outset.”

Alderei believes that free zones could be beneficial for SMEs and startups to test

the market they are venturing into initially. “Several entrepreneurs aren’t entirely sure of the landscape they’re entering. A free zone allows them to gauge the market, understand the existing dynamics, and learn from others’ experiences,” she added.

Moreover, securing funding is a perennial challenge for the majority of entrepreneurs and SMEs in the Middle East. While small businesses in the region will not receive direct funding from sovereign wealth funds or venture capitalists, industry experts say they stand to benefit significantly from the widespread economic boost generated by substantial regional investment and expenditure, particularly in logistics infrastructure, AI, clean energy and climate adaptation.

Bryson concluded by highlighting that there are a multitude of decisions to make when setting up a business, driven by the numerous options available through the various free zones, mainland jurisdictions and corporate structures.

“The abundance of choice is ultimately a good thing. However, it underscores

the importance of conducting thorough research on the ground, identifying the right market entry strategy that aligns with your resources and, crucially, seeking advice from experienced professionals and experts.”

Entrepreneurship is a mixture of calculated risks and visionary leaps. Making the right decisions involves thorough market research and seeking expert advice from legal, financial and industry professionals while developing a robust business plan with clear, measurable goals.

How technology is supporting SMEs

The Middle East region 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.

Saad Ansari , CEO and Co-Founder of Xpence moderated the discussion on how technology supports SMEs, entitled Programmed for Partnership - How technology is supporting SMEs

Participating in this panel were Sunil Paul, Co-Founder and Managing Director of Finesse; Suvo Sundar Chatterjee , Director of Business Excellence, Strategy and Planning at RAKEZ; Mohammed Wassim Khayata, Chief Executive Officer of Al Maryah Community Bank and Thomas Baxendale, Executive Vice President, Digita Platform and Value Proposition, Business Banking and SME at RAKBANK.

Quizzed about how technology, especially AI, is transforming the SME sector, Paul said that AI is transforming everything, and at Finesse, “we built

our foundation on enabling digital transformation for businesses.”

“However, with AI, it’s no longer just about transformation – it’s a revolution. The very foundation of how businesses operate is shifting at an unprecedented pace. AI is being rapidly adopted across industries, from healthcare and financial services to retail and education.”

Paul emphasised that the core challenge for SMEs is the concept of “matchmaking” between providers and buyers.

“AI-driven matchmaking holds the key to significantly streamlining business connections by intelligently identifying potential buyers and partners. By analysing patterns and behaviours, AI can enable sellers to recognise promising prospects early in their journey and similarly empower buyers to discover the ideal service providers,” he added.

The targeted approach dramatically cuts down the time and expense traditionally associated with establishing the right business relationships, ultimately boosting efficiency and driving sales growth.

“The initiatives RAKEZ is undertaking, such as the marketplace for technology providers, incubation cells and white-labelled predictive algorithms for lead conversion and retention, are excellent examples of how an economic zone can directly support the growth and sustainability of its SME ecosystem,” said Chatterjee.

With its young, tech-savvy populace and world-leading smartphone penetration and internet usage rates, the Middle East offers a dynamic digital landscape where consumers readily embrace innovative products and services.

Digitalisation and AI are revolutionising the SME sector, driving growth through increased efficiency, expanded market reach, improved customer experience and fostering innovation.

On the trends shaping tech adoption in the SME sector, Chatterjee said that there is a lot of hype around digital transformation as the silver bullet for SME growth.

“However, the “fear of missing out” can indeed lead to the adoption of plug-and-play solutions without a clear understanding of the underlying business problem, the necessary processes and the long-term sustainability and strategic alignment of these technologies,” added Chatterjee.

Ras Al Khaimah Economic Zone (RAKEZ) is actively educating SMEs through workshops and advisory sessions to guide them in making informed technology decisions.

By automating repetitive tasks, streamlining operations and analysing 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.

