Spotlight: Future of Finance In Middle East

Posted on 11 July 2022

The future unfolds as the world recovers from the global pandemic. As a part of a changing world, the Middle East's financial industry can help to shape a positive change and has an extraordinary opportunity to reshape its destiny in 2022 and beyond.

Where are we now

The Middle Eastern financial sector remains concerned about market volatility and the impact of global events.

On the other hand, the entire ecosystem provides the perfect environment to seize long-term opportunities. Finance organisations can solve challenges and build a lasting brand by combining technology, data and people. 

It is imperative that the Middle East financial sector continues its digital revolution while accelerating its environmental, social and corporate governance (ESG) initiatives.

Growing needs and concerns

The global pandemic has inevitably changed the dynamics of the job market, with many professionals embarking on new careers in new areas outside the financial sector. To compete to attract the best talent to the Middle East, financial organisations must reinvent the traditional workplace, for example by investing more in people's well-being or improving their working lives.

Additionally, financial firms in the Middle East need to form new types of alliances to expand and improve the industry as a whole. Cross-sectoral collaborations and partnerships will foster environmental trust, long-term flexibility, and organisational agility.

Organisations should also place more emphasis on delivering an excellent customer experience as this is becoming one of the key objectives in today's customer-centric market.

The financial sector in the Middle East will need to develop frameworks that offer financial rewards and also benefit society. Focusing solely on profit margins provides a limited view of a company's success and influence

Reducing the carbon footprint, promoting sustainable finance or incorporating diversity, equality and inclusion into the organisation's practices are no longer short-term marketing campaigns, but the future. By finding a new purpose and building consumer confidence, the financial sector in the Middle East can reach new heights.

Is the Middle East ready for a change

The Middle Eastern financial industry has had to overcome many obstacles to reach its current level of maturity. Financial sectors underperformed other emerging markets due to a lack of digital infrastructure, outdated regulations, and late market readiness.

Today, however, a paradigm shift is taking place in the financial sector in the Middle East.

Innovations in finance have been developed across the board to make the industry more customer-centric and data-driven. What is interesting, however, is that finance is becoming an ecosystem in which multiple players work together. The digitization of financial services is at the heart of these new market dynamics in the financial sector in the Middle East.

Banking-as-a-Service (BaaS) is the link between established players in the financial sector and the new players who are shaking the market. Banks will transform from within into holistic platforms based on consumer data.

In an era of connectivity and open banking, consumers will benefit from greater modularization of financial services with more options and flexibility in their financial planning.

All evidence suggests that the future of the Middle East financial sector will largely be determined by the importance of central bank digital payments, cryptocurrencies and digital currencies. 

In addition, financial institutions in the Middle East are increasingly relying on artificial intelligence, predictive analytics, and algorithms in their daily operations. This fiscal consolidation increases efficiency and makes it easier for companies to do business. Real-time analysis of every transaction enables financial service providers to innovate more efficiently and ensure better tax compliance.

In short, the financial industry in the Middle East is poised for radical change in 2022.

Financial institutions will allocate their budgets to achieve long-term growth and operational stability while pursuing ESG-focused investments and strategies. This transformation is based on three fundamental pillars financial services organisations must focus on to prepare for the future: data, technology, and people.

The future belongs to those who prepare for it today

The relationship between consumers and financial service providers in the Middle East will determine the future of the industry. Therefore, it is crucial that the financial sector understands the needs of consumers and acts accordingly. There is an old saying that historical data cannot predict future trends, but it can certainly help shape them.

The financial sector in the Middle East needs to get closer to its customers. This means that financial service providers need to become proactive by anticipating consumers' financial expectations and wishes. You may see today's consumers as the model for tomorrow's consumers. 

Bridging the gap between consumers and financial services means bridging the gap between data, technology and people. Everyone needs to work together to get a clear picture of consumers.

Data: Financial companies need to strengthen their data infrastructure to shape the future. The ability to efficiently collect, store and manage data leads to faster and better decisions. Forward-thinking financial institutions need to shed real-time consumer databases without relying on silos.

Technology: Data must be enriched to become actionable insights and, ultimately, insights. By using AI-based solutions, the financial industry in the Middle East could make decisions faster and make reliable forecasts.

People: Data intelligence alone can provide an incomplete picture of the truth. Brands that shape the future must remain rooted in the cultural and societal context to which they belong.

This means brands will continue to rely on industry experts to enrich data with local nuances and insights to build the customer-centric brands of tomorrow.

The bottom line

The financial industry in the Middle East is growing at an unprecedented pace. The population is young, highly educated, digitally savvy, and sophisticated. As a result, financial services providers must not only diversify their products, but also be able to respond quickly and efficiently to insights.

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