Why is this important? Digital banks have a competitive advantage. Their IT is typically organised around agile platforms, run by lean tech teams. Components are managed individually and can be swapped in and out. When put together, they form the backbone of a company’s technology capability. This is why digital banks can get their products and services to market 10x faster than traditional banks that still run on legacy infrastructure.
Launching digital banking platforms offers islamic financial institutions the chance to transform – there are no boundaries in looking at how to rethink a business model and employ cloud-based solutions and API-driven architectures to create an open banking ecosystem to grow business. Banks in the Middle East can enjoy agility and speed if they can unburden themselves from legacy technology.
Banks throughout the Middle East, including in Bahrain, UAE, Qatar, and Saudi Arabia, have been working on their respective digital transformation strategies. This next generation of financial services is critical to driving customer growth among younger consumers, who will contribute ~75% of banking revenue in the Middle East (Alvarez & Marsal, 2019).