The banking industry in the Middle East and Africa has been experiencing further change in 2025. Against a background of rising global political and economic uncertainty, increasing competitive pressures, and a lengthening list of compliance requirements, financial institutions in the region are under pressure to deliver more for customers at a greater pace – and at a lower cost – than ever before. At the same time, the urgency to invest in product development and support revenue and margin improvement is also growing. The combination of these factors is driving growth in technology investment across the board as banks look to deliver the greater agility and operational efficiency required to navigate today’s operating environment.
The plans and budgets of any individual bank will be driven by their own individual needs and priorities, but there are some important themes at regional level. The executives polled for Celent’s 2025 Dimensions study are clear that delivering on the need for greater resilience and product development will lead the agenda this year. Payments, digital banking, and lending are all prominent areas to which many in both the retail and corporate business lines are allocating resources.
Underpinning this will be strong growth in the adoption of AI and advanced data analytics technologies (including GenAI), which will support a range of use cases across the front and middle office. In many cases, these projects will build on the investments made into data management through 2024. Digital identity and automation are also important focus areas, not least in supporting improvements to experiences in the digital channels. The further adoption of cloud services will be a common element through many of these projects.
Key findings from the research include:
- The operating environment remains challenging. Across the region, 76% believe that the competitive threat from fintechs and other challengers is increasing.
- Product development is high on the agenda. In total, 49% of banks in MEA report that investing to deliver enhanced products or propositions is one of the three most important drivers of their technology strategy, although this sits behind investments in security and greater resilience in the overall ranking.
- In response, growth in technology budgets is increasing. The executives surveyed in Celent’s Dimensions study indicated that IT spending will grow by 5.7% on average this year. However, given the potential for economic disruption caused by a change in tone around global trade policies, it is not yet clear if budget growth will occur at that level.
- The biggest single product-level priority this year is investments in payments. In corporate banking, payments modernisation is a priority for 46% of institutions, while 38% of those in the retail banking business are focusing on innovations in cards and payments. Other top investment areas include lending and digital channel enhancements.
- Underpinning this will be further investments in AI technologies. This is the single biggest area of technology investment for 29% of banks in MEA and will support a range of use cases across the front, middle, and back office. GenAI will continue to be an important element of the broader push towards greater use of data across the organisation, and 48% of banks plan to launch customer-facing services using the technology in 2025.