From a banking perspective, Baxendale said that the digital journeys that RAKBANK has enabled for payments and transactions are undoubtedly foundational for businesses. However, two major areas stand out as being transformed by AI and digital platforms in the SME industry – human resources and digital marketing.

“The evolution of innovative tools towards greater accessibility – from expensive consultancy advice to paid online platforms and now increasingly free and globally available resources – is a significant trend. The democratisation empowers SMEs to leverage powerful

technologies that were previously out of reach, levelling the playing field to some extent,” said Baxendale.

He underscores the urgency for SMEs to explore and strategically adopt these productivity-boosting platforms and AI tools to remain competitive and accelerate their growth.

Meanwhile, the Middle East is currently witnessing a vibrant entrepreneurial resurgence. The once-barren startup landscape, often overlooked by global investors, has been transformed by a confluence of factors into a thriving hub for innovation.

The Middle East’s startup ecosystem has grown exponentially over the years; together with a growing tech-savvy youthful demographic and state-backed initiatives, the region is witnessing a surge in entrepreneurs coupled with innovation across all sectors.

Mbank’s Khayata stressed that while the banking sector often focuses on adhering to central bank regulations and internal audit requirements, the real opportunity lies in leveraging technology, particularly AI, to enhance decisionmaking across the board, whether for SMEs or financial institutions.

Giving the bank account opening process as an example, Khayata highlighted that from the customer’s perspective, AI can significantly streamline the experience by auto-filling forms based on uploaded documents, requiring only a review for accuracy – enhancing efficiency and reducing friction.

“Beyond account opening, AI has significant potential in improving lending decisions. Banks need to look beyond traditional credit scoring models and incorporate a broader range of data points,” Khayata said, adding that factors such as SME’s social media growth, sales trends and even international risk assessments could provide a more holistic view of their creditworthiness.

Startups and scale-ups in the Gulf region and the wider region are not just catalysts for growth; they are the very engines driving it. Through innovative

thinking, they tackle critical problems that other sectors overlook, propelling society forward while simultaneously generating employment, boosting the economy and drawing in vital foreign investment.

An enabling environment

Governments in the Middle East are aggressively pursuing economic diversification strategies, marking a transformative period for businesses, especially SMEs and startups, as countries are implementing structural reforms such as the introduction of taxation and VAT systems to reduce their heavy reliance on oil revenues.

The discussion titled Trading Places – Trade and Supply Chain Finance for SMEs and Startups was once again moderated by Saad Ansari, the CEO and co-founder of Xpence.

The panel was joined by Shailesh Deshpande , Director of Growth at Jocata; Farooq Siddiqi, Ventures Lead at SC Ventures; Rajeev Chalisgaonkar, Head of Business Banking and NEObiz at Mashreq and Prateek Vahie , Chief Commercial Officer at Wio Bank.

The shift signals a commitment to building more sustainable and diverse economies and necessitates careful consideration for small enterprises striving for growth and compliance.

Vahie kicked off the panel discussion by highlighting that Wio Bank’s initial focus was the launch of an SME business app designed to simplify banking for small businesses. Wio Bank’s strategic collaborations with fintech giants such as Stripe, Zoho and Wise are central to the neobank’s mission to simplify SME banking.

“Our integration with Stripe provides seamless, one-click payment acceptance onboarding through APIs. Similarly, our Zoho integration streamlines invoicing by allowing SMEs to create and send invoices with embedded payment links directly within our platform, eliminating the complexities of multiple systems. Finally, our Wise partnership enables outward remittances in over 135 currencies. These integrations collectively enhance

the convenience and efficiency of our platform for SMEs,” added Vahie.

He explained that Wio Bank’s supply chain platform prioritises a smooth onboarding experience for both anchors and their suppliers, digitising the entire process – a key feature is the efficient disbursement and invoice factoring system.

