The MENA region as a growth market – Focus on banking

Economic relations between Germany and the MENA region (Middle East & North Africa) are diverse, strategically important and have become more intensive in recent years. The region is facing a huge transformation process with efforts to diversify its economy. In the medium term, the aim is to reduce the economy's dependence on the mineral oil industry and at the same time build up a strong service sector. This is generating dynamic development momentum and is accompanied by a high level of technological dynamism – including in the banking sector.

The Gulf region, which includes Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, has a rich heritage and a rapidly developing digital landscape and is experiencing a unique convergence of a large expatriate community, traditional Islamic values and modern digital banks.

Banking in the Gulf region

Banking in the Gulf region has some very distinctive features. Although the region is culturally and economically comparable, each country has its own nuances. Here are the most important common features of banking in the region:

1. Strong presence of Islamic banking (Islamic banking)

The general financial system is based on the principles of Islamic law. It differs from conventional banking in a number of fundamental ways. The central principle is that interest is prohibited. This means that banks are not allowed to charge or pay traditional credit or savings interest. Instead, there are alternative forms of financing in which banks and customers share profits and losses. The principle that financial transactions are generally based on partnerships therefore applies. This means that the bank does not simply act as a ‘lender’, but participates in a project or business, for example by providing its customers with capital and in return demanding time and knowledge. The principle of mudaraba means that profits are shared and the bank is liable for losses. Another model is the musharaka principle, whereby both partners contribute capital and share the profits or losses.

Islamic banking only allows transactions involving real goods or services. Pure money transactions or speculation such as derivatives or gambling are prohibited. Compliance with the rules is monitored by a supervisory body, which checks all products and processes for religious conformity. Countries such as Bahrain and Saudi Arabia are among the leading markets in Islamic finance.

2. State-dominated banking landscape, high liquidity and capital-strong banks

Many large banks are partly or wholly state-owned and play a central role in financing national development projects (e.g. Saudi Vision 2030 or Expo Dubai). State support ensures a high degree of stability in the banking sector. High oil and gas exports ensure that banks have high capital resources and deposit volumes. Banks therefore grant large project financing, particularly in infrastructure, energy and tourism. As a result, banking is becoming increasingly important strategically as an economic sector and is characterised by strong growth. Banks from the Gulf region are expanding rapidly within the region (e.g. Qatar National Bank, Emirates NBD), with expansion also increasingly taking place internationally through acquisitions, branch networks or correspondent banks. Wealth management and private banking for high net worth depositors are major growth areas.

3. High affinity for technological innovation – digital transformation and AI

Banks in the MENA region demonstrate a high affinity for technology, driven by strategic investments, regulatory initiatives and partnerships with fintech companies. The Gulf states are investing heavily in digital infrastructure in the banking sector. It is striking that neobanks and fintechs in particular are growing strongly. Innovative business models such as open banking and digital assets are the focus of various institutions. These have already introduced open banking regulations or are piloting central bank digital currencies (CBDCs).

• With the introduction of an open banking framework in 2018, Bahrain is one of the pioneers in the region. Saudi Arabia followed suit with the launch of an open banking lab in 2023 to promote innovation in the financial sector.
• Egypt and Oman have also launched similar initiatives to drive forward the digital transformation.

The Gulf region, particularly the United Arab Emirates (UAE), is increasingly positioning itself as a global hub for AI. The region is pursuing an ambitious AI agenda with a focus on infrastructure, education, social integration and international cooperation. Saudi Arabia is also pursuing one of the world's most ambitious AI strategies with HUMAIN and massive investments. The goal is to become a global leader in AI by 2030, develop its own AI models and infrastructure, and accelerate the country's economic transformation – in close coordination with the activities of the UAE and supported by international partnerships. The most important initiatives and developments are:

