Innovative technology key to transaction banking growth in Middle East
Adoption of innovative technology will be central to the fulfilment of bullish growth predictions for transaction banks in the Middle East, according to a survey of market participants during a recent conference in Dubai.
Middle East banks expect to increase their share of global transaction banking revenues by at least 25%, according to the survey, which was conducted by transaction banking platform vendor iGTB during its Middle East Client Advisory Event, which brought together 68 senior-level bankers, representing 18 local banks from across the region, for a conference entitled “The decade of Transaction Banking: what share of this half a trillion dollar market will Middle Eastern Banks catch?”.
The survey showed that 93% of respondents believe Middle East banks will take a larger portion of the $509 billion global transaction banking market by 2025, with 62% anticipating growth of 25% or greater, and 34% expecting the region’s share to increase by at least 50%.
The attendees unanimously agreed that such success will hinge on the adoption of innovative technology, with 61% identifying it as “the most critical factor” to success, and 100% deeming it either crucial or important.
There was also a perception among 50% of participants that Middle Eastern banks fall “significantly behind” other regions in their implementation of innovative technology. Altogether, 89% of participants said the region’s banking sector needed to improve its technology adoption rate. In addition, all respondents agreed that Middle East banks must further integrate their cash and trade functions, with 61% acknowledging that these functions currently remain very distinct.
“The upbeat sentiment comes as no surprise,” said Manish Maakan, chief executive of iGTB, Intellect Design Arena. “Transaction banks in the Middle East have an enormous opportunity to leverage the region’s increasing sophistication and strategic position as the gateway to international trade. Realising this potential, however, will require recognition of current shortfalls – particularly with regard to client-facing and internal banking technology – and a clear response to today’s integrated cash and trade needs.”