The Middle East’s strategic location between Europe and Asia offers easy access to these rapidly growing markets. Trade finance, encompassing financial tools for international transactions, empowers SMEs to participate in global markets through direct exports and value chains, driving inclusive economic growth and innovation.

On conditions that allow SMEs access to financing, Chalisgaonkar said historically, many entrepreneurs viewed the Middle Eastern market as a temporary stop rather than a longterm base. However, with better financial infrastructure, stronger data availability and a more permanent business ecosystem, SMEs are in a much stronger position to access funding.

“The introduction of VAT and the upcoming corporate tax, while potentially increasing the cost of doing business, are creating valuable data trails. The taxrelated data can provide lenders with a more comprehensive understanding of an SME’s financial health and performance, further enhancing creditworthiness assessments,” explains Chalisgaonkar.

He added that the widespread adoption of cloud-based accounting systems such as Zoho is a game-changer. The realtime availability of detailed financial data significantly improves transparency and allows SMEs to present a clearer picture of their financial standing to potential lenders.

“The shift from fragmented or manual record-keeping to integrated digital systems addresses a major hurdle in SME financing.”

While trade finance instruments are widely recognised as catalysts for global trade, SMEs face significant hurdles in accessing traditional options due to inherent structural challenges.

The challenges stem from the characteristics of these instruments, which SMEs find costly, complex and demanding in terms of human resources.

On the banking side, information gaps and the need for extensive due diligence result in high transaction costs coupled with low transaction volumes when dealing with SMEs.

With traditional trade finance instruments becoming less central to global trade, short-term loans and working capital financing are gaining importance for export engagement. The financial instruments provide crucial preshipment liquidity for SMEs to produce export-bound goods and services.

From a tech perspective, Deshpande said that the issue of SME lendability is built on four pillars: regulation, capital, data and technology and all four are critical to running efficient and accessible SME lending programs.

“One of the biggest challenges lenders face in SME credit is the issue of trust, which ultimately comes down

to access to reliable data. Traditional credit assessment methods, such as credit bureau reports, often fall short in evaluating financial discipline and behaviour. However, alternative data sources, such as bank transactions and tax filings, provide a more accurate picture,” added Deshpande.

With the industry shifting from assetbacked lending to cash flow-based lending, real-time monitoring and end-use visibility are becoming key enablers. Deshpande believes that technology plays a crucial role in the transformation, allowing lenders to assess transaction histories, VAT or GST filings and other financial data to make more informed lending decisions.

Though SMEs can utilise general shortterm loans and facilities for this purpose, many commercial banks offer dedicated export working capital facilities. While these short-term instruments can alleviate liquidity constraints, they lack specific tailoring to individual trade transactions.

From a fintech perspective, Siddiqi argued that while data is important, “I don’t

believe it’s the only issue. Yes, technology is often positioned as the ultimate solution, but we need to take a broader view.”

Farooq pointed out that when examining thriving SME ecosystems worldwide – be it in city-states such as Singapore and Hong Kong, manufacturing powerhouses such as Germany or exportoriented economies such as South Korea – a notable trend emerges: a considerable amount of credit extended to SMEs originates from non-banking sources.

“Banks, recognising this, are exploring alternative approaches. Rather than retaining SME lending risk on their balance sheets, which is often less efficient under current capital models, they are exploring a role as originators of loans, partnering with other institutions better positioned to hold that risk,” said Farooq.

“The potential evolution could create significant opportunities for both banks and non-bank lenders in the SME financing landscape.”

Farooq closed by highlighting that while the $2 trillion private credit market often makes headlines, its impact, especially in the context of SME finance, lies in its ability to provide much-needed funding.

The MEA Finance’s SME Business and Banking Summit saw stakeholders agree on the fundamental importance of small businesses and SMEs for economies and societies worldwide. The recognition, together with the growing understanding of the specific needs of startups and small businesses in the Middle East over the years, has resulted in an unprecedentedly favourable environment for entrepreneurship in the region.

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