• Major projects for AI infrastructure: The Stargate project is creating one of the world's largest AI supercomputing data centres in Abu Dhabi.
• National AI strategy: The aim is to integrate AI into administration, the economy, education and security and to strengthen the development of AI skills among the population.
• Democratisation of AI: The UAE has decided to provide all residents with free ChatGPT Plus subscriptions. The aim is to embed AI skills across society and enable access to generative AI tools for schools, businesses and public authorities.
• Integration of AI applications in key industries – beyond banking
• International partnerships and investments: The Gulf states, led by the UAE, are forming strategic alliances with leading US tech companies and investing in cloud infrastructure, AI research and advanced manufacturing. In May 2025, investments of over 200 billion US dollars were approved with a focus on AI and digital transformation.

The banking sector in the region is also characterised by a high level of openness to AI innovations. Governments in countries such as the United Arab Emirates and Saudi Arabia are specifically promoting the use of AI in the financial sector and encouraging banks to implement AI projects at an early stage, for example in the areas of customer experience, risk management and fraud prevention.

adesso in the MENA region – innovation meets industry expertise

The banking sector in the MENA region faces a wide range of challenges and opportunities presented by digital transformation. At adesso, we have the technological and industry-specific expertise and experience, and we understand the regional characteristics. With our global experts and local consulting services, we offer a holistic approach for end-to-end services from a single source. We support banks with innovative solutions to drive growth and success in the banking landscape.

How do financial institutions benefit from working with adesso in the context of open banking?

Open banking is no longer just a regulatory issue in the MENA region. It is a strategic lever for new business models, digital ecosystems and data-driven customer experiences. However, many banks are launching their initiatives without a clear roadmap, measurable business cases or coordinated cross-functional collaboration. As a result, the potential of the emerging platform economy often remains untapped. This is exactly where adesso comes in: as a partner for end-to-end enablement of open banking – from strategic alignment to technical implementation.

Our service promise at a glance:

• Holistic open banking enablement – strategy meets implementation: Open banking only reveals its true value when business strategy, technology and customer focus work together. adesso brings exactly these perspectives together: Development of strategic roadmaps with validated business cases and clear value creation:

  • Conception of scalable platform designs with a focus on payment initiation (PIS), account aggregation (AIS) and data-driven services
  • Implementation of modern API architectures including cloud, security and identity & access management (IAM)
  • Establishment of agile governance structures for scalable partner ecosystems
  • Integration of innovative open banking models with AI and existing system landscapes

• International experience, locally translated: adesso brings in solid project experience from successful open banking initiatives in Europe, the UK and Turkey. We combine this know-how with a deep understanding of the economic, regulatory and cultural specifics of the MENA region. This results in solutions that are globally proven and locally relevant.
• Regulatory understanding with foresight: From PSD2 and GDPR to SAMA and CBB: we know the relevant regulatory frameworks and take them into account in every phase of the project. We strive for solutions that are not only compliant, but also future-proof and flexibly adaptable, enabling stable and trustworthy innovation in the financial sector.
• Innovation and partnership – shaping the banking ecosystem of tomorrow: Open banking is the door opener to a new financial ecosystem, from embedded finance to banking-as-a-service. adesso supports banks in seizing these opportunities with technical foundations such as API marketplaces and developer portals, as well as a clear focus on open collaboration with fintechs, partners and internal teams. This is how we create the basis for sustainable innovation.

A new era of client experience through open finance is approaching, where digital:

• Platforms,
• User experience,
• Interactions,
• Product features, benefits and
• Services

will all be put to the test. Clients will have greater control and the freedom to choose whom they engage with.

Why adesso?

Because we know what matters. We have proven that we can successfully build digital financial solutions even in regulated, complex environments – from Europe to Saudi Arabia. Our innovative strength has been recognised with numerous awards, including first place in the German innovation competition for an AI-based financial portal, as well as successful large-scale local projects such as Mutakamela in Saudi Arabia. For us, open banking is not a goal, but the starting point for sustainable, data-driven innovation and an opportunity that banks in the MENA region should seize strategically now.