ARTICLE
From legacy to leadership: the new banking playbook for MENA institutions
7 October 2025
In a recent webinar, we brought together experts from Microsoft and Publicis Sapient to explore how financial institutions across the Middle East and North Africa (MENA) region are navigating digital transformation, the rise of AI and evolving customer expectations.
Harjit Kang, Head of Middle East & Africa, Mambu, was joined by Tiffany Carpenter, Senior Industry Advisor, Microsoft, and Rohit Mathew, Co-Lead MENA Financial Services, Publicis Sapient, to discuss the latest trends, challenges, and opportunities for legacy and digital-first banks.
This is an edited transcript of the conversation. You can watch or listen to the full webinar on demand.
What are the main trends you’re seeing in banking transformation today across the MENA region?
Harjit Kang (Mambu): We’re witnessing a huge wave of banking transformation in the Middle East, especially over the last two to three years. Transformation is not optional anymore - banks are modernising their entire front-to-back processes, not just the front-end.
Rohit Mathew (Publicis Sapient): Banks in the region have come a long way. In the past, they often took a siloed approach, focusing on isolated upgrades, like updating just their cards platform. Now, we’re seeing a shift. Banks are no longer just making short-term system improvements; instead, they’re prioritising changes that deliver real business value more quickly, rather than waiting years to see results.
The focus has moved from piecemeal upgrades to comprehensive, front-to-back modernisation. This means rethinking their business models, operating models, and technology stacks as a whole.
Tiffany Carpenter (Microsoft): First and foremost, cloud is no longer optional for banks, it’s essential. Many banks are migrating their legacy workloads to cloud platforms like Azure to reduce their data centre footprint, boost agility, and enable AI at scale. Embracing cloud-native banking allows for more flexible architectures, faster product launches, and deeper integration with fintech partners.
AI is now the main driver of transformation in banking. However, to fully leverage AI, banks need high-quality, unified data layers. As they modernise their core systems, banks are prioritising not just collecting data, but ensuring it is structured and usable for AI models. By adopting a “thin core” architecture, banks can reduce their reliance on outdated systems, address the challenge of “dirty data,” and unlock the full potential of AI at scale.
What are the biggest challenges facing legacy banks? What’s slowing them down compared to digital challengers across the region?
Tiffany Carpenter (Microsoft): Fintechs and digital challengers are no longer prompting banks to ask, “Why should we modernise?”, the question now is, “How quickly can we modernise?”
Rapidly evolving regulations add another layer of complexity. Established banks face a more demanding compliance landscape than fintechs. While new entrants can focus on select services, universal banks must comply with a broader range of regulations. For incumbents, this makes the environment much more complex and challenging to navigate.
Rohit Mathew (Publicis Sapient): While not only specific to the region, if we look at digital challengers today, their advantage goes beyond lean, modern cloud native core, microservices, and composable architecture. What truly differentiates them is their business and operating models, which enable hyper-focus on customer experience, personalisation, and flexibility, areas where legacy banks continue to lag.
For example, when it comes to ecosystem partnerships, many legacy banks are still trying to build everything themselves, rather than leveraging fintech solutions and then augmenting them with bespoke offerings. It’s also a mindset shift: simply launching digital front ends or sub-brands will only go so far if they’re still constrained by legacy operating models, technology, policies, and processes.
Take customer service: where some incumbents still view it as a cost centre, digital banks see it as an investment. Similarly, we see digital challengers adopting AI-first approaches, leveraging large language models to scale high-value use cases, while many legacy banks are still stuck on proofs-of-concept that rarely move to production or deliver business value at scale.
Importantly, regulators in markets such as the UAE and Saudi Arabia are actively enabling innovation through new infrastructure, standards, and frameworks like Open Banking and Open Finance. The opportunity is there, but it’s up to legacy banks to take advantage.
In short, while technology and infrastructure challenges are real, the bigger hurdle for legacy banks lies in their business and operating models. Digital challengers don’t carry that same baggage.
Tiffany Carpenter (Microsoft): Legacy banks’ data is a valuable asset, and banks are just starting to realise that they have this treasure trove which is a huge competitive differentiator. When you combine this with the latest technologies, there’s an opportunity to change the core business model and deliver a more customer-centric experience to enable their lifestyle.
Harjit Kang (Mambu): Whoever has access to the best data and can utilise that data in the best way, will be able to offer the best financial services to the customer they’re looking to onboard. AI isn’t a new topic, but it is now at the forefront of these transformation projects and conversations.
Can you paint a picture on the role of AI in the banking sector?
Tiffany Carpenter (Microsoft): We’re now moving into what I’d call the third age of AI, agentic AI. This is where AI becomes more autonomous: it perceives its environment, plans steps, and executes multi-step objectives with minimal human intervention. That shift will fundamentally change how banks operate, from customer engagement to risk management.
In the GCC region, we’re seeing banks at all different stages of this journey, some just starting to explore generative AI, others already implementing agentic frameworks. The potential for transformation is enormous. It’s a very exciting time.
Rohit Mathew (Publicis Sapient): Everyone in the market is talking about AI. But one of the biggest questions is: beyond proof of concepts, how many initiatives are scaling into production?
What we’re seeing is that many banks are experimenting, but the key is choosing the right use cases that demonstrate short-term business value and align with the bank’s overall strategy. For example, AI is already being applied in areas like KYC, AML, and fraud, where agents can ingest data, interpret client documentation, and detect suspicious patterns. On the customer side, we’re seeing use cases around onboarding, lending, and contextual banking experiences. These represent the customer engagement layer. But we are also seeing AI being leveraged across the back end, from software development to legacy modernisation and operational optimisation. The proof of success is becoming clear, not just in cost savings and efficiency, but in generating measurable business value.
Looking ahead, what should MENA-based banks focus on to stay competitive?
Rohit Mathew (Publicis Sapient): For incumbents, focussed business value-driven transformation is not optional anymore. The imperative is front-to-back modernisation, but this must extend beyond technology into the business and operating models themselves. AI will be central to this transformation, on both the front and back ends.
Tiffany Carpenter (Microsoft): And they need to act now. Don’t wait until all your data is perfect, start small, focus on the most valuable use cases, and scale from there.
Harjit Kang (Mambu): I’d reinforce that point. Success will come to banks that can deliver seamless, personalised experiences, leverage data and AI to drive innovation, and collaborate effectively across the ecosystem. Agility and openness will be essential. AI-driven interactions and composable architectures will set the standard. Banks that embrace change and build trust will be best positioned for the future.
Final thoughts
The future of banking in MENA won’t be written by legacy. It will be led by those willing to modernise from the core outwards.
Winning institutions will embrace modernisation as a continuous state by combining data, AI, and cloud to deliver meaningful value at speed.
The challenge won’t just be choosing the right technologies. It will be building the agility, trust, and ecosystem partnerships to bring them to life at scale.
At Mambu, we believe the banks that succeed will be the ones that transform from within by turning complexity into clarity, data into intelligence, and customer expectations into loyalty.
We make more possible.
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