Building Digital-Only Banks in MENA: Success Factors and Local Insights

The Rise of Digital-Only Banks in MENA

The Middle East and North Africa (MENA) region is experiencing a transformative shift in its financial services landscape. Driven by a young, digitally native population, high mobile penetration, and ambitious national visions for digital economies, the appetite for digital banking has never been greater. Digital-only banks—unencumbered by legacy systems—are emerging as powerful engines for financial inclusion, innovation, and cross-border trade. Yet, the journey to building and scaling these banks in MENA is uniquely shaped by local regulatory environments, diverse customer needs, and the imperative to create scalable, resilient digital ecosystems.

Unique Opportunities in MENA

• 1. Financial Inclusion:
  Large segments of the population and many small and medium-sized enterprises (SMEs) remain underserved by traditional banks. Digital-only banks can bridge this gap by offering accessible, customer-centric services that reach beyond the limitations of physical branches.
• 2. Cross-Border Trade:
  MENA’s strategic location as a trade corridor between Asia, Europe, and Africa creates demand for seamless, digital-first trade finance solutions. Digital banks are well-positioned to facilitate cross-border transactions, streamline trade finance, and support regional economic growth.
• 3. Regulatory Support:
  Forward-thinking regulators in markets like the UAE and Saudi Arabia are actively encouraging digital innovation. Regulatory sandboxes and progressive licensing regimes are enabling new entrants to test and scale digital banking models in a controlled environment, fostering a culture of innovation.

Key Challenges to Overcome

• 1. Regulatory Complexity:
  Each MENA market has its own regulatory requirements, from data residency to Sharia compliance. Navigating this patchwork demands tailored, market-specific solutions and close collaboration with local authorities.
• 2. Legacy Infrastructure:
  Many incumbent banks still rely on outdated systems, making transformation costly and complex. Even new entrants must ensure their platforms can integrate with existing financial infrastructure and meet evolving regulatory standards.
• 3. Customer Trust:
  Building trust in digital-only propositions is essential, especially in markets where face-to-face banking remains the norm. Digital banks must demonstrate robust security, transparency, and reliability to win over customers.

Lessons from Anglo-Gulf Trade Bank (AGTB): A Blueprint for Success

Publicis Sapient’s work with Anglo-Gulf Trade Bank (AGTB)—the world’s first fully digital trade finance bank—offers a powerful case study for digital banking in MENA. As a greenfield bank, AGTB was able to:

• Reimagine client servicing with a digital-first, client-centric approach.
• Embrace innovation by leveraging cloud-native technologies, APIs, and data-driven operations.
• Foster a culture of agility and collaboration across business and technology teams.

AGTB’s use of a cloud-native core enabled rapid deployment, scalability, and robust security—delivering the bank at half the expected cost and in half the time of traditional approaches. Seamless integration with partners via APIs enabled value-added services like multi-rail payments and real-time transaction monitoring.

Best Practices for Launching and Scaling Digital Banks in MENA

• 1. Start with the Customer—Not the Legacy
  Rather than digitizing old processes, successful digital banks in MENA rethink the entire customer journey. This means designing intuitive, end-to-end digital experiences, from onboarding to transaction execution, tailored to local preferences and regulatory requirements.
• 2. Build a Flexible, Data-Driven Core
  A modern, cloud-native core banking platform is essential. Establishing a single source of truth for client data unlocks real-time analytics, compliance, and personalized services. This approach enables rapid deployment, scalability, and robust security.
• 3. Leverage Ecosystem Partnerships
  No single provider can address the full spectrum of customer needs. Building a curated ecosystem of fintechs, cloud providers, and technology partners allows digital banks to offer value-added services and scale innovation. Seamless integration via APIs is key to delivering a rich, interconnected customer experience.
• 4. Navigate Local Regulatory Environments
  Success in MENA requires deep understanding of local regulations. Close collaboration with regulators, banks, and fintechs ensures compliance with data residency, AML/KYC, and Sharia requirements, while building platforms that can adapt as regulations evolve.
• 5. Adopt Agile, Cross-Functional Ways of Working
  Digital transformation is accelerated by agile methodologies and cross-functional teams. By working in parallel streams—across technology, operations, and business—banks can iterate quickly, validate solutions with real users, and scale successful models.
• 6. Focus on Operational Readiness and MVP Launch
  Launching with a minimum viable product (MVP) allows banks to deliver immediate value, gather feedback, and iterate. This approach ensures operational readiness and provides a foundation for future growth.

The Role of Data, AI, and Personalization

Data is the engine of modern digital banks. By establishing a single source of truth and leveraging advanced analytics and AI, banks can:

• Automate compliance and risk management
• Personalize customer experiences
• Enable real-time decision-making
• Optimize operations and reduce costs

AI is also transforming compliance, from automating KYC/AML checks to enhancing fraud detection and regulatory reporting. Hyper-personalization, powered by AI and data, is becoming a necessity as customers demand tailored products, services, and interactions.

Creating Scalable, Future-Ready Banking Ecosystems

The future of banking in MENA is ecosystem-driven. By building open, modular platforms, banks can quickly integrate new partners, launch innovative products, and scale across markets. Publicis Sapient’s SPEED capabilities—Strategy, Product, Experience, Engineering, and Data—enable clients to create resilient, future-ready banking ecosystems tailored to the region’s unique needs.

Why Publicis Sapient?

With a proven, repeatable approach and deep experience in MENA, Publicis Sapient is the trusted partner for digital banking transformation. Our work with AGTB and other regional leaders demonstrates our ability to:

• Deliver digital banks at speed and scale
• Navigate complex regulatory environments
• Build customer-centric, data-driven platforms
• Orchestrate rich partner ecosystems

Ready to Build the Future of Banking in MENA?

The opportunity is clear: digital banks that put the customer at the center, harness the power of data, and build for flexibility and scale will define the next era of financial services in MENA. Connect with Publicis Sapient to start your digital transformation journey and unlock new growth in the region.

Relevant Links

• Digital Transformation Progress and Priorities in Middle Eastern Banks: 2022 Insights
• La transformation digitale des banques en Europe : Enjeux, tendances et perspectives pour les dirigeants européens (Europe)
• La Transformación Digital Bancaria en América Latina: Oportunidades y Desafíos para Ejecutivos de la Región (LATAM)
• Digital Transformation Progress and Priorities in Middle Eastern Banks: 2022 Insights
• La Transformación Digital Bancaria en América Latina: Prioridades, Desafíos y Oportunidades (LATAM)
• La transformation digitale des banques en Europe : Enjeux, tendances et perspectives pour les dirigeants européens (Europe)
• La transformación digital bancaria: Lecciones globales y oportunidades para América Latina (LATAM)
• Regional Deep Dive: Digital Transformation in UAE and Saudi Arabia’s Banking Sector