The year 2021 is set to be remembered as a watershed one for retail banking in the Middle East, with the anticipated launch of the region’s first purely digital banks. As many as five new entrants are set to launch services before the end of the year in Saudi Arabia and the UAE, with all but one set to gain licences as genuine greenfield entrants.
The licensing of digital-only players in the Middle East is in many ways an obvious play for the region’s central banks, falling in line with key digital innovation targets set out in national development strategies, such as Saudi Arabia’s Vision 2030 and Smart Dubai in the UAE. Yet, while government priorities and demographics favour a wave of disruptive new entrants, such companies may struggle in the face of stiff competition from increasingly savvy incumbent lenders, alongside ongoing regulatory challenges.
